Exhibit 10.1

 

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

 

 

CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of July 13, 2007, by
and between SUNPOWER CORPORATION, a Delaware corporation (“Borrower”), and WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

Borrower has requested that Bank extend or continue credit to Borrower as
described below, and Bank has agreed to provide such credit to Borrower on the
terms and conditions contained herein.

 

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

 

ARTICLE I

CREDIT TERMS

 

SECTION 1.1.         LINE OF CREDIT.

 

(a)    Line of Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including July 31, 2008, not to exceed at any time the aggregate principal
amount of Fifty Million Dollars ($50,000,000.00) (“Line of Credit”), the
proceeds of which shall be used for working capital and other corporate
requirements. Borrower’s obligation to repay advances under the Line of Credit
shall be evidenced by a promissory note dated as of July 13, 2007 (“Line of
Credit Note”), all terms of which are incorporated herein by this reference.

 

(b)    Borrowing and Repayment. Borrower may from time to time during the term
of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

 

SECTION 1.2.         LETTER OF CREDIT LINE.

 

(a)    Letter of Credit Line. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to establish a letter of credit line (“Letter of
Credit Line”) under which Bank shall issue or cause an affiliate to issue
commercial and standby letters of credit for the account of Borrower to finance
working capital and other corporate requirements (each, a “Letter of Credit” and
collectively, “Letters of Credit”) from time to time up to and including July
31, 2010; provided however, that the aggregate of all undrawn amounts, and all
amounts drawn and unreimbursed, under any Letters of Credit issued under the
Letter of Credit Line shall not at any time exceed the principal amount of
Fifteen Million Dollars ($15,000,000.00). The form and substance of each Letter
of Credit shall be subject to approval by Bank, in its sole discretion. Each
Letter of Credit shall be issued for an initial term not to exceed 365 days, as
designated by Borrower; provided however, that no Letter of Credit shall have a
final expiration date subsequent to July 31, 2010. Each Letter of Credit shall
be subject to the additional terms of the Commercial and Standby Letter of
Credit Agreements, as applicable, to be dated as of the date of their respective
execution, applications thereunder, and any related documents required by Bank
in connection with the issuance thereof (each, a “Letter of Credit Agreement”).

 

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(b)    Repayment of Drafts. Each drawing paid under any Letter of Credit shall
be repaid by Borrower in accordance with the provisions of the applicable Letter
of Credit Agreement.

 

SECTION 1.3.         INTEREST/FEES.

 

(a)    Interest.           The outstanding principal balance of each credit
subject hereto shall bear interest, and the amount of each drawing paid under
anyLetter of Credit shall bear interest from the date such drawing is paid to
the date such amount is fully repaid by Borrower, at the rate of interest set
forth in each promissory note or other instrument or document executed in
connection therewith.

 

(b)    Computation and Payment. Interest shall be computed on the basis of a
360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

 

(c)     Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to fifteen-hundredths percent (0.15%)
per annum (computed on the basis of a 360-day year, actual days elapsed) of the
face amount thereof, and (ii) fees upon the payment or negotiation of each
drawing under any Letter of Credit and fees upon the occurrence of any other
activity with respect to any Letter of Credit (including without limitation, the
transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank’s standard fees and charges then in effect for such
activity. The standard fees and charges in effect as of the date hereof are set
forth in Schedule 1.3 hereto.

 

SECTION 1.4.         COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all interest and fees due under each credit subject hereto by charging
Borrower’s deposit account number #*** with Bank of America for the full amount
thereof. Should there be insufficient funds in any such deposit account to pay
all such sums when due, the full amount of such deficiency shall be immediately
due and payable by Borrower.

 

SECTION 1.5.         COLLATERAL.

 

As security for all indebtedness of Borrower to Bank in connection with Letters
of Credit issued (or deemed issued) under the Letter of Credit Line, Borrower
shall grant to Bank security interests in Debtor’s deposit account #***
maintained at Bank and all renewals thereof, together with all proceeds thereof.

 

All of the foregoing shall be evidenced by and subject to the terms of a
security agreement dated as of the date hereof. Borrower shall pay to Bank
immediately upon demand the full amount of all charges, costs and expenses (to
include fees paid to third parties and all allocated costs of Bank personnel),
expended or incurred by Bank in connection with any of the foregoing security.

 

SECTION 1.6.         GUARANTIES. The payment and performance of all indebtedness
and other obligations of Borrower to Bank under this Agreement shall be jointly
and severally guaranteed by SunPower Corporation, Systems (formerly known as
PowerLight Corporation), a Delaware corporation, and SunPower North America,
Inc., a Delaware corporation in the principal amount of Fifty Million Dollars
($50,000,000.00) each, as evidenced by and subject to the terms of a guaranty in
form and substance satisfactory to Bank. Borrower shall cause each
newly-acquired or newly-formed Domestic Material Subsidiary (as defined in
Section 2.12) to

 

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execute a joinder to said guaranty within 30 days after its qualifying as a
Domestic Material Subsidiary. Each Subsidiary which executes or is required to
execute such guaranty or a joinder thereto shall be referred to as a “Third
Party Obligor.”

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Borrower makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject to
this Agreement.

 

SECTION 2.1.         LEGAL STATUS. Borrower and each Third Party Obligor is a
corporation, duly organized and existing and in good standing under the laws of
its formation, and is qualified or licensed to do business (and is in good
standing as a foreign corporation, if applicable) in all jurisdictions in which
such qualification or licensing is required or in which the failure to so
qualify or to be so licensed could not reasonably be expected to have a material
adverse effect on Borrower’s consolidated financial condition or operations or
on the prospects of Borrower’s performance of its obligations under this
Agreement and the other Loan Documents (a “Material Adverse Effect”).

 

SECTION 2.2.         AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
“Loan Documents”) have 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, enforceable in accordance with their respective terms.

 

SECTION 2.3.         NO VIOLATION. The execution, delivery and performance by
Borrower and each Third Party Obligor of each of the Loan Documents do not
violate any provision of any law or regulation, or contravene any provision of
the Articles of Incorporation or Bylaws of such entity, or result in any breach
of or default under any contract, obligation, indenture or other instrument to
which such entity is a party or by which such entity may be bound.

 

SECTION 2.4.         LITIGATION. There are no pending, or to the best of
Borrower’s knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could reasonably be expected to have a Material
Adverse Effect other than those disclosed by Borrower to Bank in writing prior
to the date hereof.

 

SECTION 2.5.         CORRECTNESS OF FINANCIAL STATEMENT. The annual financial
statement of Borrower dated December 31, 2006, and all interim financial
statements delivered to Bank since said date, true copies of which have been
delivered by Borrower to Bank prior to the date hereof, (a) are complete and
correct and present fairly the consolidated financial condition of Borrower, (b)
disclose all consolidated liabilities of Borrower that are required to be
reflected or reserved against under generally accepted accounting principles,
whether liquidated or unliquidated, fixed or contingent, and (c) have been
prepared in accordance with generally accepted accounting principles
consistently applied (“GAAP”). Since the dates of such financial statements
there has been no material adverse change in the consolidated financial
condition of Borrower, nor has Borrower mortgaged, pledged, granted a security
interest in or otherwise

 

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encumbered any of its assets or properties except Permitted Liens and security
interests and liens in favor of Bank. “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 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); (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 mater 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 is 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 of its Subsidiaries, in each case granted or
existing in the ordinary course of business in favor of the bank or banks with
which such accounts are maintained, securing amounts owing to such bank; (xv)
liens that arise by operation of law; (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; and (xx) other liens so long as the aggregate outstanding
principal amount of the obligations secured thereby does not exceed (as to the
Borrower and all Subsidiaries on a consolidated basis) Five Million Dollars
($5,000,000.00) at any one time.

 

SECTION 2.6.         INCOME TAX RETURNS. Neither Borrower nor any Third Party
Obligor  has any knowledge of any pending assessments or adjustments of its
income tax payable with respect to any year which could reasonably be expected
to have a Material Adverse Effect.

 

SECTION 2.7.         NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower or a Third Party Obligor is a party or
by which Borrower or a Third Party Obligor may be bound that requires the
subordination in right of payment of any of Borrower’s or such Third Party
Obligor obligations subject to this Agreement to any other obligation of
Borrower.

 

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SECTION 2.8.         PERMITS, FRANCHISES. Borrower and each Third Party Obligor
possesses, and will 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.

 

SECTION 2.9.         ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time (“ERISA”); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

 

SECTION 2.10.      OTHER OBLIGATIONS. Neither Borrower nor any Third Party
Obligor  is in default on any obligation for borrowed money or any material
purchase money obligation, lease, commitment, contract, instrument or obligation
that could reasonably be expected to result in a Material Adverse Effect.

 

SECTION 2.11.      ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower and each or a Third Party
Obligor 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 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 or a Third Party Obligor 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 Third Party Obligor has any material contingent liability in connection with
any release of any toxic or hazardous waste or substance into the environment.

 

SECTION 2.12.      SUBSIDIARIES. As of the date hereof, the entities named in
Schedule 2.12(a) hereto are the only entities in which Borrower, directly or
indirectly, owns a controlling or majority interest, with the Borrower’s direct
or indirect percentage ownership interest and the state or country of formation
set forth in said Schedule. Each entity (whether now existing or hereafter
formed or acquired) in which Borrower, directly or indirectly, owns a
controlling or majority interest, is referred to as a “Subsidiary.”  The term
“Material Subsidiary” means any Subsidiary whose assets have a book value which
exceed 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). The term “Domestic” as applied to a Subsidiary
means that such Subsidiary is incorporated or organized under the laws of the
United States or of any state thereof. In no event shall any Special Purpose
Entity be considered a Material Subsidiary for any purpose under this Agreement.
For purposes of this Section 2.12, “Special Purpose Entity” shall mean an entity
formed in connection with a specific

 

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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. Schedule 2.12(b) lists the Special Purpose Entities existing as of
the date hereof. Borrower shall notify Bank of the formation, acquisition,
dissolution or disposition of any Subsidiary, including Special Purpose
Entities, with 30 days of such formation, acquisition, dissolution or
disposition.

 

ARTICLE III

CONDITIONS

 

SECTION 3.1.         CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation
of Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank’s satisfaction of all of the following conditions:

 

(a)    Approval of Bank Counsel. All legal matters incidental to the extension
of credit by Bank shall be satisfactory to Bank’s counsel.

 

(b)    Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

 

(i)                                     This Agreement and each promissory note
or other instrument or document required hereby.

(ii)                                  Corporate Resolution: Borrowing.

(iii)                               Corporate Resolution: Continuing Guaranty
(2).

(iv)                              Continuing Guaranty.

(v)                                 Joinder to Continuing Guaranty (2).

(vi)                              Certificate of Incumbency (3).

(vii)                           Disbursement Order.

(viii)                        Security Agreement:  Deposit Agreement.

(ix)                              Commercial Money Market Account Agreement.

(x)                                 Evidence of termination of the security
interests held by Union Bank of California and Credit Suisse First Boston.

(xi)                              Such other documents as Bank may require under
any other Section of this Agreement.

 

(c)     Financial Condition. There shall have been no material adverse change,
as determined by Bank, in the financial condition or business of Borrower or any
guarantor hereunder, nor any material decline, as 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.

 

SECTION 3.2.         CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank’s satisfaction of each of the following
conditions:

 

(a)    Compliance. The representations and warranties contained herein and in
each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which

 

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with the giving of notice or the passage of time or both would constitute such
an Event of Default, shall have occurred and be continuing or shall exist.

 

(b)    Documentation. Bank shall have received all additional documents which
may be required in connection with such extension of credit.

 

ARTICLE IV

AFFIRMATIVE COVENANTS

 

Borrower covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower shall, and (with respect to Sections 4.2, 4.4, 4.5, 4.6
and 4.7) shall cause each Third Party Obligor to, unless Bank otherwise consents
in writing:

 

SECTION 4.1.         PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.

 

SECTION 4.2.         ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, after reasonable notice (except during
the existence of an Event of Default) and during regular business hours, to
inspect, audit and examine such books and records, to make copies of the same,
and to inspect the properties of Borrower or such Third Party Obligor. Bank’s
use of confidential information of Borrower shall be governed by that certain
Confidentiality Agreement (the “Confidentiality Agreement”), dated June 19,
2007, by and between Bank and Borrower.

 

SECTION 4.3.         FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail satisfactory to Bank:

 

(a)    not later than 120 days after and as of the end of each fiscal year,
Borrower’s audited annual financial statements, prepared by a certified public
accountant acceptable to Bank, to include balance sheet, income statement,
statement of cash flow and footnotes, which may be in the form of Borrower’s
annual report on Form 10K filed with the Securities Exchange Commission (“SEC”);
such report shall be deemed delivered to Bank upon filing with the SEC;

 

(b)    not later than 45 days after and as of the end of each fiscal quarter,
Borrower’s quarterly financial statements, prepared by Borrower, to include
balance sheet, income statement and statement of cash flow, which may be in the
form of Borrower’s quarterly report on From 10Q filed with the SEC; such report
shall be deemed delivered to Bank upon filing with the SEC.

 

(c)     not later than 10 days after and as of the end of each month, bank
and/or brokerage statements reflecting compliance with the Liquidity covenant
set forth in Section 4.9(a) below;

 

(d)    contemporaneously with each annual and fiscal quarter end financial
statement of Borrower required hereby, a certificate of the chief executive
officer or chief financial officer of Borrower that said financial statements
are accurate and that there exists no Event of Default

 

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nor any condition, act or event which with the giving of notice or the passage
of time or both would constitute an Event of Default, and with supporting
calculations showing compliance with financial covenants; and

 

(e)     from time to time such other information as Bank may reasonably request.

 

SECTION 4.4.         COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; comply with the provisions of all documents pursuant to
which Borrower or such Third Party Obligor is organized and/or which govern
Borrower’s or such Third Party Obligor continued existence and with the
requirements of all laws, rules, regulations and orders of any governmental
authority applicable to Borrower, such Third Party Obligor  and/or its business,
except to the extent that non-compliance could not reasonably be expected to
have a Material Adverse Effect

 

SECTION 4.5.         INSURANCE. Maintain and keep in force, for each business in
which Borrower or such Third Party Obligor is engaged, insurance of the types
and in amounts customarily carried in similar lines of business, including but
not limited to fire, extended coverage, public liability, flood, property damage
and workers’ compensation, and deliver to Bank from time to time at Bank’s
request schedules setting forth all insurance then in effect.

 

SECTION 4.6.         FACILITIES. Keep all properties useful or necessary to
Borrower’s or such Third Party Obligor’s business in good repair and condition,
and from time to time make necessary repairs, renewals and replacements thereto
so that such properties shall be fully and efficiently preserved and maintained,
except to the extent that non-compliance could not reasonably be expected to
have a Material Adverse Effect.

 

SECTION 4.7.         TAXES AND OTHER LIABILITIES. 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 Third Party
Obligor may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Borrower has made provision, to Bank’s satisfaction, for
eventual payment thereof in the event Borrower or such Third Party Obligor is
obligated to make such payment.

 

SECTION 4.8.         LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower or any Subsidiary which is
required to be disclosed to the SEC or which could reasonably be expected to
have a Material Adverse Effect.

 

SECTION 4.9.         FINANCIAL CONDITION. Maintain Borrower’s consolidated
financial condition as follows, using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein), with compliance determined
commencing with Borrower’s financial statements for the period ending September
30, 2007:

 

(a)    Minimum Liquidity (defined as unencumbered and unrestricted cash, cash
equivalents, and marketable securities acceptable to Bank, which, if cash, is
U.S. Dollar denominated, and, if other than cash, consist of financial
instruments or securities, acceptable to Bank, maintained in United States
domiciled accounts) equal to or greater than one and one half (1.50) times the
outstanding principal balance of the Line of Credit, determined as of the end of
each calendar month.

 

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(b)    Total Liabilities divided by Tangible Net Worth not greater than 1.50 to
1.0, determined as of the end of each fiscal quarter, with “Total Liabilities”
defined as the aggregate of current liabilities and non-current liabilities less
subordinated debt, and with “Tangible Net Worth” defined as the aggregate of
total stockholders’ equity plus subordinated debt less any intangible assets and
less any loans or advances to, or investments in, any related entities or
individuals. Without limitation of the foregoing, Total Liabilities shall
include the amount available to be drawn under all outstanding letters of credit
(including Letters of Credit) issued for the account of Borrower and/or any
Subsidiary.

 

(c)     Net Income after taxes not less than $1.00 in each period of four
consecutive fiscal quarters, determined as of each fiscal quarter end on a
rolling 4-quarter basis, and with “Net Income” defined as net income on a GAAP
basis plus amortization of intangibles and in-process research and development
related to the acquisition of PowerLight Corporation, a California corporation,
by Borrower on January 10, 2007.

 

SECTION 4.10.      NOTICE TO BANK. Promptly (but in no event more than ten (10)
business days after an officer Borrower first has knowledge of the occurrence of
each such event or matter) give written notice to Bank in reasonable detail of: 
(a) the occurrence of any Event of Default, or any condition, event or act which
with the giving of notice or the passage of time or both would constitute an
Event of Default; (b) any change in the name or the organizational structure of
Borrower or any Third Party Obligor; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower or any Third Party Obligor
is required to maintain, or any uninsured or partially uninsured loss through
liability or property damage, or through fire, theft or any other cause
affecting Borrower’s property which could reasonably be expected to have a
Material Adverse Effect.

 

SECTION 4.11.      DOMESTIC SUBSIDIARY ASSET LIMIT. Ensure that Domestic
Subsidiaries which are not Third Party Obligors represent no more than 25% of
Borrower’s consolidated assets.

 

ARTICLE V

NEGATIVE COVENANTS

 

Borrower further covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not (and, as applicable, will not
cause or permit any Third Party Obligor, and as to Section 5.11, SunPower
Philippines Manufacturing, Ltd. to) without Bank’s prior written consent:

 

SECTION 5.1.         USE OF FUNDS. Use any of the proceeds of any credit
extended hereunder except for the purposes stated in Article I hereof.

 

SECTION 5.2.         CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in fiscal year ending 2007 in excess of an aggregate of Two Hundred
Twenty Million Dollars ($220,000,000.00) on a consolidated basis.

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
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SECTION 5.3.         OTHER INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower or such
Third Party Obligor to Bank, and (b) Permitted Indebtedness. “Permitted
Indebtedness” shall mean (i) indebtedness of Borrower or a Third Party Obligor
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 its Subsidiaries in connection with supply and
purchase agreements in an aggregate principal amount not to exceed Two Hundred
Million Dollars ($200,000,000.00) at any one time and any refinancings,
refundings, renewals or extensions thereof (without shortening the maturity
thereof or increasing the principal amount thereof); (iv) 1.25% senior
convertible debentures issued in February 2007 in the aggregate principal amount
of Two Hundred Million Dollars ($200,000,000.00) plus accrued interest thereon;
(v) unsecured contingent liabilities in favor of Union Bank of California in
connection with 3 outstanding letters of credit issued by Union Bank of
California, (vi) obligations owed to Travelers Casualty and Surety Company of
America and St. Paul Fire and Marine Insurance Company, and their affiliates
(collectively, “Travelers”) in connection with obligations under the General
Contract of Indemnity with Travelers, pursuant to which Travelers issues bonds
or otherwise secures performance of Borrower and Subsidiaries for the benefit of
their customers and contract counterparties; (vii) additional convertible
debentures in the maximum aggregate principal amount of Two Hundred Fifty
Million Dollars ($250,000,000.00) with an interest not to exceed 2.00% per
annum, and with a maturity date no earlier than January 1, 2013; and (viii)
additional indebtedness of Borrower and Third Party Obligors in an aggregate
principal amount not to exceed Fifteen Million Dollars ($15,000,000.00)
outstanding at any one time.

 

SECTION 5.4.         GUARANTIES. Guarantee or 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, nor pledge or hypothecate any assets of Borrower or such Third
Party Obligor as security for, any liabilities or obligations of any person or
entity, other than (i) in the ordinary course of business, Borrower, any Third
Party Obligor or any other Subsidiary, with the principal amount of such
non-Third Party Obligor Subsidiaries’ obligations subject hereto not to exceed
an aggregate of Fifty Million Dollars ($50,000,000.00) outstanding at any time,
(ii) Bank, (iii) Travelers Casualty and Surety Company of America and St. Paul
Fire and Marine Insurance Company (together with their affiliates, collectively,
“Travelers”) in connection with obligations under the General Contract of
Indemnity with Travelers, pursuant to which Travelers issues bonds or otherwise
secures performance of Borrower and Subsidiaries for the benefit of their
customers and contract counterparties, and (iv) guarantees and liabilities that
constitute Permitted Indebtedness.

 

SECTION 5.5.         LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to
or investments in any person or entity, except (a) any of the foregoing existing
as of, and disclosed to Bank prior to, the date hereof, (b) additional loans or
advances by Borrower or such Third Party Obligor to employees and officers in
the ordinary course of business and in amounts not to exceed an aggregate of
Five Million Dollars ($5,000,000.00) 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, as defined in Section 5.8, below, (e) any of the
foregoing that constitute Permitted Indebtedness, (f) advances to, or
investments in, a Subsidiary or in Woongjin Energy by Borrower or any Third
Party Obligor in the ordinary course of business; (g) prepayment of

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION

 

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obligations to vendors and suppliers in the ordinary course in an amount not to
exceed Two Hundred Million Dollars ($200,000,000.00).

 

SECTION 5.6.         DIVIDENDS, DISTRIBUTIONS. 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 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.

 

SECTION 5.7.         PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of Borrower’s or
such Third Party Obligor’s assets (including all intellectual property) now
owned or hereafter acquired, except (a) Permitted Liens, and (b) any of the
foregoing in favor of Bank or which is existing as of, and disclosed to Bank in
writing prior to, the date hereof; nor agree (or cause or permit any Third Party
Obligor to agree) with any third party to prohibit, condition or restrict the
granting of security interests or liens in the assets of Borrower or such Third
Party Obligor.

 

SECTION 5.8.         SPECIFIED TRANSACTIONS. Enter in to any Specified
Transaction with respect to which the Total Non-Stock Consideration paid or
payable by Borrower and/or any Subsidiary exceeds Fifty Million Dollars
($50,000,000.00); provided, however, that Borrower and any Third Party Obligor
may enter into a Specified Transaction regardless of the value of Total
Non-Stock Consideration so long as such Specified Transaction involves no
unaffiliated third parties and involves only (i) the Borrower and one or more
Subsidiaries or (ii) two or more Subsidiaries. “Specified Transaction” means any
of the following, provided that the applicable transaction has been approved by
the Board of Directors of the entity (i) whose assets or equity interests are
being acquired, or (ii) which is merging with Borrower or a Third Party Obligor:

 

(a)    the acquisition by Borrower or a Third Party Obligor of all or
substantially all of the assets of another entity or division of such entity;

 

(b)    the merger or consolidation of any Third Party Obligor with or into any
other entity, provided that the surviving entity shall be a Third Party Obligor;
and

 

(c)     the acquisition by Borrower or any Third Party Obligor of a controlling
or majority interest in any other entity;

 

“Total Non-Stock Consideration” means all consideration whatsoever (other than
stock in Borrower or a Subsidiary) and shall include, without limitation, cash,
other property, assumed indebtedness, amounts payable, whether evidenced by
notes or otherwise and “earn-out” payments.

 

SECTION 5.9.         CHANGE OF CONTROL. In no event shall Borrower (i) merge
into or consolidate with any other entity; (ii) make any substantial change in
the nature of Borrower’s business as conducted as of the date hereof (iii) cause
or permit any Third Party Obligor 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”

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION

 

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defined for the purpose of this covenant as 25% or more of the book value of
such consolidated assets (based on the then most recent fiscal year end
financial statement then delivered or deemed delivered to Bank hereunder) in any
fiscal year.

 

SECTION 5.10.      CASH LIMIT. Cause or permit SunPower Philippines
Manufacturing, Ltd.’s cash, cash equivalents and marketable securities at any
time to exceed an aggregate of Twenty Million Dollars ($20,000,000.00).

 

ARTICLE VI

EVENTS OF DEFAULT

 

SECTION 6.1.         The occurrence of any of the following shall constitute an
“Event of Default” under this Agreement:

 

(a)    Borrower shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents.

 

(b)    Any financial statement or certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other party
under this Agreement or any other Loan Document shall prove to be incorrect,
false or misleading in any material respect when furnished or made.

 

(c)     Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of thirty (30) days from the date an officer of Borrower
first learned (or had reasonable due diligence been exercised, should have
learned) of its occurrence.

 

(d)    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) pursuant to which Borrower or any Third Party
Obligor has incurred any debt or other liability to any person or entity,
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 in excess of Ten Million Dollars ($10,000,000.00).

 

(e)     The filing of a notice of judgment lien(s) in excess of an aggregate of
Ten Million Dollars ($10,000,000.00) against Borrower or any Third Party
Obligor; or the recording of any abstract(s) of judgment in excess of an
aggregate of Ten Million Dollars ($10,000,000.00) against Borrower or any Third
Party Obligor in any county in which Borrower or such Third Party Obligor 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 ($10,000,000.00) against the assets of Borrower or any Third
Party Obligor; or the entry of a judgment(s) in excess of an aggregate of Ten
Million Dollars ($10,000,000.00) against Borrower or any Third Party Obligor.

 

(f)     Borrower, any Subsidiary or any Third Party Obligor shall become
insolvent, or shall suffer or consent to or apply for the appointment of a
receiver, trustee, custodian or liquidator of itself or any of its property, or
shall generally fail to pay its debts as they become due, or shall make a
general assignment for the benefit of creditors; Borrower, any Subsidiary or any
Third

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
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Party Obligor shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time (“Bankruptcy Code”), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower, any Subsidiary or any Third Party Obligor, or Borrower, any Subsidiary
or any Third Party Obligor shall file an answer admitting the jurisdiction of
the court and the material allegations of any involuntary petition; or Borrower,
any Subsidiary or any Third Party Obligor shall be adjudicated a bankrupt, or an
order for relief shall be entered against Borrower, any Subsidiary or any Third
Party Obligor by any court of competent jurisdiction under the Bankruptcy Code
or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors.

 

(g)     Reserved.

 

(h)    The dissolution or liquidation of Borrower or, except as otherwise
permitted under this Agreement, any Third Party Obligor; or Borrower or, except
as otherwise permitted under this Agreement, any such Third Party Obligor, or
any of its directors, stockholders or members, shall take action seeking to
effect the dissolution or liquidation of Borrower or such Third Party Obligor.
The dissolution of a Third Party Obligor shall not constitute an Event of
Default if the assets and liabilities of such Third Party Obligor are
transferred to Borrower or to another Third Party Obligor by reason of such
dissolution.

 

(i)      Any single entity or group of affiliated entities, other than Cypress
Semiconductor Corp., shall acquire all or substantially all of the common stock
of Borrower.

 

SECTION 6.2.         REMEDIES. Upon the occurrence of any Event of Default: 
(a) all indebtedness of Borrower under each of the Loan Documents, any term
thereof to the contrary notwithstanding, shall at Bank’s option and without
notice become immediately due and payable without presentment, demand, protest
or notice of dishonor, all of which are hereby expressly waived by Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) 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 resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
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.

 

ARTICLE VII

MISCELLANEOUS

 

SECTION 7.1.         NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
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SECTION 7.2.         NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:

 

BORROWER:

SUNPOWER CORPORATION

 

ATTN: General Counsel

 

3939 N. First Street

 

San Jose, CA 95134

 

Fax: (408) 240-5400

 

 

BANK:

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Peninsula RCBO

 

400 Hamilton Avenue

 

Palo Alto, CA 94301

 

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows:  (a) if sent by hand delivery, 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.

 

SECTION 7.3.         COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower 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 connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents, Bank’s continued administration hereof
and thereof, and the preparation of any amendments and waivers hereto and
thereto, (b) the enforcement of Bank’s rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
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
Borrower or any other person or entity.

 

SECTION 7.4.         SUCCESSORS, ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interests or rights hereunder without
Bank’s prior written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Bank’s rights and benefits under each of the Loan Documents. In connection
therewith, Bank may disclose all documents and information which Bank now has or
may hereafter acquire relating to any credit subject hereto, Borrower or its
business, any guarantor hereunder or the business of such guarantor, or any
collateral required hereunder; provided, that any such prospective assignee or
participant agree to be bound by the terms of the Confidentiality Agreement.

 

SECTION 7.5.         ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
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each credit subject hereto and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be amended or modified only in writing signed by each party
hereto.

 

SECTION 7.6.         NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

 

SECTION 7.7.         TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.

 

SECTION 7.8.         SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall 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.

 

SECTION 7.9.         COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.

 

SECTION 7.10.      GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

 

SECTION 7.11.      ARBITRATION.

 

(a)    Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise in any way arising out of
or relating to (i) any credit subject hereto, or any of the Loan Documents, and
their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement,
default or termination; or (ii) requests for additional credit.

 

(b)    Governing Rules. Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least One Million Dollars ($1,000,000.00) exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA’s optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to herein, as
applicable, as the “Rules”). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded to
it under 12 U.S.C. §91 or any similar applicable state law.

 

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(c)     No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

 

(d)    Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is Five Million Dollars ($5,000,000.00) or less will
be decided by a single arbitrator selected according to the Rules, and who shall
not render an award of greater than Five Million Dollars ($5,000,000.00). Any
dispute in which the amount in controversy exceeds Five Million Dollars
($5,000,000.00) shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

 

(e)     Discovery. In any arbitration proceeding, discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party’s presentation and that no alternative means for
obtaining information is available.

 

(f)     Class Proceedings and Consolidations. No party hereto shall be entitled
to join or consolidate disputes by or against others in any arbitration, except
parties who have executed any Loan Document, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.

 

(g)     Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.

 

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(h)    Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such dispute is not submitted to arbitration, the dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA’s selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

 

(i)      Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required by applicable law or regulation. If more than one agreement for
arbitration by or between the parties potentially applies to a dispute, the
arbitration provision most directly related to the Loan Documents or the subject
matter of the dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Loan Documents or any
relationship between the parties.

 

(j)     Small Claims Court. Notwithstanding anything herein to the contrary,
each party retains the right to pursue in Small Claims Court any dispute within
that court’s jurisdiction. Further, this arbitration provision shall apply only
to disputes in which either party seeks to recover an amount of money (excluding
attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small
Claims Court.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.

 

 

WELLS FARGO BANK,

SUNPOWER CORPORATION

NATIONAL ASSOCIATION

 

 

By:

/s/ EMMANUEL T. HERNANDEZ

 

By:

/s/ MATTHEW A. SERVATIUS

 

 

 Emmanuel T. Hernandez

 

Matthew A. Servatius

 

 Chief Financial Officer

 

Vice President

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
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Schedule 2.12(a) – Subsidiaries

 

1.              SunPower North America, Inc., a Delaware corporation 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 SunPower
Corporation;

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

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

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

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

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

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

14.       PowerLight Systems AG(1), a Swiss entity and wholly owned subsidiary
of SunPower Corporation, Systems;

15.       SunPower GmbH, a German entity and wholly owned subsidiary of
PowerLight Systems AG;

16.       Powerlight Energias Renovaveis Unipessoal Limitada(2), a Portuguese
entity and wholly owned subsidiary of PowerLight Systems AG; and

17.       SunPower Energy Systems Spain, S.L., a Spanish entity and wholly owned
subsidiary of PowerLight Systems AG.

 

Schedule 2.12(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.              Solar Star MW I, LLC, a Delaware limited liability company in
which SunPower Corporation, Systems is the sole member;

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

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

 

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(1)  SunPower intends to change the name to “SunPower System SA” or “SunPower
Europe SA”, depending on availability according to the government agency
overseeing such.

(2)  SunPower is filing with the appropriate government agency the necessary
paperwork to change the name to “SPWR Energias Renovaveis Unipessoal Limitada.”

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION

 

18

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Schedule 1.3 to Credit Agreement dated as of July 13, 2007

Price Schedule – Trade Services

 

As of April 2006

 

 

Services

 

Price

STANDBY LC

 

 

Issuance

 

15 bps p.a.

Amendment-Increase

 

15 bps p.a.

Amendment-No Increase

 

$65.00 min.

Examination/Payment

 

15 bps, $250.00 min.

Transfer

 

15 bps, $250.00 min.

Assignment

 

$500.00 ($750.00 with LC copy)

Consultation to Structure LC

 

$200.00/hr

Special Handling

 

$250.00 min.

Cancellation

 

$100.00

 

***                 CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION

 

19

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