EXHIBIT 10.6
 
EXECUTION

LOAN AGREEMENT

THIS LOAN AGREEMENT (“Agreement”) is made and entered into as of April 17, 2009
by and between SUNPOWER CORPORATION, a Delaware corporation (“Borrower”), and
UNION BANK, N.A., a national banking association (“Bank”).

SECTION 1. THE CREDIT

1.1           CREDIT FACILITIES

1.1.1           The Term Loan.  Subject to and on the terms and conditions set
forth herein, Bank will loan to Borrower the sum of Thirty Million Dollars
($30,000,000) (the "Term Loan") in one (1) disbursement on or before April 30,
2009 in accordance with the terms hereof and of the Note (defined below).  The
proceeds of the Term Loan shall be used for general working capital and
corporate purposes.  The Term Loan shall be evidenced by Bank’s standard form of
commercial promissory note (the "Note").

1.2           Terminology.  The following words and phrases, whether used in
their singular or plural form, shall have the meanings set forth below:

“Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. Sections
101 et seq.).

“Capitalized Lease Obligation” means, with respect to any Person, that portion
of any obligation as lessee under a lease of (or other agreement conveying the
right to use) real and/or personal property that is required to be capitalized
on, or disclosed in a footnote to, the balance sheet of such Person in
accordance with GAAP, and, for purposes of this Agreement, the amount of such
obligation shall be the capitalized amount thereof, determined in accordance
with GAAP.
 
“Change in Control” means any event, transaction, or occurrence as a result of
which (a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of the Securities Exchange Act of 1934, as an amended (the “Exchange Act”)),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of Borrower, is or becomes a beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of Borrower, representing fifty-one percent (51%) or more of the
combined voting power of Borrower’s then outstanding securities; (b) a
“Fundamental Change” (as that term is defined in the Indenture) occurs; or (c)
Borrower shall cease to own and control 100% of the issued and outstanding
capital stock of each Guarantor.
 
“Closing Date” means the date of this Agreement.
 
“Continuing Guaranty” means that certain Continuing Guaranty, dated as of the
date hereof, by the Guarantors in favor of Bank.
 
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.
 
 
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“Eligible Assets” means unencumbered and unrestricted cash, cash equivalents,
and marketable securities acceptable to Bank, which, if cash, is U.S. Dollar
denominated, or if held in an account not maintained in the United States, is
denominated in any currency for which a U.S. Dollar equivalent is routinely
calculated by Bank, and, if other than cash, consist of financial instruments or
securities, acceptable to Bank; provided, that in no event shall “Eligible
Assets” include any auction rate securities or auction rate certificates.

“Foreign Subsidiary” means each Subsidiary of Borrower, other than Subsidiaries
that are organized under the laws of the United States or any state or territory
thereof or the District of Columbia, that is a controlled foreign corporation
(as defined in the Internal Revenue Code) in respect of which either (a) the
pledge of all of the capital stock of such Subsidiary or (b) the guaranteeing by
such Subsidiary of the Obligations could reasonably be expected to result in
material adverse tax consequences to Borrower.

“GAAP” means generally accepted accounting principles and practices in the
United States, consistently applied.  Accounting terms used in this Agreement
but not otherwise expressly defined have the meanings given them by GAAP.

“Guaranteed Indebtedness” means, with respect to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend, or other obligation
(“primary obligations”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person (a) to purchase
or repurchase any such primary obligation, (b) to advance or supply funds (1)
for the purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the holder of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) to
indemnify the holder of such primary obligation against loss in respect thereof;
provided that Guaranteed Indebtedness shall not include endorsements of
instruments for deposit or collection in the ordinary course.  The amount of any
“Guaranteed Indebtedness” at any time shall be deemed to be an amount equal to
the lesser at such time of (x) the stated or determinable amount of the primary
obligation in respect of which such Guaranteed Indebtedness is made, and (y) the
maximum amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness; or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.

“Guarantor(s)” means individually or collectively, each of SunPower Corporation,
Systems, a Delaware corporation (formerly known as PowerLight Corporation),
SunPower North America, LLC, a Delaware limited liability company (successor in
interest to SunPower North America, Inc., a Delaware corporation) and each
Person which executes or is required pursuant to this Agreement to execute a
guaranty, or a joinder to an existing guaranty, of the Term Loan.

“Hedge Agreement” means any transaction, agreement or document now existing or
hereafter entered into that provides for an interest rate, credit, commodity or
equity swap, cap, floor, collar, forward foreign exchange transaction, currency
swap, cross currency rate swap, currency option, or any similar transactions or
any combination of,

 
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or option with respect to, these or similar transactions, for the purpose of
hedging Borrower’s exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.

“Indebtedness” of any Person means, at the time of computation thereof (without
duplication):  (a) all indebtedness and liabilities of such Person for borrowed
money, under repurchase agreements (whether on a recourse or non-recourse basis)
or for the deferred purchase price of property or services (including
reimbursement and all other obligations with respect to surety bonds and
bankers’ acceptances, in each case whether or not matured, but excluding
obligations to non-Affiliate trade creditors incurred in the ordinary course of
business and excluding deferred taxes); (b) all obligations and liabilities,
whether or not for borrowed money (i) represented by notes payable or drafts
accepted, in each case representing extensions of credit, or (ii) evidenced by
notes, bonds, debentures or similar instruments; (c) all indebtedness created or
arising under any conditional sale, other title retention agreements or other
similar instruments with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (d)
all Capitalized Lease Obligations; (e) all Guaranteed Indebtedness; (f) all
reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment), and all
obligations of such Person as the issuer of any letters of credit or acceptances
(whether or not the same have been presented for payment); (g) all liabilities
under Hedge Agreements, in each case whether or not matured; and (h) with
respect to Borrower, the Obligations.
 
“Indenture” means collectively, that certain Indenture, dated as of February 7,
2007 by and among Borrower and Wells Fargo Bank, National Association (the
“Trustee”), that certain First Supplemental Indenture, dated as of February 7,
2007 by and among Borrower and the Trustee with respect to Borrower’s 1.25%
Senior Convertible Debentures due 2027, and that certain Second Supplemental
Indenture, dated as of July, 2007 by and among Borrower and the Trustee with
respect to Borrower’s 0.75% Senior Convertible Debentures due 2027, each as in
effect on the date hereof.
 
“Lien” means any voluntary or involuntary security interest, mortgage, pledge,
claim, charge, encumbrance, title retention agreement, or third party interest,
covering all or any part of the property of Borrower or any Guarantor.
 
“Loan Documents” means this Agreement, the Note, the Continuing Guaranty
executed by the Guarantors, the Security Agreement, and all other documents,
instruments and agreements required by Bank or executed, from time to time, in
connection with this Agreement, the Note, the Term Loan, and with all other
credit facilities from time to time made available to Borrower by Bank.
 
“Loan Party” means each of Borrower, each Guarantor and SPSA.
 
“Material Adverse Effect” means a material adverse effect on, or material
impairment of (a) the business, assets, operations, liabilities (actual or
contingent) or financial condition of Borrower, individually, or of Borrower and
its Subsidiaries, taken as a whole, or (b) the ability of Borrower or any
Guarantor to pay or perform in accordance with the terms of any of the Loan
Documents, or (c) the validity or enforceability of the Loan Documents, or (d)
the rights and remedies of Bank under any of the Loan Documents, or (e) the
 
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timely payment of the principal of or interest on the Obligations or other
amounts payable in connection therewith.
 
“Material Domestic Subsidiary” means any Material Subsidiary that is not a
Foreign Subsidiary.
 
“Material Subsidiary” means any Subsidiary whose assets have a book value which
exceed ten percent (10%) of the book value of Borrower’s consolidated assets
(based on the then most recent fiscal year end financial statement then
delivered or deemed delivered to Bank hereunder).  In no event shall any Special
Purpose Entity be considered a Material Subsidiary for any purpose under this
Agreement.
 
“Note” has the meaning given in Section 1.1.1.
 
“Obligations” means all loans, advances, debts, expense reimbursements, fees,
liabilities and obligations, for the performance of covenants, tasks or duties
or for payment of monetary amounts (whether or not such performance is then
required or contingent, or amounts are liquidated or determinable) owing by
Borrower or any Guarantor arising under or in any way in connection with any
Loan Document or otherwise with respect to the Term Loan, of any kind or nature,
present or future, whether voluntary or involuntary, whether incurred directly
or acquired by Bank by assignment, assumption or succession, whether due or not
due, absolute or contingent, liquidated or unliquidated, legal or equitable,
whether Borrower is liable individually or jointly or with others, whether or
not evidenced by any note, agreement or other instrument, whether arising under
this Agreement or any of the other Loan Documents, or under any other agreement
between Borrower, any Guarantor or any of their respective Subsidiaries and
Bank, whether recovery thereof is or becomes barred by a statute of limitations
or is or becomes otherwise unenforceable, together with all expenses of, for and
incidental to collection, including reasonable attorneys' fees, and all
covenants and duties regarding such amounts.  “Obligations” includes, without
limitation:  (a) all principal, interest, fees, charges, expenses, reasonable
attorneys’ fees and any other sum chargeable to Borrower or any Loan Party under
this Agreement or any of the other Loan Documents, and all principal, interest
and other amounts due or owing in respect of the Term Loan, and (b) all
interest, fees and other amounts that accrue after the commencement by or
against Borrower or any Loan Party or any affiliate thereof of any case or
proceeding under any Debtor Relief Law, regardless of whether such interest and
fees are allowed claims in such proceeding.
 
“Permitted Indebtedness” means (i) indebtedness of Borrower or a Guarantor to
Borrower or any Subsidiary in the ordinary course of business; (ii) indebtedness
in favor of Solon AG and its affiliates under the Amended and Restated Supply
Agreement, dated as of April 14, 2005, as amended, between Borrower and Solon AG
fur Solartechnik; (iii) indebtedness in favor of customers and suppliers of the
Borrower and Guarantors in connection with supply and purchase agreements in an
aggregate principal amount not to exceed Two Hundred Million Dollars
($200,000,000) at any one time and any refinancings, refundings, renewals or
extensions thereof (without shortening the maturity thereof or increasing the
principal amount thereof); (iv) indebtedness in respect of Borrower’s 1.25%
Senior Convertible Debentures due 2027 issued under the Indenture in February
2007 in the maximum aggregate principal amount not to exceed Two Hundred Million
Dollars ($200,000,000) plus accrued interest thereon and Borrower’s 0.75% Senior
Convertible Debentures issued under the
 
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Indenture in August 2007 in the maximum aggregate principal amount of Two
Hundred Twenty-Five Million Dollars ($225,000,000) plus accrued interest
thereon; (v) indebtedness owed to bonding companies in connection with
obligations under bonding contracts (however titled) entered into in the
ordinary course of business, pursuant to which such bonding companies issue
bonds or otherwise secure performance of Borrower and Subsidiaries for the
benefit of their customers and contract counterparties; (vi) unsecured
indebtedness of Borrower owing to International Finance Corporation, in an
aggregate principal amount (when added to any amounts permitted to be guarantied
pursuant to clause (e) of Section 5.5) not to exceed, at any time, Seventy Five
Million Dollars ($75,000,000); provided that prior to entering into any
definitive or binding agreement with respect to any such indebtedness, Bank
shall have reviewed and approved in writing all material terms and conditions of
such indebtedness; (vii) unsecured indebtedness of Borrower in an aggregate
principal amount not to exceed Fifty Million Dollars ($50,000,000) under the
Wells Fargo Line of Credit as in effect on the Closing Date; (viii) indebtedness
of Borrower in an aggregate principal amount not to exceed One Hundred Fifty
Million Dollars ($150,000,000) under the secured letter of credit facility
provided under the Wells Fargo Credit Agreement as in effect on the Closing
Date; provided that such amount may be increased to an aggregate principal
amount not more than One Hundred Seventy Five Million Dollars ($175,000,000);
(ix) liabilities of Borrower and Guarantors under Hedge Agreements with
nationally recognized financial institutions reasonably satisfactory to Bank
pursuant to bona fide hedging transactions and not for speculation; (x)
refinancing of Permitted Indebtedness described in (vii) and (viii) above,
provided that the maximum permitted principal amount thereof is not increased,
the terms thereof are not modified to impose materially more burdensome terms
upon Borrower or its Subsidiaries, as the case may be, no collateral or security
(other than as permitted in clause (xiii)(b) and (xx) of the definition of
“Permitted Liens”) is granted or exists in connection therewith, and none of
Borrower or the Guarantors is subject to any new or additional financial
covenants, in each case, without the prior written consent of Bank, (xi)
Permitted Refinancing Indebtedness in an amount not to exceed the principal
amount of the debentures being refinanced with the proceeds thereof; and (xii)
additional unsecured indebtedness of Borrower and Guarantors in an aggregate
principal amount not to exceed Twenty Five Million Dollars ($25,000,000)
outstanding at any one time.
 
“Permitted Investments” means (a) loans, advances or investments existing as of,
and disclosed to Bank prior to, the Closing Date, (b) additional loans or
advances by Borrower or a Guarantor to employees and officers in the ordinary
course of business and in amounts not to exceed an aggregate of Fifteen Million
Dollars ($15,000,000) outstanding at any time, (c) investments which are made in
accordance with Borrower’s investment policy as from time to time adopted by its
Board of Directors, (d) investments which constitute Specified Transactions
expressly permitted under Section 5.3, (e) loans, advances or investments that
constitute Permitted Indebtedness, (f) advances to, or investments in, a
Subsidiary or in Woongjin Energy Co. Ltd. by Borrower or any Guarantor in the
ordinary course of business as conducted from time to time; and (g) prepayment
of obligations to vendors and suppliers in the ordinary course in an amount not
to exceed Three Hundred Million Dollars ($300,000,000).
 
“Permitted Liens” means (i) liens for taxes not yet due or that are being
contested in good faith by appropriate proceedings; (ii) carriers’,
warehousemen’s, materialmen’s, repairmen’s or other like liens arising in the
ordinary course of business that are not
 
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overdue for a period of more than 90 days or that are being contested in good
faith by appropriate proceedings; (iii) pledges or deposits in connection with
workers’ compensation, unemployment insurance and other social security
legislation; (iv) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business; (v) easements, rights-of-way, restrictions
and other similar encumbrances incurred in the ordinary course of business that,
in the aggregate are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any of
its Subsidiaries; (vi) any lien granted as a replacement or substitute for
another Permitted Lien; (vii) liens existing as of the date of this Agreement
and securing indebtedness of Borrower or any Subsidiary, incurred to finance the
acquisition of fixed or capital assets (including refinancings thereof) provided
that such liens are limited to the assets financed with such indebtedness;
(viii) liens created pursuant to the Loan Documents; (ix) any interest or title
of a lessor under any lease entered into by the Borrower or any other Subsidiary
in the ordinary course of its business and covering only the assets so leased;
(x) liens in favor of customers or suppliers of the Borrower and its
Subsidiaries on equipment, supplies and inventory purchased with the proceeds of
advances made by such customers or suppliers under, and securing obligations in
connection with, supply agreements; (xi) liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xii) licenses of patents, trademarks
and other intellectual property rights granted by the Borrower or any of its
Subsidiaries in the ordinary course of business and not interfering in any
respect with the ordinary conduct of the business of the Borrower or such
Subsidiary; (xiii) bankers’ liens, rights of setoff and other similar liens
existing solely with respect to cash and cash equivalents on deposit in one or
more accounts maintained by the Borrower or any Guarantor, in each case existing
in the ordinary course of business (a) in favor of the bank or banks with which
such accounts are maintained, securing customary obligations owing to such bank
relating to such account, but not obligations for borrowed money; provided that
if Borrower or such Subsidiary has an obligation to such bank or banks for
borrowed money, the amount of cash and cash equivalents subject to such liens
and setoff rights shall not at any time exceed Five Million Dollars
($5,000,000), and (b) in favor of Wells Fargo with respect to accounts
maintained at Wells Fargo; provided that the amount of such cash and cash
equivalents subject to such liens and setoff rights shall not at any time exceed
Thirty Million Dollars ($30,000,000); (xiv) [reserved]; (xv) liens that arise by
operation of law for obligations not yet due; (xvi) liens arising out of
judgments or awards not resulting in a default under this Agreement; (xvii)
liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by Borrower in the ordinary
course of business; (xviii) existing and future liens related to or arising from
rebates in the ordinary course of business; and (xix) existing and future liens
in favor of the Borrower’s bonding company covering materials, contracts,
receivables and other assets which are related to, or arise out of, contracts
which are bonded by that bonding company; (xx) security interests: (1) in cash,
cash equivalents and securities maintained as pledged collateral in deposit or
securities accounts in an aggregate amount not to exceed at any time the then
outstanding Wells Fargo Exposure Amount securing the Indebtedness described in
clause (viii) of the definition of “Permitted Indebtedness”, and (2) in
sixty-percent (60%) of the stock in SPSA, securing up to Fifty Million Dollars
($50,000,000) of the obligations of Borrower under the Wells Fargo Line of
Credit as in
 
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effect on the Closing Date, and (xxi) other liens so long as the aggregate
outstanding principal amount of the obligations secured thereby does not exceed
(as to the Borrower and the Guarantors on a consolidated basis) Five Million
Dollars ($5,000,000) at any one time; provided, however, that in no event shall
any Permitted Lien (except those in favor of Bank) extend to the deposit,
investment or securities account maintained with Bank.
 
“Permitted Refinancing Indebtedness” means Indebtedness evidenced by notes or
debentures or convertible equity securities of Borrower the proceeds of which
are used to repay in full all of Borrower’s outstanding 0.75% Senior Convertible
Debentures due 2027 if and to the extent that such Indebtedness and convertible
equity securities: (a) have no maturity date, scheduled redemption date or other
mandatory redemption date exercisable in the discretion of the holder thereof,
occurring prior to the Term Loan Maturity Date, (b) contain no financial
covenants, (c) contain no other covenants that are more restrictive on the
Borrower or its business or operations than the restrictions in the Indenture in
effect as of the Closing Date, (d) are subject to terms and conditions (other
than with regard to pricing) substantially identical to those contained in such
debentures and the Indenture, and (e) are on terms and conditions satisfactory
to Bank.
 
“Person” means any individual, sole proprietorship, partnership, limited
liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, public benefit
corporation, entity or government (whether Federal, state, county, city,
municipal or otherwise, including any instrumentality, division, agency, body or
department thereof).
 
“Reference 10-K” means Borrower’s annual report on Form 10-K filed by Borrower
with the Securities and Exchange Commission for the fiscal year ending December
28, 2008.
 
“Security Agreement” means the Security Agreement, dated as of the Closing Date,
by and between Borrower and Bank, in form and substance satisfactory to Bank, as
the same may be amended, renewed, extended, supplemented, restated, replaced or
otherwise modified or in effect from time to time.
 
“Solvent” means, with respect to any Person as of a particular date, that on
such date (a) such Person is generally able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature in their ordinary course, (c) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or a transaction, for which such Person’s assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage,
(d) the fair value of the assets of such Person is greater than the total amount
of liabilities, including contingent liabilities, of such Person, and (e) the
aggregate fair saleable value (i.e., the amount that may be realized within a
reasonable time, considered to be six months to one year, either through
collection or sale at the regular market value, conceiving the latter as the
amount that could be obtained for the assets in question within such period by a
capable and diligent businessman from an interested buyer who is willing to
purchase under ordinary selling conditions) of the assets of such Person will
exceed its debts and other liabilities (including contingent, subordinated,
unmatured and unliquidated debts and liabilities).  For purposes of this
definition, “debt” means any liability on a claim, and “claim” means (i) a right
to payment, whether or not such a right
 
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is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or
(ii) a right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right is an equitable remedy, is
reduced judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
 
“Special Purpose Entity” means an entity formed in connection with a specific
transaction with a customer, investor, lender and/or financing party of Borrower
or any Subsidiary wherein such entity is used solely in connection with such
transaction.
 
“Specified Transaction” means any of the following: (a) the acquisition by
Borrower or a Guarantor of all or substantially all of the assets of another
Person or a division of such Person; (b) the merger or consolidation of Borrower
or any Guarantor with or into any other Person; (c) the acquisition by Borrower
or any Guarantor of a controlling or majority interest in any other Person; and
(d) investments in other Persons, including joint ventures.
 
“SPML” means SunPower Philippines Manufacturing, Ltd., a company organized under
the laws of the Philippines.
 
 “SPSA” means SunPower Systems SA, a corporation organized under the laws of
Switzerland.
 
 “Subsidiary” means, as applied to any Person, (a) a corporation or limited
liability company whose stock regularly entitled to vote (other than directors’
qualifying shares) having ordinary voting power to elect a majority of its board
of directors (or other governing body) is 50% or more owned, directly or
indirectly, by such Person, (b) a partnership or joint venture whose partnership
or venture interests are 50% or more owned, directly or indirectly, by such
Person, and (c) each other Person (whether now existing or hereafter formed or
acquired) in which such Person, directly or indirectly, owns a controlling or
majority interest.  The term “Subsidiary”, when used in this Agreement without
reference to any particular Person, means a Subsidiary of Borrower.
 
“Tangible Net Worth” means Borrower’s consolidated stockholders’ equity
increased by the outstanding amount of indebtedness included in the calculation
thereof that is subordinated to Bank on terms satisfactory to Bank and decreased
by any intangible assets and any loans or advances to, or investments in, any
related entities or individuals, all determined in accordance with GAAP.
 
“Term Loan” has the meaning given to such term in Section 1.1.1 above.
 
“Term Loan Maturity Date” means April 17, 2012.
 
“Total Liabilities” means total consolidated liabilities of Borrower (including
both current and non-current liabilities), less the outstanding amount of
indebtedness included in the calculation thereof that is subordinated to Bank on
terms satisfactory to Bank, plus the aggregate amount available to Borrower to
be drawn under all letters of credit issued for the account of Borrower and/or
any Subsidiary, all determined in accordance with GAAP.
 
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“Total Non-Stock Consideration” means all consideration whatsoever (other than
common stock in Borrower) and shall include, without limitation, cash, other
property, assumed indebtedness, amounts payable, whether evidenced by notes or
otherwise and “earn-out” payments.
 
“Wells Fargo” means Wells Fargo Bank, National Association.
 
“Wells Fargo Agreements” means, collectively, the Wells Fargo Credit Agreement
and the documents, instruments and agreements entered into in connection
therewith, in each case, as amended, renewed, extended, supplemented, restated,
replaced, refinanced or otherwise modified or in effect from time to time.
 
“Wells Fargo Credit Agreement” means that certain Amended and Restated Credit
Agreement, dated as of March 20, 2009, by and between Borrower and Wells Fargo
as amended, renewed, extended, supplemented, restated, replaced, refinanced or
otherwise modified or in effect from time to time.
 
“Wells Fargo Exposure” means the sum of (a) the aggregate outstanding principal
balance of advances owing under the Wells Fargo Line of Credit, plus (b) the
aggregate amount available to be drawn under any letter of credit sublimit or
subfeature to the Wells Fargo Line of Credit, plus (c) the amount drawn and not
yet reimbursed under any letters of credit issued under such sublimit or
subfeature.
 
“Wells Fargo Line of Credit” means Borrower’s line of credit for advances in an
aggregate principal amount up to Fifty Million Dollars ($50,000,000), under the
Wells Fargo Credit Agreement, as such line of credit may be amended, renewed,
extended, supplemented, restated, replaced, refinanced or otherwise modified
from time to time.
 
1.3           Prepayment.  The Term Loan may be prepaid in full or in part but
only in accordance with the terms of the Note, and any such prepayment shall be
subject to any prepayment fee (if any) provided for therein.  In the event of a
principal prepayment on any term indebtedness, the amount prepaid shall be
applied to the scheduled principal installments due in the reverse order of
their maturity on the Term Loan being prepaid.
 
1.4           Interest.  The unpaid principal balance of the Term Loan shall
bear interest at the rate or rates provided in the Note.
 
1.5           Upfront Commitment Fee.  On or before the date of execution of
this Agreement, Borrower shall pay to Bank a nonrefundable commitment fee with
respect to the Term Loan of One Hundred Seventy Two Thousand Five Hundred
Dollars ($172,500) which shall be fully-earned on receipt.
 
1.6           Balances.  Borrower shall maintain one or more depository accounts
with Bank until all Obligations relating to the Term Loan have been paid in
full.
 
1.7           Disbursement.  Bank shall disburse the proceeds of the Term Loan
as provided in Bank's standard form Authorization(s) to Disburse executed by
Borrower.
 
1.8           Automatic Charge. Borrower agrees that each payment of any amounts
owing pursuant to this Agreement or the other Loan Documents relating to the
Term Loan shall be made by
 
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automatic deduction from Borrower’s designated deposit account with Bank.  These
debits shall not constitute a set-off.
 
SECTION 2. CONDITIONS PRECEDENT
 
Bank shall not be obligated to disburse the Term Loan unless at or prior to the
time of such disbursement, the following conditions have been fulfilled to
Bank's satisfaction:
 
2.1           Compliance; Loan Documents.  (a) Borrower shall have performed and
complied with all terms and conditions required by this Agreement to be
performed or complied with, including payment of the fees required hereunder,
and Borrower shall have delivered to Bank a compliance certificate in the form
attached hereto as Exhibit C executed by Borrower’s chief financial officer
evidencing compliance, as of December 28, 2008, with each of the financial
covenants set forth herein.  (b)  Borrower shall have executed and delivered to
Bank this Agreement, the Note, the Security Agreement, and all other Loan
Documents.
 
2.2           Guaranties.  Each Guarantor shall have executed and delivered to
Bank the Continuing Guaranty.
 
2.3           Authorization to Obtain Credit.  Borrower and each Guarantor shall
have provided Bank with an executed copy of Bank’s form Authorization to Obtain
Credit with certified copies of resolutions duly adopted by Borrower’s and such
Guarantor’s board of directors, managers, members or other governing body, and
in form reasonably satisfactory to Bank, authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which they are a
party.  Such resolutions shall also designate the persons who are authorized to
act on Borrower's and such Guarantor’s behalf in connection with this Agreement
and the other Loan Documents, and to do the things required of Borrower and the
Guarantors pursuant to this Agreement and the other Loan Documents.
 
2.4           Legal Opinion.  Bank shall have received opinions of counsel to
Borrower and the Guarantors, which opinions shall be in a form and cover such
matters as Bank shall reasonably request.
 
2.5           Lien Searches.  Bank shall have received written advice relating
to such Lien searches as Bank shall have requested, and such termination
statements or other documents as may be necessary to confirm that the assets and
properties of Borrower and the Guarantors are subject to no other Liens in favor
of any Persons (other than Permitted Liens).
 
2.6           Continuing Compliance.  At the time any disbursement is to be made
and immediately thereafter, there shall not exist any Event of Default (as
hereinafter defined) or any event, condition, or act which with notice or lapse
of time, or both, would constitute an Event of Default.
 
2.7           Financial Condition.  At the time any disbursement is to be made
and immediately thereafter, there shall have been no material adverse change, as
determined by Bank in the exercise of its good faith business judgment, in the
financial condition or business of Borrower or any Guarantor, nor any material
decline, as reasonably  determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets
of Borrower or any such Guarantor.
 
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2.8           Disbursement Request.  Bank shall have received a disbursement
request and an authorization to disburse, and such other documents, certificates
and instruments as Bank may reasonably require.
 
SECTION 3. REPRESENTATIONS AND WARRANTIES
 
Borrower represents and warrants that:
 
3.1           Business Activity.  Borrower’s principal business is the design,
manufacture and sale of high-performance solar electric power technologies.

3.2           Organization and Qualification.  Borrower is a corporation duly
organized and existing under the laws of the State of Delaware; each Guarantor
is a corporation or limited liability company duly organized and validly
existing under the laws of its state of organization and formation; each Loan
Party is duly qualified and in good standing in each jurisdiction where such
qualification is required except to the extent that a failure to qualify could
not reasonably be expected to result in a Material Adverse Effect, and each Loan
Party has the power and authority to carry on the business in which it is
engaged and/or proposes to engage.  Borrower and each Subsidiary possesses, and
shall hereafter possess, all permits, consents, approvals, franchises and
licenses required and rights to all trademarks, trade names, patents, and
fictitious names, if any, necessary to enable it to conduct the business in
which it is now engaged in compliance with applicable law except to the extent
that non-compliance could not reasonably be expected to have a Material Adverse
Effect.
 
3.3           Power and Authorization.  Borrower and each Guarantor has the
power and authority to enter into this Agreement, the Note and the other Loan
Documents to which it is a party, and to execute and deliver the Note and all
other Loan Documents to which it is a party.  This Agreement and all things
required by this Agreement and the other Loan Documents have been duly
authorized by all requisite action of Borrower and the Guarantors (as
applicable).  This Agreement and each other Loan Document has been duly
authorized, and upon their execution and delivery in accordance with the
provisions hereof will constitute legal, valid and binding agreements and
obligations of Borrower or the party which executes the same (other than Bank),
enforceable in accordance with their respective terms.

3.4           Authority to Borrow.  The execution, delivery and performance by
Borrower and each Guarantor of each of the Loan Documents to which it is a party
do not violate any provision of any law or regulation, or contravene any
provision of the certificate or articles of incorporation, bylaws, operating or
limited liability company agreement or other organizational document of such
entity, or result in any breach of or default under any material contract,
obligation, indenture or other instrument to which such entity is a party or by
which such entity may be bound.
 
3.5           Compliance with Laws.  Borrower and each of its Subsidiaries are
in compliance with all applicable laws, rules, ordinances or regulations which
materially affect the operations or financial condition of Borrower and such
Subsidiaries, except to the extent that non-compliance could not reasonably be
expected to have a Material Adverse Effect.
 
3.6           Title.  Borrower has good and marketable title to all material
property and assets reflected in its financial statements delivered to Bank and
to all material property acquired by Borrower since the date of said financial
statements, free and clear of all Liens, except Permitted Liens.
 
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3.7           Financial Statements.  Borrower’s financial statements, including
its audited balance sheet as at December 28, 2008, and its audited statement of
operation, audited statement of stockholders equity, and audited statement of
cash flows for the fiscal year ended December 28, 2008, each prepared on a
consolidated basis, have heretofore been furnished to Bank, and (a) fairly
present in all material respects Borrower’s financial condition and results of
operations for the period covered thereby, (b) disclose all consolidated
liabilities of Borrower that were, as of such date, required to be reflected or
reserved against under GAAP, whether liquidated or unliquidated, fixed or
contingent, and (c) have been prepared in accordance with GAAP consistently
applied.  Since the dates of such financial statements there has been no
material adverse change in the consolidated financial condition or operations of
Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or
otherwise encumbered any of its material assets or properties except Permitted
Liens and security interests and liens in favor of Bank.
 
3.8           Litigation.  Except as disclosed in the Reference 10-K, there is
no litigation or proceeding pending or threatened against Borrower or any of its
property which could reasonably be expected to result in a Material Adverse
Effect.
 
3.9           No Subordination.  There is no agreement, indenture, contract or
instrument to which Borrower or any Guarantor is a party or by which Borrower or
any Guarantor may be bound that requires the subordination in right of payment
of any of Borrower's or such Guarantor’s obligations subject to this Agreement
or any other Loan Document to any other obligation of Borrower or such
Guarantor.
 
3.10           ERISA.  Borrower’s defined benefit pension plans (as defined in
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)),
meet, as of the date hereof, the minimum funding standards of Section 302 of
ERISA, and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.
 
3.11           [Reserved.]
 
3.12           OFAC.  No Loan Party or any of their Subsidiaries (i) is a person
whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2,
or (iii) is a person on the list of Specially Designated Nationals and Blocked
Persons or subject to the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order.
 
3.13           Patriot Act.  Each Loan Party, and each of their respective
Subsidiaries, is in compliance, in all material respects, with (i) the Trading
with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001) and the USA PATRIOT Improvement and Reauthorization Act of 2005 (Pub.
L. 109-177) (the “Patriot Act”).
 
3.14           Environmental Matters. Except as disclosed by Borrower to Bank in
writing prior to the date hereof and except as to matters which could not
reasonably be expected to have a
 
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Material Adverse Effect, Borrower and each other Loan Party is in compliance in
all material respects with all applicable federal or state environmental,
hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any of Borrower's or its
Subsidiaries’ operations and/or properties, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control
Act, as any of the same may be amended, modified or supplemented from time to
time.  None of the operations of Borrower or any of its Subsidiaries is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of any
toxic or hazardous waste or substance into the environment.  Neither Borrower
nor any Subsidiary has any material contingent liability in connection with any
release of any toxic or hazardous waste or substance into the environment.  None
of Borrower’s or any of its Subsidiaries’ properties or assets has been used by
Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally.
 
3.15           Regulatory Compliance.  Borrower is not an “investment company”
or a company “controlled” by an “investment company” under the Investment
Company Act of 1940, as amended.  No action has been taken or is currently
planned by Borrower, or any agent acting on its behalf, which would cause this
Agreement or the Note to violate Regulation U or any other regulation of the
Board of Governors of the Federal Reserve System, or to violate the Securities
and Exchange Act of 1934, in each case as in effect now or as the same may
hereafter be in effect.  Borrower is not engaged as one of its important
activities in extending credit for margin stock (under Regulations X, T and U of
the Federal Reserve Board of Governors).  Borrower has complied in all material
respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of
its Subsidiaries is a “holding company” or an “affiliate” of a “holding company”
or a “subsidiary company” of a “holding company” as each term is defined and
used in the Public Utility Holding Company Act of 2005.
 
3.16           Subsidiaries.  As of the date hereof, the entities named in
Schedule 3.16(a) hereto are the only Subsidiaries of Borrower, with the
Borrower’s direct or indirect percentage ownership interest and the state or
country of formation set forth in said Schedule.  Schedule 3.16(b) lists all
Special Purpose Entities existing as of the date hereof.
 
3.17           Other Agreements.  Neither Borrower nor any Guarantor is a party
to (or will enter into) any master foreign exchange agreement which covers
forward foreign exchange transactions, currency swap transactions, cross
currency rate swap transactions, currency options, or any other similar
transactions or any combination of any of the foregoing (however titled) with
any party (other than Bank) which includes covenants, defaults or other material
provisions which are more restrictive to Borrower or such Guarantor than those
contained herein.
 
3.18           No Event of Default.  Neither Borrower nor any Guarantor is now
in default in the payment of any of its material obligations, and there exists
no Event of Default, and no condition, event or act which with notice or lapse
of time, or both, would constitute an Event of Default.
 
 
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SECTION 4. AFFIRMATIVE COVENANTS
 
Until such time as Bank no longer has any commitment to extend credit to
Borrower hereunder, and all Obligations relating to the Term Loan are fully and
indefeasibly, paid, performed and satisfied, Borrower agrees that:
 
4.1           Use of Proceeds.  Borrower shall use the proceeds of the Term Loan
only as provided in Section 1 and not for any purpose prohibited under the Loan
Documents.  No part of the proceeds of the Term Loan or any other extension of
credit provided by Bank will be used, directly or indirectly: (a) for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended; or (b) in extending credit for margin stock (under
Regulations X, T and U of the Federal Reserve Board of Governors).
 
4.2           Payment of Obligations.  Borrower shall pay and discharge, and
shall cause each of its Subsidiaries to, promptly all taxes, assessments and
other governmental charges and claims levied or imposed upon it or its property,
or any part thereof; provided, however, that Borrower shall have the right in
good faith to contest any such taxes, assessments, charges or claims and,
pending the outcome of such contest, to delay or refuse payment thereof provided
that adequately funded reserves are established by it to pay and discharge any
such taxes, assessments, charges and claims.
 
4.3           Maintenance of Existence.  Borrower shall maintain and preserve
its, and each other Loan Party’s, existence, and all rights, franchises,
licenses and other authority necessary for the conduct of its business except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect, and shall maintain and preserve its property and assets,
equipment and facilities in good order, condition and repair (ordinary wear and
tear excepted).  Bank may, at reasonable times, visit and inspect any of
Borrower’s or its Subsidiaries’ properties.
 
4.4           Records.  Borrower shall keep and maintain adequate accounts and
records of its operations in accordance with GAAP and shall permit Bank to have
access thereto, to make examination and photocopies thereof, and to make audits
of Borrower’s assets, accounts and records on at least one day’s notice (unless
an Event of Default has occurred and is continuing) and during regular business
hours, provided that such audits shall be no more frequent than one time each
fiscal year, unless an Event of Default has occurred and is continuing.
 
4.5           Information Furnished.  Borrower shall furnish and with respect to
(a), (b), (c) and (j) below, cause each Guarantor to furnish to Bank:
 
(a)           Within forty-five (45) days after the close of each fiscal
quarter, its unaudited balance sheet as of the close of such fiscal quarter, and
its unaudited statement of operation, unaudited statement of stockholders
equity, and unaudited statement of cash flows for that fiscal quarter, each
prepared on a consolidated basis, with year-to-date totals and supportive
schedules, all prepared in accordance with GAAP.
 
(b)           Within one hundred twenty (120) days after the close of each
fiscal year, a copy of its balance sheet as of the close of such fiscal year,
and its statement of operation, statement of stockholders equity, and statement
of cash flows for that fiscal year, each
 
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prepared on a consolidated basis, examined and prepared on an audited basis by
independent certified public accountants selected by Borrower and reasonably
satisfactory to Bank (provided that Bank agrees that the current accountants of
Borrower are satisfactory), in accordance with GAAP, along with any management
letter provided by such accountants.
 
(c)           As soon as available, copies of any Form 10-Q quarterly reports,
Form 10-K annual reports, and any other material filings (such as a Form 8-K
current report regarding any material occurrence) made by Borrower with the SEC
or any other federal or state regulatory authority.  Anything required to be
delivered pursuant to Sections 4.5(a) or 4.5(b) above or this Section 4.5(c) (to
the extent any such financial statements, reports or proxy statements are
included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date on which the Borrower posts such reports, or provides a link thereto,
on the Borrower’s website on the Internet or the date on which such reports are
filed with the SEC and become publicly available.
 
(d)           Within forty-five (45) days after the close of each fiscal quarter
other than the last quarter of each fiscal year (and concurrent with the
delivery of the annual audited financial statements after the close of each
fiscal year), a compliance certificate, substantially in the form attached
hereto as Exhibit A (the “Compliance Certificate”), certifying, among other
things, with supporting calculations in reasonable detail, compliance with all
covenants under this Agreement, executed by Borrower’s chief financial officer
or other duly authorized officer.
 
(e)           Not later than twenty (20) days after and as of the end of each of
Borrower's fiscal months, either (i) a certificate, in form satisfactory to
Bank, executed by Borrower’s chief financial officer or other duly authorized
officer, certifying that the Wells Fargo Exposure, at such date, is zero, or
(ii) a compliance certificate, substantially in the form attached hereto as
Exhibit B, certifying, among other things, that Borrower is in full compliance
with the Minimum Unrestricted Liquidity covenants of Section 4.6, executed by
Borrower’s chief financial officer or other duly authorized officer, including a
schedule of the balances for each account as reported in the Borrower's
consolidated general ledger evidencing such compliance, and if requested by
Bank, copies of all deposit account, securities account and brokerage account
statements demonstrating compliance therewith, provided however that such
statements shall be provided as soon as they become commercially available, and
further, such statements may include downloads from internet-based bank balance
reporting and information systems.
 
(f)           Within ninety (90) days after the last day of each fiscal year,
Borrower’s operating budget and financial projections for the period through and
including the Term Loan Maturity Date.
 
(g)           Prompt written notice to Bank of: (i) any Event of Default or any
event, circumstance or condition that, with the passage of time, the giving of
notice or both, could result in an Event of Default, (ii) any litigation or
other matter which could reasonably be expected to have a Material Adverse
Effect, (iii) the occurrence of any default under, or any modification,
amendment or change to, the Indenture, any of the Wells Fargo Agreements or any
of the credit facilities provided thereunder, or (iv) any request for Borrower
to perform under the terms of any guaranty permitted hereunder.
 
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(h)           Prompt written notice to Bank of any change in Borrower's or any
Guarantor’s legal name or state of organization.
 
(i)           Within fifteen (15) days after Borrower knows that any Reportable
Event or Prohibited Transaction (as defined in ERISA) has occurred with respect
to any defined benefit pension plan of Borrower, a statement of an authorized
officer of Borrower describing such event or condition and the action, if any,
which Borrower proposes to take with respect thereto.
 
(j)           Such other financial statements, reports and information as Bank
may reasonably request from time to time.
 
(k)           Within thirty (30) days of the formation acquisition, dissolution
or disposition of any Subsidiary, including Special Purpose Entities, notice of
such formation acquisition, dissolution or disposition.
 
4.6           Minimum Unrestricted Liquidity.  Borrower, on a consolidated
basis, shall maintain: Eligible Assets with a value not less than two (2.00)
times the outstanding Wells Fargo Exposure with a minimum amount of such
liquidity equal to 100% of the Wells Fargo Exposure to be held in accounts
maintained and domiciled in the United States consisting of US Dollar
denominated instruments and deposits, in all instances to be determined as of
the end of each of Borrower’s fiscal months.  For purposes of calculating U.S.
Dollar equivalent value of Eligible Assets not denominated in U.S. Dollars, Bank
will convert the value of such assets as of the applicable statement date based
on Bank’s foreign exchange closing rates for such date.

4.7           Minimum Unrestricted Liquidity at Bank.  Unless and until Borrower
has granted to Bank, and Bank holds, a perfected, first-priority security
interest in cash collateral acceptable to Bank in an amount not less than one
hundred five percent (105%) of the outstanding principal amount of the Term
Loan, Borrower, on a consolidated basis, shall at all times maintain Eligible
Assets held in general (i.e. not special or limited, or any accounts in the
nature of a bailment or trust) deposit accounts maintained with Bank, that are
identified in the definition of collateral in the Security Agreement, consisting
of U.S. dollar-denominated time deposit, certificate of deposit, demand deposit,
money market account, overnight bank deposits, or a combination thereof, equal
to or greater than (a) for any date of determination occurring from the Closing
Date until one day prior to the first anniversary of the Closing Date, the sum
of (x) Ten Million Dollars ($10,000,000), plus (y) the amount of interest due or
to become due under the Term Loan during the period from such date of
determination through the earlier of the date that is 365 days after such date
of determination and the Term Loan Maturity Date (such period, the “Subject
Period”); and (b) from the first anniversary of the Closing Date and at all
times thereafter, the amount of principal and interest due or to become due in
respect of the Term Loan during the applicable Subject Period, in each case
determined as of the end of each month.  The calculation of the amount of
interest accruing, due or to become due for purposes of this Section 4.7 shall
be made based on the applicable interest rate(s) in effect with respect to the
Term Loan on the first day of the fiscal quarter during which such Subject
Period begins, as though such rate(s) will remain in effect during the entire
Subject Period.

4.8           Total Liabilities to Tangible Net Worth.  Borrower, on a
consolidated basis, shall maintain a ratio of Total Liabilities to Tangible Net
Worth of not greater than 2.00 to 1.00, determined as of the end of each fiscal
quarter.

 
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4.9           Minimum Profitability.  Borrower, on a consolidated basis, shall
maintain net income (determined in accordance with GAAP) not less than Twenty
Five Million Dollars ($25,000,000) in each period of four consecutive fiscal
quarters, determined as of each fiscal quarter end on a rolling four-quarter
basis.  Borrower shall not have a single quarterly net loss of more than Thirty
Million Dollars ($30,000,000), and Borrower shall not have a cumulative net loss
in any period of two consecutive quarters in aggregate of more than Thirty
Million Dollars ($30,000,000), in each case calculated on a GAAP basis and
determined as of the last day of each fiscal quarter.

4.10           Insurance.  Borrower shall maintain and keep in force insurance
with companies acceptable to Bank and in such amounts and types, including
without limitation fire and public liability insurance, as is usual in the
business carried on by Borrower, or as Bank may reasonably request.  Such
insurance policies must be in form and substance reasonably satisfactory to
Bank.  Borrower shall maintain adequate worker's compensation insurance.

4.11           Maintenance of Account for Payment of Amounts Due to Bank.
 
(a)           Borrower shall at all times: (i) maintain with Bank a deposit
account that Bank is authorized to charge for any amounts then due to Bank from
Borrower under this Agreement, the Note or any other Loan Documents, including
interest, principal, fees, costs, expenses or other amounts due to Bank
hereunder or thereunder, provided that, so long as no Event of Default (or
event, circumstance or condition that, with the passage of time, the giving of
notice or both, could result in an Event of Default) then exists, Bank shall
provide an invoice at least two (2) days in advance of such debit for regularly
scheduled payments of principal and/or interest and shall provide an invoice and
at least ten (10) days’ advance notice of all other debits, and (ii) ensure that
such account has immediately available funds sufficient to pay any such amounts
payable to Bank as and when they become due and payable.
 
(b)           In addition, Borrower shall immediately deposit unrestricted and
unencumbered cash into one or more general deposit accounts (i.e. not special or
limited, or any accounts in the nature of a bailment or trust) maintained with
Bank that are identified in the definition of “Collateral” in the Security
Agreement, and at all times thereafter maintain in such account(s), funds in an
amount not less than one hundred five percent (105%) of the outstanding
principal amount of the Term Loan (the “Minimum Balance”) if, as of March 27,
2010, all of Borrower’s 0.75% Senior Convertible Debentures due 2027 outstanding
as of Closing Date have not been converted or exchanged in their entirety into
cash, equity securities of Borrower or Permitted Refinancing Indebtedness;
provided that (i) the consideration (whether cash, securities or other property)
paid or payable, and the Indebtedness incurred or assumed, in connection
with any such conversion or exchange shall be limited to and shall consist
exclusively of:  (A) payment of cash in an aggregate amount not greater than
$50,000,000, (B) distribution of auction-rate securities by Borrower with an
aggregate face value not greater than $20,000,000; and (C) Permitted Refinancing
Indebtedness in an aggregate amount not to exceed the outstanding principal
amount of the debentures being converted or exchanged, and (ii) in no event
shall Borrower be permitted to effect any such conversion or exchange, or any
refinancing of such debentures, unless Borrower shall have delivered to Bank a
Compliance Certificate, certifying among other things, Borrower’s compliance, on
an actual and pro forma basis, with each of the financial covenants set forth
herein as of date of such conversion or exchange, and immediately after giving
effect to the transactions related thereto.  For the sake of clarity, subject to
 
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clause (ii) above, Borrower’s 0.75% Senior Convertible Debentures due 2027 may
be refinanced using exclusively (1) the net cash proceeds from the substantially
contemporaneous sale and issuance of equity securities of Borrower, (2) the net
cash proceeds from the substantially contemporaneous issuance of Indebtedness
subordinated to Bank on terms satisfactory to Bank in its sole discretion,
(3) Permitted Refinancing Indebtedness, or (4) any combination of means
specified in (1), (2) and (3) of this sentence.  Such balances shall remain
subject to Bank’s rights of setoff under applicable law, and Bank is hereby
authorized to decline to honor any drafts thereon or any requests, instructions
or orders by Borrower or any other Person with respect to the withdrawal or
disposition of any of the funds contained in such accounts or with respect to
the payment or any other transfer of any part of such balances if doing so would
result in a violation of the Minimum Balance requirement.

4.12           Guaranties.  The payment and performance of all indebtedness and
other Obligations of Borrower to Bank arising in connection with the Term Loan
shall be jointly and severally guaranteed by (a) SunPower Corporation, Systems
(formerly known as PowerLight Corporation), a Delaware corporation, (b) SunPower
North America, LLC, a Delaware limited liability company (successor in interest
to SunPower North America, Inc., a Delaware corporation), and (c) each other
Material Domestic Subsidiary from time to time, as evidenced by and subject to
the terms of one or more guaranties, each in substantially the form of the
Continuing Guaranty.  In the event Borrower or any Subsidiary creates or
acquires any Subsidiary that qualifies as a Material Domestic Subsidiary, or if
any Subsidiary becomes a Material Domestic Subsidiary, Borrower shall promptly
notify Bank of the same and Borrower and such Material Domestic Subsidiary shall
take all such action as may be reasonably required by Bank to cause such
Material Domestic Subsidiary to guaranty, jointly and severally, the Obligations
of Borrower relating to the Term Loan within 30 days after its qualifying as a
Material Domestic Subsidiary.

4.13           Taxes and Liabilities.  Borrower shall pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except (a) such as Borrower or such
Guarantor may in good faith contest or as to which a bona fide dispute may
arise, and (b) for which Borrower has made provision, to the satisfaction of
Bank, for eventual payment thereof in the event Borrower or such Guarantor is
obligated to make such payment.

4.14           Additional Requirements.  Upon Bank’s demand, Borrower shall
promptly take such further action and execute all such additional documents and
instruments in connection with this Agreement and the other Loan Documents as
Bank in its reasonable discretion deems necessary, and promptly supply Bank with
such other information concerning its affairs as Bank may reasonably request
from time to time.

4.15           Litigation and Attorneys' Fees.  Upon Bank’s demand, Borrower
shall promptly pay to Bank reasonable attorneys' fees, including the reasonable
estimate of the allocated costs and expenses of in-house legal counsel and
staff, and all costs and other reasonable expenses paid or incurred by Bank in
collecting, modifying or compromising the Term Loan or in enforcing or
exercising its rights or remedies created by, connected with or provided for in
this Agreement and the other Loan Documents.  If any judicial action,
arbitration or other proceeding is commenced, only the prevailing party shall be
entitled to attorneys' fees and court costs.

 
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4.16           Bank Expenses.  Upon Bank’s request, Borrower shall pay or
reimburse Bank for all reasonable costs, expenses and fees incurred by Bank in
preparing and documenting this Agreement and the Term Loan, and all amendments
and modifications to any Loan Documents, including but not limited to all filing
and recording fees, costs of appraisals, insurance and reasonable attorneys'
fees, including the reasonable estimate of the allocated costs and expenses of
in-house legal counsel and staff.

4.17           Domestic Subsidiary Asset Limit.  Borrower shall ensure that the
book value of the assets of Domestic Subsidiaries which are not Guarantors
represent no more than twenty-five percent (25%) of the book value of Borrower’s
consolidated assets (based on the then most recent fiscal year end financial
statement then delivered or deemed delivered to Bank hereunder).

4.18           Post-Closing Matters.  Not later than forty-five (45) days after
the Closing Date, Borrower shall deliver to Bank evidence satisfactory to Bank
of the reassignment and release of security interests evidenced by filings with
the United States Patent and Trademark Office relating to any Loan Party’s
intellectual property.

SECTION 5. NEGATIVE COVENANTS

Until such time as Bank no longer has any commitment to extend credit to
Borrower hereunder, and all Obligations relating to the Term Loan are fully and
indefeasibly, paid, performed and satisfied, Borrower agrees that:

5.1           Liens.  Borrower shall not, and shall not permit any Guarantor to,
create, assume or suffer to exist any Lien on any of its property, whether real,
personal or mixed, now owned or hereafter acquired, or upon the income or
profits thereof, except for Liens in favor of Bank and Permitted
Liens.  Borrower shall not, and shall not permit any Guarantor to, agree or
consent to any restriction on Borrower’s or such Guarantor’s ability to create,
assume or suffer to exist any Lien on any of its property to secure its
obligations under this Agreement, except (i) agreements in favor of the Bank or
(ii) prohibitions or conditions under (A) purchase money debt or capital lease
obligation solely to the extent that the agreement or instrument governing such
purchase money debt or capital lease obligation prohibits a Lien on the property
acquired with the proceeds of such purchase money debt or capital lease, and (B)
the Wells Fargo Agreements as in effect on the date hereof.

5.2           Indebtedness.  Borrower shall not incur, or cause or permit any
Guarantor to incur, Indebtedness, except Permitted Indebtedness.

5.3           Specified Transactions.  Borrower shall not, and shall not cause
or permit any Guarantor to, enter into any Specified Transaction; provided
however:

(a)           Borrower and Guarantors may enter into a Specified Transaction
with respect to which each of the following conditions has been satisfied: (i)
the applicable transaction has been approved by the Board of Directors of the
Person whose assets or equity interests are being acquired, or which is merging
with Borrower or a Guarantor; (ii) the Total Non-Stock Consideration paid or
payable by Borrower and/or any Subsidiary in such transaction, taken together
with all other Total Non-Stock Consideration paid or payable during such fiscal
year, does not exceed Two Hundred Million Dollars ($200,000,000); (iii) Borrower
(if a party thereto) is the surviving or successor Person, or

 
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(if Borrower is not a party thereto) a Guarantor is the surviving or successor
Person, (iv) the assets so acquired are not and will not be subject to any Lien
following the effective date of such transaction, except for Permitted Liens,
(v) no Event of Default shall have occurred and be continuing or shall result
therefrom, and (vi) as of the effective date of and after giving effect to such
transaction, Borrower would be in compliance on a pro forma basis, with each of
the financial covenants in Sections 4.6, 4.7, 4.8, 4.9, 4.17 and 5.9; and
 
(b)           Borrower and Guarantors may enter into a Specified Transaction
regardless of the value of Total Non-Stock Consideration so long as: (i) the
applicable transaction has been approved by the Board of Directors of the Person
whose assets or equity interests are being acquired, or which is merging with
Borrower or a Guarantor, (ii) such Specified Transaction (or series of related
transactions) involves no unaffiliated third parties, and (iii) such Specified
Transaction involves only (A) the Borrower and one or more Subsidiaries (and
Borrower is the surviving or successor Person in such transaction), or (B) two
or more Subsidiaries (and if a Guarantor is a party in a transaction with a
non-Guarantor, such Guarantor is the surviving or successor Person in such
transaction).

5.4           Sale of Assets, Change in Business, Liquidation or Merger.  In no
event shall Borrower:  (a) merge into or consolidate with any other entity; (b)
make any substantial change in the nature of Borrower's business as conducted as
of the date hereof; (c) cause or permit any Guarantor to engage in any material
business substantially unrelated to Borrower’s business; or (iv) sell, lease,
transfer or otherwise dispose of all or a material portion of Borrower's
consolidated assets, or cause or permit any Material Subsidiary to do so, except
transfers by and among Borrower and Subsidiaries in the ordinary course of
business, and with “a material portion” defined for the purpose of this covenant
as twenty-five (25%) or more of the book value of such consolidated assets
(based on the then most recent fiscal year end financial statements then
delivered or deemed delivered to Bank hereunder) in any fiscal year.

5.5           Guaranties.  Borrower shall not, and shall not cause or permit any
Guarantor to, guaranty, become liable in any way as surety, endorser (other than
as endorser of negotiable instruments for deposit or collection in the ordinary
course of business), accommodation endorser or otherwise for Guaranteed
Indebtedness, other than (a) in the ordinary course of business: (i) Borrower
may guarantee the obligations of any Guarantor or any other Subsidiary, and (ii)
any Guarantor may guarantee (A) the obligations of Borrower or (B) the
obligations of other Guarantor or any other Subsidiary, in each case for any
obligation other than obligations for borrowed money, (b) each Guarantor may
provide an unsecured guaranty of up to Fifty Million Dollars ($50,000,000) of
Borrower’s principal Indebtedness arising under the Wells Fargo Line of Credit
plus accrued and unpaid interest on such amount, (c) guaranties in favor of
bonding companies in connection with obligations under bonding contracts entered
into in the ordinary course of business, pursuant to which such bonding
companies issues bonds or otherwise secures performance of Borrower and
Subsidiaries for the benefit of their customers and contract counterparties, (d)
guarantees made by Borrower for the account of Subsidiaries with respect to
liabilities under Hedge Agreements with nationally recognized financial
institutions reasonably satisfactory to Bank pursuant to bona fide hedging
transactions and not for speculation; (e) unsecured guarantees by Borrower of
secured or unsecured indebtedness of SPML to International Finance Corporation
in an aggregate amount (when added to Indebtedness of the type described in
clause (vi) of the definition of Permitted Indebtedness) not to exceed, at any
time, Seventy Five Million Dollars ($75,000,000), subject to the terms of such
clause (vi), and (f) guaranties of liabilities that constitute Permitted
Indebtedness.  In no event
 
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shall any Foreign Subsidiary provide a guaranty with respect to Indebtedness of
Borrower or any Guarantor unless a like guaranty is provided to Bank with
respect to the Obligations.

5.6           Loans, Advances and Investments.  Borrower shall not, and shall
not permit any Guarantor to, make any loans, advances or other investments,
except for Permitted Investments.

5.7           Redemption of Stock.  Borrower shall not declare or pay any
dividend or distribution either in cash, stock or any other property on
Borrower's stock now or hereafter outstanding, nor redeem, retire, repurchase or
otherwise acquire any shares of any class of Borrower's stock now or hereafter
outstanding (other than repurchases or the like from employees, consultants,
officers, and directors in connection with Borrower’s board-approved stock
plan); nor agree (or cause or permit any Subsidiary to agree) with any third
party to prohibit, condition or restrict the payment of dividends and
distributions by such Subsidiary to Borrower or to another Subsidiary.

5.8           Affiliate Transactions.  Neither Borrower nor any Guarantor shall
enter into any transaction or transfer any property to any affiliate, except for
value received in the normal course of business and for an amount, as would be
conducted and charged with an unrelated or unaffiliated entity in an arms’
length transaction, except that the following in any event shall be permitted:

(a)           transactions between Borrower and its Subsidiaries and between its
Subsidiaries in the ordinary course of business, as conducted from time to time;

(b)           transactions constituting the incurrence of Permitted Indebtedness
and Permitted Investments;

(c)           the payment of reasonable fees, compensation, or employee benefit
arrangements to, and any indemnity provided for the benefit of, officers,
employees, and directors; and

(d)           loans or advances to employees in the ordinary course of business
in compliance with applicable law.

5.9           Capital Expenditures.  Borrower shall not, and shall not cause or
permit its Subsidiaries to, purchase fixed assets in the form of property,
plant, equipment or fixtures in excess of: (a) Five Hundred Million Dollars
($500,000,000) during fiscal year 2009, (b) Five Hundred Sixty Million Dollars
($560,000,000) during fiscal year 2010, or (c) Five Hundred Twenty Million
Dollars ($520,000,000) during fiscal year 2011, in each case calculated on a
consolidated basis.  For purposes of calculating such expenditures to determine
compliance with the above limitation, the amount shall be that represented as
purchase of such items on the Consolidated Statement of Cash Flows of the
Borrower's fiscal year-end financial statement.

5.10           Cash Limits.  Borrower shall not cause or permit SPML’s cash,
cash equivalents and marketable securities at any time to exceed, in any fiscal
month, an aggregate average daily amount of Twenty-Five Million Dollars
($25,000,000).  Borrower shall not cause or permit SPSA’s cash, cash equivalents
and marketable securities at any time to exceed, in any fiscal month, an
aggregate average daily amount of Fifty Million Dollars ($50,000,000).

 
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SECTION 6. EVENTS OF DEFAULT
 
Any one or more of the following events shall constitute an event of default
(each an “Event of Default”) under this Agreement:

6.1           Borrower shall fail to pay as and when due, any principal,
interest, fees or other amounts owing under the Note, this Agreement or any of
the other Loan Documents.

6.2           Borrower shall default in the due performance or observance of, or
compliance with, any of the terms, provisions, covenants, conditions,
obligations or agreements of Sections 4.1, 4.5, 4.6 through 4.9, 4.11, 4.12 and
4.17 or Section 5 of this Agreement.

6.3           Borrower or any Guarantor shall default in the due performance or
observance of or compliance with any other term, provision, covenant, condition,
obligation or agreement of the Loan Documents and, as to any default under such
other term, provision, condition, covenant, obligation or agreement that can be
cured, has failed to cure the default within thirty (30) days after the
occurrence thereof.

6.4           Any certificate, representation or warranty made by the Borrower
(or any of its officers, directors or representatives) herein or by any Loan
Party (or any of their respective officers, directors or representatives) in
connection with this Agreement, the Guaranties or the other Loan Documents shall
prove to have been misleading, false, untrue or incorrect in any material
respect when furnished, made or deemed made.

6.5           Any Loan Party or any Material Subsidiary shall for any reason
cease to be Solvent, or any Loan Party or any Material Subsidiary shall be
unable generally to pay its debts as such debts become due.

6.6           The commencement as to any Loan Party or any Material Subsidiary
of any voluntary or involuntary case or proceeding under any Debtor Relief Law
(and with respect to any involuntary case or proceeding, either such proceeding
shall remain undismissed or unstayed and in effect for a period of sixty (60)
days or the court shall have entered a decree or order granting the relief
sought in such case or proceeding).

6.7           Any Loan Party or any Material Subsidiary shall make a general
assignment for the benefit of its creditors.

6.8           The appointment, or commencement of any proceedings for the
appointment, of a receiver, trustee, custodian or similar official for all or
substantially all of any Loan Party’s or any Material Subsidiary’s property.

6.9           If any material portion of any Loan Party’s or any Material
Subsidiary’s assets is attached, seized, subjected to a writ or distress
warrant, or is levied upon, and the same is not discharged before the earlier of
10 days after the date it first arises.

6.10           The revocation of the Continuing Guaranty or any other guaranty
of a Guarantor with respect to the Obligations.

6.11           Any default in the payment or performance of any obligation, or
any defined event of default, under the terms of any contract or instrument
(other than any of the Loan Documents)

 
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pursuant to which Borrower, any Guarantor or any Material Subsidiary has
incurred any debt or other liability to any Person, including Bank, and, if the
debt or other liability is owed to a party other than Bank, such default
accelerates or causes or permits to become immediately due and payable an
amount, individually or in the aggregate, in excess of Ten Million Dollars
($10,000,000).

6.12           Borrower is called upon to satisfy any guaranty obligation or
simultaneous guaranty obligations permitted hereunder with an aggregate
liability in excess of Ten Million Dollars ($10,000,000), where Borrower's
performance of such obligations, as substantiated by the beneficiary thereof, is
not contingent on any additional condition, including the passage of time.

6.13           The filing of a notice of judgment lien(s) in excess of an
aggregate of Ten Million Dollars ($10,000,000) against Borrower or any Loan
Party; or the recording of any abstract(s) of judgment in excess of an aggregate
of Ten Million Dollars ($10,000,000) against Borrower or any Loan Party in any
county in which Borrower or such Loan Party has an interest in real property; or
the service of a notice of levy and/or of a writ of attachment or execution, or
other like process, in excess of an aggregate of Ten Million Dollars
($10,000,000) against the assets of Borrower or any Loan Party; or the entry of
a judgment(s) in excess of an aggregate of Ten Million Dollars ($10,000,000)
against Borrower or any Loan Party.

6.14           The dissolution, liquidation or termination of existence of
Borrower or, except as otherwise expressly permitted under this Agreement, any
other Loan Party; or Borrower or, except as otherwise expressly permitted under
this Agreement, any such other Loan Party, or any of its directors, stockholders
or members, shall take action seeking to effect the dissolution or liquidation
of Borrower or such other Loan Party.  The dissolution of a Guarantor shall not
constitute an Event of Default if the assets and liabilities of such Guarantor
are transferred to Borrower or to another Guarantor by reason of such
dissolution.

6.15           A Change in Control shall occur.

Upon the occurrence and during the continuance of an Event of Default, (i) the
obligation, if any, of Bank to make the Term Loan or provide further extensions
of credit under any of the Loan Documents shall immediately cease and terminate,
(ii) Bank may, without notice to the Borrower, declare the Term Loan, all
interest thereon and all other Obligations to be immediately due and payable,
whereupon the Term Loan, all such interest and all such Obligations shall become
and be immediately due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that upon the occurrence of an Event of Default
described in Sections 6.6, 6.7, 6.8 or 6.9 above, (i) Bank’s obligation to make
the Term Loan or provide further extensions of credit shall automatically
terminate, and (ii) the Term Loan, all interest thereon and all other
Obligations shall automatically become immediately due and payable.  Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation, the right to, without notice
or demand do any one or more or all of the following: (a) resort to any or all
security for any credit subject hereto; (b) exercise its banker’s lien or right
of setoff; (c) terminate any Hedge Agreements, including any and all foreign
exchange contracts, interest rate swaps or similar agreements heretofore or
hereafter entered into between Borrower and Bank; (d) apply to the Obligations
any (1) balances and deposits of Borrower it holds, or (2) any amount held by
Bank owing to or for the credit or the account of Borrower, (e) place a “hold”
on any account maintained with Bank and (f) exercise any or all of the rights of
a beneficiary or secured party pursuant to applicable law.  All rights,

 
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powers and remedies of Bank may be exercised at any time by Bank and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.

SECTION 7. GENERAL PROVISIONS

7.1           Additional Remedies.  The rights, powers and remedies given to
Bank hereunder shall be cumulative and not alternative and shall be in addition
to all rights, powers and remedies given to Bank by law against Borrower or any
other Person, including but not limited to Bank's rights of setoff and banker's
lien.  To the full extent permitted by law, Borrower waives demand and notice of
every kind; and the right to assert the defense of any statute of
limitations.  Bank may delay the credit of any item of payment based upon Bank's
schedule of funds availability, and interest under the Term Loan shall accrue
until the funds are deemed collected.

7.2           Nonwaiver.  Any forbearance or failure or delay by Bank in
exercising any right, power or remedy hereunder shall not be deemed a waiver
thereof and any single or partial exercise of any right, power or remedy shall
not preclude the further exercise thereof.  No waiver shall be effective unless
it is in writing and signed by an officer of Bank.

7.3           Inurement.  The benefits of this Agreement and the other Loan
Documents shall inure to the successors and assigns of Bank and the permitted
successors and assigns of Borrower, but any attempted assignment by Borrower
without Bank's prior written consent shall be null and void.

7.4           Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
BE GOVERNED BY AND CONSTRUED ACCORDING TO THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, WITHOUT
REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.  Borrower and Bank
and any of their respective successors or assigns consent to the jurisdiction of
ay competent court thereof and consent to service of process by any authorized
means.

7.5           Severability.  Should any one or more provisions of this Agreement
or any other Loan Document be determined to be illegal or unenforceable, all
other provisions of such document shall nevertheless be effective.

7.6           Controlling Document.  In the event of any inconsistency between
the terms of this Agreement and any other Loan Document, the terms of this
Agreement shall prevail.

7.7           Construction.  The section and subsection headings herein are for
convenient reference only and shall not limit or otherwise affect the
interpretation of this Agreement.

7.8           Amendments.  This Agreement may be amended only in writing signed
by all parties hereto.
 
7.9           Counterparts.  Borrower and Bank may execute one or more
counterparts to this Agreement, each of which shall be deemed an original, but
all such counterparts when taken together, shall constitute one and the same
agreement.
 
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7.10           Notices.  Unless otherwise provided for in this Agreement, any
notices or other communications provided for or allowed hereunder shall be
effective only when given by one of the following methods and addressed to the
respective party at its address given with the signatures at the end of this
Agreement and shall be considered to have been validly given: (a) if sent by
hand delivery, upon delivery; (b) on the third business day after mailing, if
mailed, first class postage prepaid, with the United States Postal Service; (c)
on the next business day, if sent by overnight courier service of recognized
standing; (d) upon electronic confirmation of receipt, if faxed or (e) upon
telephoned confirmation of receipt, if e-mailed.  The addresses to which notices
or demands are to be given may be changed from time to time by notice delivered
as provided above.

7.11           Integration Clause.  Except for the other Loan Documents, this
Agreement constitutes the entire agreement between Bank and Borrower regarding
the Term Loan, and all prior oral or written communications between Borrower and
Bank shall be of no further effect or evidentiary value.

7.12           Disputes.  To the extent permitted by law, in connection with any
claim, cause of action, proceeding or other dispute concerning any of the Loan
Documents (each, a “Claim”), Borrower and Bank expressly, intentionally and
deliberately waive any right each may otherwise have to trial by jury.  In the
event that the waiver of jury trial set forth in the previous sentence is not
enforceable under the law applicable to this Agreement, Borrower and Bank agree
that any Claim, including any question of law or fact relating thereto, shall,
at the written request of Borrower or Bank, be determined by judicial reference
pursuant to the law applicable to this Agreement.  Borrower and Bank shall
select a single neutral referee, who shall be a retired state or federal
judge.  In the event that Borrower and Bank cannot agree upon a referee, the
court shall appoint the referee.  The referee shall report a statement of
decision to the court.  Nothing in this paragraph shall limit the right of
Borrower or Bank at any time to exercise self-help remedies, foreclose against
collateral or obtain provisional remedies.  Borrower and Bank shall bear the
fees and expenses of the referee equally, unless the referee orders
otherwise.  The referee shall also determine all issues relating to the
applicability, interpretation and enforceability of this paragraph.  Borrower
and Bank acknowledge that if a referee is selected to determine the Claims, then
the Claims will not be decided by a jury.
 
7.13           Patriot Act Notice.  Bank is subject to the USA PATRIOT
Improvement and Reauthorization Act of 2005 (the “Patriot Act”) and hereby
notifies Borrower that, pursuant to the requirements of the Patriot Act, Bank is
required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow Bank to identify Borrower in accordance with the
Patriot Act.

7.14           Setoff.  In addition to any rights now or hereafter granted under
the Loan Documents or applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
Bank is hereby authorized at any time or from time to time, without notice to
Borrower or any other Person, any such notice being hereby expressly waived, to
offset and to appropriate and to apply any and all balances held by it at any of
its offices for the account of Borrower (regardless of whether such balances are
then due to Borrower) and any other properties or assets at any time held or
owing by Bank or that holder to or for the credit or for the account of Borrower
against and on account of any of the Obligations that are not paid when due.

 
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7.15           Indemnity.  Borrower shall indemnify and hold Bank and each of
its employees, attorneys, consultants, representatives and agents and their
respective successors and assigns (each an “Indemnified Person”), harmless, from
and against any and all:  (i) suits, actions, or proceedings in any court or
forum, at law, in equity or otherwise; (ii) costs, fines, deficiencies, or
penalties; (iii) asserted claims or demands by any Person; (iv) arbitration
demands, proceedings or awards; (v) damages, losses, liabilities and expenses
(including reasonable attorneys’ fees and disbursements and other costs of
collection, defense or appeal); (vi) enforcement of rights and remedies; and
(vii) criminal, civil or regulatory investigations (each an “Indemnified Claim”)
that may be instituted or asserted against or incurred by any such Indemnified
Person as the result of credit having been extended or not extended under this
Agreement or the other Loan Documents or otherwise in connection with or arising
out of the transactions contemplated hereunder or thereunder, including any
Indemnified Claim for environmental liabilities and legal costs and expenses of
disputes between any Loan Party and Bank; provided, that Borrower shall not be
liable for indemnification of an Indemnified Person to the extent that any such
Indemnified Claim is finally determined by a court of competent jurisdiction to
have resulted solely from such Indemnified Person’s gross negligence or willful
misconduct.  This Section 7.15 shall survive the termination of this Agreement.

7.16           Confidentiality.  Bank agrees that material, non-public
information regarding the Borrower or the Guarantors shall be treated by the
Bank in a confidential manner, and Bank shall use commercially reasonable
efforts (equivalent to the efforts the Bank applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all information provided to it by Borrower or any Guarantor, except for
disclosures from time to time:  (i) to attorneys for and other advisors,
accountants, auditors, and consultants to the Bank (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential), (ii) to subsidiaries and affiliates of the Bank (provided that
such subsidiaries and affiliates have agreed to treat such information as
confidential in accordance with this Section 7.16), (iii) as may be required by
statute, decision, or judicial or administrative law, order, rule, or
regulation, (iv) as requested or required by any governmental authority pursuant
to any subpoena or other legal process, (v) as to any such information that is
or becomes generally available to the public (other than as a result of
prohibited disclosure by Bank), (vi) in connection with any assignment or
participation of Bank’s interest under this Agreement and the other Loan
Documents, provided that any such assignee or participant shall have agreed in
writing to receive such information hereunder subject to the terms of this
Section 7.16 (and any such assignee or participant or potential assignee or
participant may disclose such information to persons employed or engaged by them
as described in clause (i) above), and (vii) in connection with any litigation
or other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents.  Confidential
information does not include information that: (i) is in the public domain or in
Bank’s possession when disclosed to Bank, or becomes part of the public domain
after disclosure to Bank; (ii) is disclosed to Bank by a third party, if Bank
does not know that the third party is prohibited from disclosing the
information, or (iii) ceases to be confidential through no fault of Agent or
such Lender.  Notwithstanding the foregoing, Bank is authorized to release
information concerning Borrower’s and its Subsidiaries’ credit records and
financial condition to other creditors, credit bureaus, credit reporting
agencies, credit reporters, and guarantors hereunder, or pursuant to an order
from a governmental agency or court, or among departments of Bank, and its
affiliates.  Bank is authorized to obtain credit reports, copies of tax returns
and other information regarding

 
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Borrower and its Subsidiaries and to take such other steps as Bank deems
appropriate to verify the information provided in connection herewith.
 
7.17           Term.  This Agreement shall become effective on the Closing Date
and shall continue in full force and effect until all Obligations relating to
the Term Loan have been irrevocably and indefeasibly repaid in full or Bank no
longer has any obligation to make credit extensions under this Agreement.  The
obligations of Borrower to indemnify the Indemnified Persons pursuant to Section
7.15 shall survive until all applicable statute of limitations periods with
respect to actions that may be brought against such Indemnified Persons have
run.
 
[Signature page follows]

 
 
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THIS AGREEMENT is executed on behalf of the parties by their duly authorized
representatives as of the date first above written.

SUNPOWER CORPORATION
 
 
/s/ Dennis V. Arriola 
By:          Dennis V. Arriola                                             
Title:          SVP & CFO                                             
 
Address:
 
3939 North First Street
San Jose, CA  95134
Attn: Chief Financial Officer
Fax: (408) 240-5400
 
 
UNION BANK, N.A.
 
 
/s/ J. William Bloore 
By:          J. William Bloore                                             
Title:          Vice President 
 
Address:
 
601 East Potrero Grande Drive
Monterey Park, California  91754
Attn:  Commercial Loan Operations
Fax:  (323) 720-2252
 
East Bay Corporate Banking Group
200 Pringle Avenue, Suite 500
Walnut Creek, CA  94596-3570
Attn:  J. William Bloore
Fax:  (925) 943-7442
 
       

[Signature Page to Loan Agreement]

 

 
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EXHIBIT A

[FORM OF] QUARTERLY COMPLIANCE CERTIFICATE
 
To:           Union Bank, N.A.
Commercial Loan Operations
601 East Potrero Grande Drive
Monterey Park, CA  91754
Facsimile: (323) 720-2252
 
with a copy to:
 
Union Bank, N.A.
Attention:  J. William Bloore
East Bay Corporate Banking Group
200 Pringle Avenue, Suite 500
Walnut Creek, CA  94596
 
Re:           Compliance Certificate as of and for period ending: _____________
__, 20__
 
Ladies and Gentlemen:
 

This certificate (this “Compliance Certificate”) is submitted pursuant to the
Loan Agreement, dated as of April 17, 2009 (as amended, modified, supplemented,
restated or renewed from time to time, the “Loan Agreement”) by and between
SUNPOWER CORPORATION, a Delaware corporation (the “Borrower”) and UNION BANK,
N.A. (the “Bank”).  All capitalized terms used herein shall have the meanings
specified in the Loan Agreement unless otherwise defined herein.
 
The undersigned hereby certifies that: (a) [he][she] is the acting and incumbent
Chief Financial Officer of Borrower and Parent, and (b) in such capacity,
[he][she] is authorized to execute this Compliance Certificate on behalf of
Borrower in connection with the Loan Agreement.
 
The undersigned has reviewed the terms and conditions of the Loan Agreement and
the definitions and provisions contained in the Loan Agreement, and, has made,
or have caused to be made under the supervision of the undersigned, such
examination or investigation as is necessary to enable the undersigned to
express an informed opinion, and to provide a certification, as to the matters
referred to herein.
 
The undersigned hereby further represents, warrants and certifies that:
 
(a) Borrower is in complete and strict compliance, as of, and for the period
ending, __________ __, 20__ (the “Compliance Date”), with all agreements,
conditions and covenants contained in the Loan Agreement and the other Loan
Documents, except as noted below.
 
(b) The representations and warranties of Borrower contained in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects as of the Compliance Date as if made on such date (or, in the case of
representations and warranties stated as having been made only as of the Closing
Date, such representations and warranties remain true and correct in all
material respects as of the Closing Date); provided, however, the
 
 
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foregoing materiality qualification does not apply to those representations and
warranties that already are qualified or modified by materiality in the text
thereof.
 
(c) There exists no Event of Default nor any event, circumstance or condition
that, with the passage of time, the giving of notice or both, could reasonably
be expected to result in an Event of Default under the Loan Agreement or any of
the other Loan Documents.
 
(d) Borrower is in compliance with each of the covenants in Sections 4.6, 4.7,
4.8, 4.9, 4.17, 5.9 and 5.10 of the Loan Agreement, as of, and for the period
ending on, the Compliance Date, and attached hereto as Schedule 1 is a true and
correct copy of the calculations of such financial covenants, prepared by the
undersigned.
 
(e) Attached to such Schedule 1 are true, correct and complete copies of the
documents and work sheets supporting the above certifications..
 
(f) Since December 28, 2008, there has been no Material Adverse Effect.
 
(g) Borrower is in compliance with each of the reporting and notice covenants in
Section 4.5 of the Loan Agreement, as of, and for the period ending on the
Compliance Date, and attached hereto as Schedule 2 are the monthly, quarterly
and annual (as applicable) Financial Statements required under Section 4.5 of
the Loan Agreement and the other reports, letters, opinions, notices and other
required under the Loan Agreement.
 
(h) The financial statements furnished in connection herewith have been prepared
in accordance with GAAP (except for the lack of footnotes required by GAAP and
changes resulting for normal year end adjustments, in the case of financial
statements other than those as of a fiscal year end), consistently applied from
one period to the next, and fairly present the financial condition of Borrower
and its consolidated Subsidiaries.
 
(i) There is no litigation, action, suit, investigation, or other arbitral,
administrative, or judicial proceeding pending or, to the best of the knowledge
of the undersigned, threatened which could reasonably be expected to (x) result
in a Material Adverse Effect or (y) restrain or enjoin, impose materially
burdensome conditions on, or otherwise materially and adversely affect the
ability of Borrower or any Guarantor to fulfill its obligations under the Loan
Documents; or (z) materially and adversely affect the rights and remedies of
Bank under the Loan Documents.
 
(j) No Liens have arisen, been granted or otherwise exist with respect to the
assets or properties of Borrower or any Guarantor, other than Permitted Liens.
 
(k) Borrower’s Material Domestic Subsidiaries as of the Compliance Date are:
___________________________________.
 

 

 
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THIS COMPLIANCE CERTIFICATE IS EXECUTED AND DELIVERED THIS ______ DAY OF
__________, 20__.
 
Very Truly Yours,
 

 
SUNPOWER CORPORATION
 
By:
 
Print Name:
 
Title:

 
 
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SCHEDULE 1
TO
COMPLIANCE CERTIFICATE

(a)  
Minimum Unrestricted Liquidity.

 
 
Required.  Under Section 4.6 of the Loan Agreement, on a consolidated basis,
shall maintain Eligible Assets with a value not less than two times (2x) the
Wells Fargo Exposure.

 
Actual.  On a consolidated basis, as of the last day of the month ended ______
__, 20__:
 
(1)           the amount of Eligible Assets
was:                                                                              
$____________
(2)           the Wells Fargo Exposure
was:                                                                                     $____________
(3)           two times the Wells Fargo
was:                                                                                     $____________
 
Complies:  Yes/ No
 
(b)  
Minimum Domestic Unrestricted Liquidity.

 
 
Required.  Under Section 4.6 of the Loan Agreement, on a consolidated basis,
shall maintain US Dollar denominated Eligible Assets domiciled in the United
States with a value not less than the Wells Fargo Exposure.

 
Actual.  On a consolidated basis, as of the last day of the month ended ______
__, 20__:
 
(1)           the amount of domestic Eligible Assets
was:                                                             $____________
(2)           the Wells Fargo Exposure
was:                                                                                     $____________
 
Complies:  Yes/ No
 
(c)  
Minimum Unrestricted Liquidity at Bank.

 
 
Required.  Under Section 4.7 of the Loan Agreement, on a consolidated basis,
shall at all times maintain US Dollar denominated Eligible Assets at Bank (in
specified deposit accounts) with a value not less than (a) $10 million plus the
Subject Period interest (during the first year of the Term Loan) and (b)
thereafter, the amount of principal and interest due during the Subject Period*.

 
Actual.  On a consolidated basis, as of the last day of the month ended ______
__, 20__:
 
(1)           the amount of Eligible Assets in
deposit accounts at Bank
was:                                                                                                $____________
(2)           [$10 million plus Subject Period interest]**
[Subject Period principal and interest]***
was:                                                                    $____________
 

 
*    Subject Period is the shorter of next 12 months and remaining term of Term
Loan.
**  Applies if Compliance Certificate is delivered prior to first anniversary of
Closing Date.
*** Applies if Compliance Certificate is delivered after first anniversary of
Closing Date.
 
Complies:  Yes/ No
 
 
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(d)  
Total Liabilities to Tangible Net Worth Ratio.

 

 
 
Required.  Under Section 4.8 of the Loan Agreement, the ratio of Total
Liabilities to Tangible Net Worth, on a consolidated basis, is not to be more
than 2.00 to 1.00.

 
Actual.  On a consolidated basis, as of the last day of the fiscal quarter ended
 
_____ __, 20__:
 
(1)  Calculation of Total Liabilities:
 
(a)           Total consolidated liabilities was:     $____________
 
(b)           less subordinated debt                      ($___________)
 
(c)           plus all undrawn letters of credit        $____________
 
(d)           Total
Liabilities                                                                     $____________
 
(2)   Calculation of Tangible Net Worth:
 
(a)           Total stockholders
equity                                                        $____________
 
(b)           plus subordinated debt                                           
 $____________
 
(c)           less intangible
assets                                               ($___________)
 
(d)        less loans/advances/investments per definition    ($___________)
 
(e)           Tangible Net
Worth                                                                         $____________
 
(3)           The ratio of (1)(d) to (2)(e)
was:                                                                                          ______
to 1.00
 
Complies:  Yes/ No
 

 

 
(e)  
Minimum Profitability- Rolling Four Quarters.

 

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower’s net income, on a
consolidated basis, for each period of four quarters shall,  , be not less than
$25 million.

 
Actual. On a consolidated basis, as of the last day of the fiscal quarter ended
__________ __, 20__:
 
 
Consolidated net income for current quarter ending _________$___________
 
Consolidated net income for quarter ending _________$___________
 
Consolidated net income for quarter ending _________$___________
 
Consolidated net income for quarter ending _________$_________
 
4 quarter net
income                                                                           $___________
 

 
Complies:  Yes/ No
 

 

 
 
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(f)  
Maximum Single Quarter Net Loss.

 

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower may not incur a net
loss, on a consolidated basis, for any one fiscal quarter that is greater than
$30 million.

 
Actual. On a consolidated basis, as of the last day of the fiscal quarter ended
__________ __, 20__, Borrower’s consolidated net income (loss) for such quarter
was $____________.
 

 
Complies:  Yes/ No
 

 

 
(g)  
Maximum Two Quarter Net Loss.

 

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower may not incur a net
loss, on a consolidated basis, for any period of two consecutive fiscal quarters
that is greater than $30 million.

 
Actual. On a consolidated basis:
 
(1)    Net Income (Loss) for quarter ended
_____________                                                                                                                     $___________
 
(2)    Net Income (Loss) for quarter ended
_____________                                                                                                                     $___________
 
(3)    Net Income (Loss) for those two consecutive fiscal quarters$___________
 

 

 
Complies:  Yes/ No
 
(h)  
Maximum Non-Guarantor Book Value.

 

 
 
Required.  Under Section 4.17 of the Loan Agreement, the book value of all
assets of Domestic Subsidiaries who are not Guarantors may not, at any time, be
more than 25% of the book value of Borrower’s consolidated assets.

 
Actual. As of the last day of the fiscal quarter ended __________ __, 20__:
 
(1)           Total book value of assets of non-Guarantor
Domestic Subsidiaries
was:                                                                           $____________
(2)           Total book value of Borrower’s
consolidated assets
was:                                                                          
   $____________
(3)           25% of (2)
was:                                                                                                $____________
 
Complies:  Yes/ No

 
 
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(i)  
Maximum Capital Expenditures.

 
 
Required.  Under Section 5.9 of the Loan Agreement, Borrower and its
Subsidiaries may not incur capital expenditures in excess of: $500 million
during 2009, $560 million during 2010 or $520 million during 2011.

 
Actual. On a consolidated basis, as of the last day of the fiscal quarter ended
__________ __, 20__, Borrower’s consolidated capital expenditures for the most
recently ended fiscal year were $____________.
 
Complies:  Yes/ No
 

 

 
Maximum Cash in Philippines Subsidiary.
 
Required.  Under Section 5.10 of the Loan Agreement, SPML’s cash, cash
equivalents and marketable securities may not exceed, in any fiscal month, an
aggregate average daily amount of $25 million.
 
Actual.  As of the last day of each of the fiscal months in the fiscal quarter
ended __________ __, 20__, the aggregate average daily value of SPML’s cash,
cash equivalents and marketable securities during such month was:
 
Month 1                      $______________
 
Month 2                      $______________
 
Month 3                      $______________
 
 
Complies:  Yes/ No
 

 

 
(j)  
Maximum Cash in Swiss Subsidiary

 
 
Required.  Under Section 5.10 of the Loan Agreement, SPSA’s cash, cash
equivalents and marketable securities may not exceed, in any fiscal month, an
aggregate average daily amount of $50 million.

 
Actual.  As of the last day of the fiscal month ended __________ __, 20__, the
aggregate average daily value of SPSA’s cash, cash equivalents and marketable
securities during such month was:
 
Month 1                      $______________
 
Month 2                      $______________
 
Month 3                      $______________
 

 
Complies:  Yes/ No

 
 
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EXHIBIT B

[FORM OF] MONTHLY COMPLIANCE CERTIFICATE
 
To:          Union Bank, N.A.
Commercial Loan Operations
601 East Potrero Grande Drive
Monterey Park, CA  91754
Facsimile: (323) 720-2252
 
with a copy to:
 
Union Bank, N.A.
Attention:  J. William Bloore
East Bay Corporate Banking Group
200 Pringle Avenue, Suite 500
Walnut Creek, CA  94596
 
Re:           Monthly Compliance Certificate as of and for period ending:
_______ __, 20__
 
Ladies and Gentlemen:
 

This certificate (this “Compliance Certificate”) is submitted pursuant to the
Loan Agreement, dated as of April 17, 2009 (as amended, modified, supplemented,
restated or renewed from time to time, the “Loan Agreement”) by and
between  SUNPOWER CORPORATION, a Delaware corporation (the “Borrower”) and UNION
BANK, N.A. (the “Bank”).  All capitalized terms used herein shall have the
meanings specified in the Loan Agreement unless otherwise defined herein.
 
The undersigned hereby certifies that: (a) [he][she] is the acting and incumbent
Chief Financial Officer of Borrower and Parent, and (b) in such capacity,
[he][she] is authorized to execute this Compliance Certificate on behalf of
Borrower in connection with the Loan Agreement.
 
The undersigned has reviewed the terms and conditions of the Loan Agreement and
the definitions and provisions contained in the Loan Agreement, and, has made,
or have caused to be made under the supervision of the undersigned, such
examination or investigation as is necessary to enable the undersigned to
express an informed opinion, and to provide a certification, as to the matters
referred to herein.
 
The undersigned hereby further represents, warrants and certifies that Borrower
is in compliance with each of the covenants in Section 4.6 of the Loan
Agreement, as of, and for the period ending, __________ __, 20__.  Attached are
true, correct and complete copies of all deposit account, securities account and
brokerage account statements demonstrating such compliance, if requested by
Bank.
 

 
 
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THIS COMPLIANCE CERTIFICATE IS EXECUTED AND DELIVERED THIS ______ DAY OF
__________, 20__.
 
Very Truly Yours,
 

 
SUNPOWER CORPORATION
 
By:
 
Print Name:
 
Title:

 
 
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EXHIBIT C

[FORM OF] CLOSING COMPLIANCE CERTIFICATE
 
To:          Union Bank, N.A.
Commercial Loan Operations
601 East Potrero Grande Drive
Monterey Park, CA  91754
Facsimile: (323) 720-2252
 
with a copy to:
 
Union Bank, N.A.
Attention:  J. William Bloore
East Bay Corporate Banking Group
200 Pringle Avenue, Suite 500
Walnut Creek, CA  94596
 
Re:           Compliance Certificate as of and for period ending: December 28,
2008
 
Ladies and Gentlemen:
 

This certificate (this “Compliance Certificate”) is submitted pursuant to the
Loan Agreement, dated as of April 17, 2009 (as amended, modified, supplemented,
restated or renewed from time to time, the “Loan Agreement”) by and between
SUNPOWER CORPORATION, a Delaware corporation (the “Borrower”) and UNION BANK,
N.A. (the “Bank”).  All capitalized terms used herein shall have the meanings
specified in the Loan Agreement unless otherwise defined herein.
 
The undersigned hereby certifies that: (a) [he][she] is the acting and incumbent
Chief Financial Officer of Borrower and Parent, and (b) in such capacity,
[he][she] is authorized to execute this Compliance Certificate on behalf of
Borrower in connection with the Loan Agreement.
 
The undersigned has reviewed the terms and conditions of the Loan Agreement and
the definitions and provisions contained in the Loan Agreement, and, has made,
or have caused to be made under the supervision of the undersigned, such
examination or investigation as is necessary to enable the undersigned to
express an informed opinion, and to provide a certification, as to the matters
referred to herein.
 
The undersigned hereby further represents, warrants and certifies that:
 
(a) Borrower is in complete and strict compliance, as of, and for the period
ending, December 28, 2008 (the “Compliance Date”), with each of the covenants in
Sections 4.6, 4.8, 4.9 and 4.17 of the Loan Agreement, as of, and for the period
ending on, the Compliance Date, and attached hereto as Schedule 1 is a true and
correct copy of the calculations of such financial covenants, prepared by the
undersigned.
 

 
 
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THIS COMPLIANCE CERTIFICATE IS EXECUTED AND DELIVERED THIS ______ DAY OF
__________, 20__.
 
Very Truly Yours,
 

 
SUNPOWER CORPORATION
 
By:
 
Print Name:
 
Title:

 

 

 
 
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SCHEDULE 1
TO
COMPLIANCE CERTIFICATE

 
Minimum Unrestricted Liquidity.

 

 
 
Required.  Under Section 4.6 of the Loan Agreement, on a consolidated basis,
shall maintain Eligible Assets with a value not less than two times (2x) the
Wells Fargo Exposure.

 
Actual.  On a consolidated basis, as of the last day of the month ended December
28, 2008:
 
(1)           the amount of Eligible Assets
was:                                                                           $____________
 
(2)           the Wells Fargo Exposure
was:                                                                                     $____________
 
(3)           two times the Wells Fargo
was:                                                                                     $____________
 

 
Complies:  Yes
 

 

 
 
Minimum Domestic Unrestricted Liquidity.

 

 
 
Required.  Under Section 4.6 of the Loan Agreement, on a consolidated basis,
shall maintain Eligible Assets domiciled in the United States with a value not
less than 100% of the Wells Fargo Exposure.

 
Actual.  On a consolidated basis, as of the last day of the month ended December
28, 2008:
 
(1)           the amount of domestic Eligible Assets
was:                                                                                     $____________
 
(2)           the Wells Fargo Exposure
was:                                                                                     $____________
 

 
Complies:  Yes
 

 

 
 
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Total Liabilities to Tangible Net Worth Ratio.

 
 
Required.  Under Section 4.8 of the Loan Agreement, the ratio of Total
Liabilities to Tangible Net Worth, on a consolidated basis, is not to be more
than 2.00 to 1.00.

 
Actual.  On a consolidated basis, as of the last day of the fiscal quarter ended
 
_____ __, 20__:
 
(1)  Calculation of Total Liabilities:
 
(a)           Total consolidated liabilities was:     $____________
(b)           less subordinated debt                      ($___________)
(c)           plus all undrawn letters of credit        $____________
(d)           Total
Liabilities                                                                          
 $____________
 
(2)   Calculation of Tangible Net Worth:
 
(a)           Total stockholders
equity                                                             $____________
(b)           plus subordinated
debt                                                 $____________
(c)           less intangible
assets                                                    ($___________)
(d)        less loans/advances/investments per definition         ($___________)
(e)           Tangible Net
Worth                                                                      $____________
 
(3)           The ratio of (1)(d) to (2)(e)
was:                                                                                       ______
to 1.00
 
Complies:  Yes
 

 

 
 
Minimum Profitability- Rolling Four Quarters.

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower’s net income, on a
consolidated basis, for each period of four quarters shall be not less than $25
million.

 
Actual. On a consolidated basis, as of the last day of the fiscal quarter ended
__________ __, 2009:
 
 
Consolidated net income for current quarter ending March __, 2008: $___________
 
Consolidated net income for quarter ending June __,
2008                                                                                                                     $___________
 
Consolidated net income for quarter ending September __, 2008 $___________
 
Consolidated net income for quarter ending December 28, 2008 $___________
 
4 quarter net
income                                                                                                $___________
 
Complies:  Yes
 
 
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Maximum Single Quarter Net Loss.

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower may not incur a net
loss, on a consolidated basis, for any one fiscal quarter that is greater than
$30 million.

 
Actual. On a consolidated basis, as of the last day of the fiscal quarter ended
December 28, 2008, Borrower’s consolidated net income (loss) for such quarter
was $____________.
 
Complies:  Yes
 

 

 
 
Maximum Two Quarter Net Loss.

 
 
Required.  Under Section 4.9 of the Loan Agreement, Borrower may not incur a net
loss, on a consolidated basis, for any period of two consecutive fiscal quarters
that is greater than $30 million.

 
Actual. On a consolidated basis:
 
(1)    Net Income (Loss) for quarter ended September __,
2008:                                                                                                                     $___________
(2)    Net Income (Loss) for quarter ended December __,
2008:                                                                                                                     $___________
(3)    Net Income (Loss) for those two consecutive fiscal
quarters                                                                                                               $___________
 
Complies:  Yes
 

 
 
Maximum Non-Guarantor Book Value.

 
 
Required.  Under Section 4.17 of the Loan Agreement, the book value of all
assets of Domestic Subsidiaries who are not Guarantors may not, at any time, be
more than 25% of the book value of Borrower’s consolidated assets.

 
Actual. As of the last day of the fiscal quarter ended December 28, 2008:
 
(1)           Total book value of assets of non-Guarantor
Domestic Subsidiaries
was:                                                                        $____________
(2)           Total book value of Borrower’s
consolidated assets
was:                                                                           $____________
(3)           25% of (2)
was:                                                                                          
  $____________
 
Complies:  Yes/ No

 
 
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Schedule 3.16(a) – Subsidiaries

1.  
SunPower North America, LLC, a Delaware limited liability company and wholly
owned subsidiary of SunPower Corporation;

2.  
Pluto Acquisition Company, LLC, a Delaware limited liability company in which
SunPower Corporation is the sole member;

3.  
SunPower Corporation, Systems, a Delaware corporation, formerly known as
PowerLight Corporation, and wholly owned subsidiary of Pluto Acquisition
Company, LLC;

4.  
Solar Star TO, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

5.  
Solar Star YC, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

6.  
Solar Star I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

7.  
Solar Star II, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

8.  
SunPower Technology Ltd., a Cayman Islands entity and wholly owned subsidiary of
SunPower Corporation;

9.  
SunPower Corporation (Switzerland) SARL, a Swiss entity and wholly owned
subsidiary of SunPower Technology, Ltd.;

10.  
SunPower Philippines Manufacturing Ltd., a Cayman Islands entity and wholly
owned subsidiary of SunPower Technology, Ltd.;

11.  
SunPower Systems SA, a Swiss entity and wholly owned subsidiary of SunPower
Corporation, Systems;

12.  
SunPower GmbH, a German entity and wholly owned subsidiary of SunPower Systems
SA;

13.  
SPWR Energias Renovaveis Unipessoal Limitada, a Portuguese entity and wholly
owned subsidiary of SunPower Systems SA;

14.  
SunPower Energy Systems Spain, S.L., a Spanish entity and wholly owned
subsidiary of SunPower Systems SA;

15.  
SunPower Development Company, a Delaware corporation and wholly owned subsidiary
of SunPower Corporation;

16.  
SunPower Bermuda Holdings, a Bermuda exempted general partnership in which
SunPower Corporation and SunPower Corporation, Systems are general partners;

17.  
SunPower Foundation, a California nonprofit corporation and wholly-owned
subsidiary of SunPower Corporation;

18.  
SunPower Philippines Ltd. – Regional Operating Headquarters (ROHQ), a Cayman
Islands multinational company and a wholly-owned subsidiary of SunPower
Technology Ltd.;

19.  
SunPower Malaysia Manufacturing Sdn Bhd, a Malaysian private company limited by
shares and a wholly-owned subsidiary of SunPower Technology Ltd.;

20.  
 SPML Land, Inc., a Philippines company and a wholly-owned subsidiary of
SunPower Philippines Manufacturing Ltd;

21.  
SunPower Energy Systems Korea, a company organized under the laws of Korea and a
wholly-owned subsidiary of SunPower Systems SA;

22.  
SunPower Italia Srl, a company organized under the laws of Italy and a
wholly-owned subsidiary of SunPower Systems SA;

 
1

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23.  
SunPower Corporation Australia Pty Ltd, an Australian proprietary company
limited by shares and a wholly-owned subsidiary of SunPower Systems SA;

24.  
SunPower France SAS, a company organized under the laws of France and a
wholly-owned subsidiary of SunPower Systems SA;

25.  
 SunPower Energy Systems Canada Corporation, an unlimited liability corporation
incorporated under the laws of Nova Scotia and a wholly-owned subsidiary of
SunPower Systems SA;

26.  
Helios Solar Star A-1 Company, an unlimited liability corporation incorporated
under the laws of Nova Scotia and a wholly-owned subsidiary of SunPower Energy
Systems Canada Corporation;

27.  
Helios Solar Star A-1, LP, a limited partnership organized under the laws of
Nova Scotia in which SunPower Energy Systems Canada Corporation and Helios Solar
Star A-1 Company are the only partners;

28.  
Greater Sandhill I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

29.  
High Plains Ranch I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

30.  
High Plains Ranch II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

31.  
Morgan Stanley SunPower Solar 2007 LLC, a Delaware limited liability company in
which MS Solar I, LLC (95%) and SunPower Corporation, Systems (5%) are the only
members;

32.  
MS Solar Star I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

33.  
Parrey, LLC, a Delaware limited liability company in which SunPower Corporation,
Systems is the sole member;

34.  
Solar Star Arizona I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

35.  
Solar Star BBY CA I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

36.  
Solar Star BBY HI I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

37.  
Solar Star BBY NJ I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

38.  
Solar Star California I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

39.  
Solar Star California IV, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

40.  
Solar Star California VII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

41.  
Solar Star California VIII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

42.  
Solar Star California XI, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

43.  
Solar Star California XII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

 
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44.  
Solar Star California XIII, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

45.  
Solar Star California XIV, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

46.  
Solar Star California XV, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

47.  
Solar Star Connecticut I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

48.  
Solar Star Estancia I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

49.  
Solar Star Hawaii I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

50.  
Solar Star Hawaii II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

51.  
Solar Star Hawaii III, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

52.  
Solar Star HI Air, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

53.  
Solar Star Koyo I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

54.  
Solar Star Mervyns I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

55.  
Solar Star MWHI I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

56.  
Solar Star New Jersey II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

57.  
Solar Star New Jersey III, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

58.  
Solar Star New Jersey IV, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

59.  
Solar Star New Jersey V, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

60.  
Solar Star New Jersey VI, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

61.  
Solar Star North Carolina I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

62.  
Solar Star Ohio I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

63.  
Solar Star Rancho CWD I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

64.  
SPWR Galaxy Holdco 2007 LLC, a Delaware limited liability company in which EFS
Solar Star Holdings LLC (99%) and SunPower Corporation, Systems (1%) are the
only members;

65.  
Solar Star TJX I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

66.  
SSSA, LLC, a Delaware limited liability company in which SunPower Corporation,
Systems is the sole member;

 
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67.  
SunPower Solar Singapore Pte Ltd., a private company organized under the laws of
the Republic of Singapore and a wholly owned subsidiary of SunPower Systems SA*;
and

68.  
Helios Solar Star A-2 Company, an unlimited liability corporation incorporated
under the laws of Nova Scotia and a wholly owned subsidiary of SunPower Energy
Systems Canada Corporation.

* Borrower anticipates that the completion of transfer of ownership to the
relevant subsidiary of Borrower will be completed the week of April 20, 2009.

 
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Schedule 3.16(b) – Special Purpose Entities

1.  
Solar Star TO, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

2.  
Solar Star YC, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

3.  
Solar Star I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

4.  
Solar Star II, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

5.  
Greater Sandhill I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

6.  
Helios Solar Star A-1 Company, an unlimited liability corporation incorporated
under the laws of Nova Scotia and a wholly-owned subsidiary of SunPower Energy
Systems Canada Corporation;

7.  
Helios Solar Star A-1, LP, a limited partnership organized under the laws of
Nova Scotia in which SunPower Energy Systems Canada Corporation and Helios Solar
Star A-1 Company are the only partners;

8.  
Helios Solar Star A-2 Company, an unlimited liability corporation incorporated
under the laws of Nova Scotia and a wholly owned subsidiary of SunPower Energy
Systems Canada Corporation;

9.  
High Plains Ranch I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

10.  
High Plains Ranch II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

11.  
Morgan Stanley SunPower Solar 2007 LLC, a Delaware limited liability company in
which MS Solar I, LLC (95%) and SunPower Corporation, Systems (5%) are the only
members;

12.  
MS Solar Star I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

13.  
Parrey, LLC, a Delaware limited liability company in which SunPower Corporation,
Systems is the sole member;

14.  
Solar Star Arizona I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

15.  
Solar Star BBY CA I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

16.  
Solar Star BBY HI I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

17.  
Solar Star BBY NJ I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

18.  
Solar Star California I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

19.  
Solar Star California IV, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

 
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20.  
Solar Star California VII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

21.  
Solar Star California VIII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

22.  
Solar Star California XI, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

23.  
Solar Star California XII, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

24.  
Solar Star California XIII, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

25.  
Solar Star California XIV, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

26.  
Solar Star California XV, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

27.  
Solar Star Connecticut I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

28.  
Solar Star Estancia I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

29.  
Solar Star Hawaii I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

30.  
Solar Star Hawaii II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

31.  
Solar Star Hawaii III, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

32.  
Solar Star HI Air, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

33.  
Solar Star Koyo I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

34.  
Solar Star Mervyns I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

35.  
Solar Star MWHI I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

36.  
Solar Star New Jersey II, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

37.  
Solar Star New Jersey III, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

38.  
Solar Star New Jersey IV, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

39.  
Solar Star New Jersey V, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

40.  
Solar Star New Jersey VI, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

41.  
Solar Star North Carolina I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

42.  
Solar Star Ohio I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member;

 
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43.  
Solar Star Rancho CWD I, LLC, a Delaware limited liability company in which
SunPower Corporation, Systems is the sole member;

44.  
SPWR Galaxy Holdco 2007 LLC, a Delaware limited liability company in which EFS
Solar Star Holdings LLC (99%) and SunPower Corporation, Systems (1%) are the
only members;

45.  
Solar Star TJX I, LLC, a Delaware limited liability company in which SunPower
Corporation, Systems is the sole member; and

46.  
SSSA, LLC, a Delaware limited liability company in which SunPower Corporation,
Systems is the sole member.