Exhibit 10.2

 

CONFIDENTIAL TREATMENT REQUESTED

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CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN
SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION

 

SECURITY AGREEMENT:

(DEPOSIT ACCOUNT)

 

1.             GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned SUNPOWER CORPORATION (“Debtor”), hereby grants and transfers to
WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) a security interest in Debtor’s
deposit account # *** maintained at Bank (the “Collateral”) and all renewals
thereof, together with all proceeds thereof (hereinafter called “Proceeds”).

 

2.             OBLIGATIONS SECURED. The obligations secured hereby are the
payment and performance of: (a) all present and future Indebtedness of Debtor to
Bank arising under or in connection with a Letter of Credit Line and all Letters
of Credit issued thereunder, as such terms are defined in a Credit Agreement
dated as of July 13, 2007 between Bank and Debtor (as amended, extended or
renewed – the “Credit Agreement); and (b) all obligations of Debtor and rights
of Bank under this Agreement. The word “Indebtedness” is used herein in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of Debtor, or any of them, heretofore, now or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether Debtor may be liable individually or
jointly with others, or whether recovery upon such Indebtedness may be or
hereafter becomes unenforceable.

 

3.             TERMINATION. This Agreement will terminate upon the performance
of all obligations of Debtor to Bank, including without limitation, the payment
of all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.

 

4.             REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Bank that:  (a) Debtor’s legal name is exactly as set forth on the first page of
this Agreement, and all of Debtor’s organizational documents or agreements
delivered to Bank are complete and accurate in every respect; (b) Debtor is the
owner and has possession or control of the Collateral and Proceeds; (c) Debtor
has the exclusive right to grant a security interest in the Collateral and
Proceeds; (d) all Collateral and Proceeds are genuine, free from liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent of any
kind or character, except the lien created hereby or as otherwise agreed to by
Bank, or as heretofore disclosed by Debtor to Bank, in writing; (e) all
statements contained herein and, where applicable, in the Collateral are true
and complete in all material respects; and (f) no financing statement covering
any of the Collateral or Proceeds, and naming any secured party other than Bank,
is on file in any public office.

 

5.             COVENANTS OF DEBTOR.

 

(a)           Debtor agrees in general: (i) to indemnify Bank against all
losses, claims, demands, liabilities and expenses of every kind caused by
property subject hereto; (ii) to pay all costs and expenses, including
reasonable attorneys’ fees, incurred by Bank in the perfection and preservation
of the Collateral or Bank’s interest therein and/or the realization, enforcement
and exercise of Bank’s rights, powers and remedies hereunder; (iii) to permit
Bank to exercise its powers hereunder; (iv) to execute and deliver such
documents as Bank deems necessary to create, perfect and continue the security
interests contemplated hereby; and (v) to cooperate

 

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with Bank in perfecting all security interests granted herein and in obtaining
such agreements from third parties as Bank deems necessary, proper or convenient
in connection with the preservation, perfection or enforcement of any of its
rights hereunder.

 

(b)           Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) that Bank is authorized to file financing
statements in the name of Debtor to perfect Bank’s security interest in
Collateral and Proceeds; (ii) not to permit any lien on the Collateral or
Proceeds, except in favor of Bank; (iii) not to withdraw any funds constituting
Collateral if following any such withdrawal the principal amount of Collateral
would be less than the Required Amount; and (iv) to provide any service and do
any other acts which may be necessary to keep all Collateral and Proceeds free
and clear of all defenses, rights of offset and counterclaims. “Required Amount”
means the amount available to be drawn under outstanding Letters of Credit plus
the amount drawn and not yet reimbursed under Letters of Credit.

 

6.             POWERS OF BANK. Debtor appoints Bank its true attorney in fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank’s officers and employees, or any of them, whether or not Debtor
is in default: (a) to perform any obligation of Debtor hereunder in Debtor’s
name or otherwise following Debtor’s failure to do so; (b) to exercise all
rights, powers and remedies which Debtor would have, but for this Agreement,
with respect to all Collateral and Proceeds subject hereto; and (c) to do all
acts and things and execute all documents in the name of Debtor or otherwise,
deemed by Bank as necessary, proper and convenient in connection with the
preservation, perfection or, after default, enforcement of its rights hereunder.

 

7.             EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an “Event of Default” under this Agreement: (a) any defined event of
default, under the Credit Agreement, as defined above; (b) any representation or
warranty made by Debtor herein shall prove to be incorrect, false or misleading
in any material respect when made; (c) Debtor shall fail to observe or perform
any obligation or agreement contained herein; or (d) any impairment of the
rights of Bank in any Collateral or Proceeds, or any attachment or like levy on
any Collateral or Proceeds.

 

8.             REMEDIES. Upon the occurrence of any Event of Default, Bank shall
have the right to declare immediately due and payable all or any Indebtedness
secured hereby and to terminate any commitments to make loans or otherwise
extend credit to Debtor. Bank shall have all other rights, powers, privileges
and remedies granted to a secured party upon default under the California
Uniform Commercial Code or otherwise provided by law, including without
limitation, the right to contact all persons obligated to Debtor on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral
and/or Proceeds directly to Bank. All rights, powers, privileges and remedies of
Bank shall be cumulative. No delay, failure or discontinuance of Bank in
exercising any right, power, privilege or remedy hereunder shall affect or
operate as a waiver of such right, power, privilege or remedy; nor shall any
single or partial exercise of any such right, power, privilege or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Any waiver, permit,
consent or approval of any kind by Bank of any default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in writing. While an Event of Default
exists, Bank may, at any time and at Bank’s sole option, liquidate any time
deposits pledged to Bank hereunder and apply the Proceeds thereof to payment of
the Indebtedness, whether or not said time deposits have

 

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matured and notwithstanding the fact that such liquidation may give rise to
penalties for early withdrawal of funds.

 

9.             DISPOSITION OF COLLATERAL. Any proceeds of any disposition of any
Collateral or Proceeds, or any part thereof, may be applied by Bank to the
payment of expenses incurred by Bank in connection with the foregoing, including
reasonable attorneys’ fees, and the balance of such proceeds may be applied by
Bank toward the payment of the Indebtedness in such order of application as Bank
may from time to time elect.

 

10.          STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid
in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale or other disposition and all other rights, powers,
privileges and remedies granted to Bank hereunder shall continue to exist and
may be exercised by Bank at any time and from time to time irrespective of the
fact that the Indebtedness or any part thereof may have become barred by any
statute of limitations, or that the personal liability of Debtor may have
ceased, unless such liability shall have ceased due to the payment in full of
all Indebtedness secured hereunder.

 

11.          NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or principal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or three (3) days after deposit in the U.S.
mail, first class and postage prepaid; and (c) if sent by telecopy, upon
receipt.

 

12.          COSTS, EXPENSES AND ATTORNEYS’ FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of Bank’s in-house counsel), expended or
incurred by Bank in exercising any right, power, privilege or remedy conferred
by this Agreement or in the enforcement thereof, whether incurred at the trial
or appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to Debtor or in any way
affecting any of the Collateral or Bank’s ability to exercise any of its rights
or remedies with respect thereto. All of the foregoing shall be paid by Debtor
with interest from the date of demand until paid in full at a rate per annum
equal to the greater of ten percent (10%) or Bank’s Prime Rate in effect from
time to time.

 

13.          SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.

 

14.          SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.

 

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15.          GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

 

Debtor warrants that Debtor is an organization existing under the laws of the
State of Delaware.

 

Debtor warrants that its chief executive office is located at the following
address:  3939 N. First Street, San Jose, CA  95134.

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of July 13, 2007.

 

SUNPOWER CORPORATION

 

 

 

By:

/s/ EMMANUEL T. HERNANDEZ

 

 

 

Emmanuel T. Hernandez

 

 

 

Chief Financial Officer

 

 

 

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FILED WITH THE SECURITIES AND EXCHANGE COMMISSION

 

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