EXHIBIT 10.42

SECOND AMENDMENT AND LIMITED WAIVER TO LOAN AGREEMENT
 
This Second Amendment and Limited Waiver to Loan Agreement (this “Amendment”),
dated as  of December 28, 2009, is entered into by and among SunPower
Corporation, a Delaware corporation (“Borrower”), SunPower Corporation, Systems,
a Delaware corporation (“SCS”), and SunPower, North America, LLC, a Delaware
limited liability company (together with SCS, collectively, the "Guarantors"),
and Union Bank, N.A. (“Lender”).
 
BACKGROUND
 
A.           Borrower and Lender are parties to a certain Loan Agreement, dated
as of April 17, 2009, (as amended from time to time the “Loan Agreement”),
pursuant to which Lender has provided a term loan to Borrower.  Any capitalized
term not defined herein shall have the meanings ascribed thereto in the     Loan
Agreement.
 
B.           To induce Lender to extend credit to Borrower, each Guarantor
executed and delivered to Lender a Continuing Guaranty, dated April 17, 2009,
guaranteeing the payment and performance of Borrower's obligations to Lender
(the “Guaranty”).
 
C.           Borrow publicly disclosed, in a press release issued on November
16, 2009, that the financial statements of Borrower for its 2008 fiscal year and
for the first three fiscal quarters of its 2009 fiscal year contain certain
accounting errors related to expenses in the costs of goods sold relating to
Borrower’s Philippine manufacturing operations (the “Accounting Errors”).
 
D.           Bank has notified Borrower and the Guarantors that Events of
Default have occurred  under: (a) Section 6.4 of the Loan Agreement due to the
representations and warranties set forth in     Section 3.7 of the Loan
Agreement and the representations and warranties set forth in paragraph (h) of
the Compliance Certificates dated May 15, 2009, August 8, 2009 and November 9,
2009 (the “Subject Compliance Certificates”) being misleading, false, untrue or
incorrect in one or more material respects when furnished, made or deemed made;
and (b) Section 6.11 of the Loan Agreement due to the   Accounting Errors
constituting defaults or events of default under certain other contracts and
instruments (collectively, the “Existing Defaults”).
 
E.           Borrower acknowledges that the Existing Defaults are not subject to
being cured, and   have not been waived or excused by Bank at any time or in any
manner.
 
F.           Borrower has requested that Lender amend certain provisions of the
Loan Agreement and agree to provide a limited waiver of the Existing Defaults,
and, although Bank is under no obligation to      do so, Bank is willing to so
amend the Loan Agreement and to grant such a waiver, in accordance with      the
terms, and subject to the conditions, set forth herein.
 
 
AGREEMENT
 
The parties to this Amendment, intending to be legally bound, hereby agree as
follows:
 
1. Incorporation of Recitals.  Each of the above recitals is incorporated herein
as true and correct and is relied upon by Lender in agreeing to the terms of
this Amendment.
 
2. Representations and Warranties of Borrower.  Borrower and each Guarantor
represents  and warrants, as of the date of this Amendment, for the benefit of
Bank that: (a) the representations and warranties set forth in the Loan
Agreement and the other Loan Documents are and remain true, correct     
 

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and complete as of the date hereof (except to the extent such representations
and warranties (i) expressly refer to an earlier date, in which case they are
true, correct and complete as of such earlier date, (ii) are in accurate due to
the Accounting Errors, which inaccuracy is expressly addressed in this Amendment
or       (iii) refer to the absence of Events of Default, in which case they are
true, correct and complete as to the absence of Events of Default other than the
Existing Defaults), (b) the parties and signatories hereto have the authority to
execute this Amendment, (c) other than the Existing Defaults, no event has
occurred or failed to occur that is, or, with notice or lapse of time or both
would constitute, a default, an Event of  Default, or a breach or failure of any
condition under any Loan Document, and (d) after giving effect to   this
Amendment and the waivers of the Existing Defaults, neither Borrower nor any
Guarantor has any offset, defense, counterclaim, dispute or disagreement of any
kind or nature whatsoever with respect to  their respective liabilities,
obligations and indebtedness arising under or in connection with any Loan
Documents.
 
3. Limited Waiver.  Subject to and on the terms and conditions set forth herein,
Bank     hereby waives the Existing Defaults; provided however, that such
waiver: (a) applies only to the instance specified above and for the times
stated, (b) is not a waiver of any subsequent breach of the same   provisions of
the Loan Agreement or any other Loan Document, (c) shall not extend or apply to,
and is      not a waiver of any breach of, any other Event of Default (or any
event which, with the giving of notice,    the lapse of time or both, would
constitute an Event of Default (any of the foregoing a “Default”)) other  than
the Existing Defaults, and (d) is not a waiver of any Event of Default arising
under Section 6.11 of     the Loan Agreement arising due to the Accounting
Errors, unless the defaults under the affected     contract(s) or instrument(s)
are waived by the other party(ies) thereto on or before December 31, 2009
by    a Modification (as the term is defined in the Loan Agreement as amended
hereby) that does not: (i)     contain terms that are determined by Bank to be
more restrictive or onerous than the terms contained in   this Amendment and
(ii) result in an Event of Default or Default.  Nothing herein constitutes a
waiver, amendment or forbearance of Borrower’s obligation to pay the
Obligations, as and when due.  This     waiver is not a continuing waiver with
respect to any Event of Default or any obligation that Borrower    may have
under the Loan Agreement or the other Loan Documents after the date
hereof.  Except as expressly set forth above, Bank does not waive any failure by
Borrower to perform any obligation under  the Loan Agreement or any other Loan
Document.  Except as expressly set forth above, this letter shall     not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Loan Agreement or any other Loan Document.  Bank reserves all of
the rights, powers and remedies available    to it under the Loan Documents and
applicable law, including the right to cease making advances to Borrower and to
accelerate any or all of Borrower's indebtedness if any subsequent breach of the
same provisions or any other provision of the Loan Agreement or any other Loan
Document should occur.     Bank is not obligated to grant this or any other
waiver.  Except for the waiver as expressly set forth above, the Loan Agreement
and each other Loan Document shall be and remain in full force and effect in
accordance with their respective terms.
 
4. Amendment to Loan Agreement.
 
a.  
A new Section 4.19 is inserted into the Loan Agreement to read as follows:

 
SECTION 4.19.                           Restated Financial Statements.  On or
before February 16, 2010, Borrower shall:  (i) (A) file with the SEC restated
financial statements for all fiscal   periods impacted by the “Accounting
Errors” (as that term is defined in the Second Amendment and Limited Waiver to
Loan Agreement dated as of December 23, 2009, by and among Bank, Borrower and
Guarantors (the “Second Amendment”), and/or (B) provide Bank a certificate
addressed to Bank, duly executed and delivered by the chief executive officer,
president, chief financial officer, treasurer or controller of Borrower,
certifying in reasonable detail the basis upon which Borrower has concluded that
the
 

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 financial statements for any or all of such fiscal periods do not require
restatement; and     (ii) provide to Bank a certificate addressed to Bank, duly
executed and delivered by the chief executive officer, president, chief
financial officer, treasurer or controller of Borrower, certifying that to the
best of Borrower’s knowledge after due inquiry, that the Accounting Errors have
not resulted in any Events of Default other than the Existing Defaults (as that
term is defined in the Second Amendment).
 
b.      A new Section 5.11 is inserted into the Loan Agreement to read as
follows:
 
5.11                 Modifications of Permitted Indebtedness.  Borrower shall
not amend, supplement or otherwise modify (or permit any of the foregoing) or
request or agree to   any consent or waiver under (any of the foregoing, a
“Modification”) any evidence of Permitted Indebtedness without the prior written
consent of Bank, except to the extent    that such Modification of Permitted
Indebtedness does not result and could not    reasonably be expected to result
in an Event of Default or any event which, with the   giving of notice, the
lapse of time or both, would constitute an Event of Default.
 
5. Conditions Precedent.  Borrower and each Guarantor understand that this
Amendment shall not be effective and the consent provided by Bank hereunder
shall have no force or effect until each   of the following conditions precedent
has been satisfied, or waived in writing by Bank (in Bnak's sole discretion):
 
a.  
Borrower and each Guarantor shall have executed and delivered to Bank this
Amendment;

 
b.  
The representations and warranties of Borrower and each Guarantor under the Loan
Agreement, the Guaranty and this Amendment, as applicable, shall be true
and    correct as of the date hereof (except to the extent such representations
and warranties  (i) expressly refer to an earlier date, in which case they are
true, correct and complete as of such earlier date, (ii) are inaccurate due to
the Accounting Errors, which inaccuracy is expressly addressed by this Amendment
or (iii) refer to the absence of Events of Default, in which case they are true,
correct and complete as to the absence of Events of Default other than the
Existing Defaults); and

 
c.  
Bank shall have received in immediately available funds, all out-of-pocket costs
and expenses (including reasonable attorneys’ fees and costs) incurred by Bank
in connection with the Existing Defaults, this Amendment and the transactions
contemplated hereby and invoiced to Borrower prior to the date on which this
Amendment is otherwise to become effective; provided that the failure to invoice
any such amounts to Borrower prior to such date shall not preclude Bank from
seeking reimbursement of such amounts, or excuse Borrower from paying or
reimbursing   such amounts, following the effective date of this Amendment.

 
6. Confirmation of Guaranty. Each Guarantor ratifies and reaffirms its
obligations under the Guaranty and each and every term, condition, and provision
of the Guaranty.  Each Guarantor further represents and warrants that it has no
defenses or claims against Bank that would or might affect the enforceability of
the Guaranty and that the Guaranty remains in full force and effect.
 
7. Ratification and Confirmation of Loan Documents.  Except as expressly set
forth herein, this Amendment shall not alter, modify, amend, or in any way
affect any of the terms, conditions, obligations, covenants, or agreements
contained in the Loan Agreement.  The Loan Agreement (as
 

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amended hereby), all promissory notes, guaranties, security agreements, and all
other instruments, documents and agreements entered into in connection with the
Loan Agreement and each other Loan Document shall be and remain in full force
and effect in accordance with their respective terms and     hereby are ratified
and confirmed by Borrower in all respects.  Nothing contained in this
Amendment     shall be construed to imply a willingness on the part of Bank to
grant any similar or other future waivers     or to agree to any future
amendments or modifications to any of the terms and conditions of the Loan
Agreement or the other Loan Documents or shall in any way prejudice, impair or
effect any rights or remedies of the Bank under the Loan Agreement or the other
Loan Documents, except insofar as they    arise solely due to the Existing
Defaults.  Except as expressly set forth herein with respect to the
Existing Defaults, the execution, delivery, and performance of this Amendment
shall not operate as a waiver of, or  as an amendment of, any right, power, or
remedy of Bank under the Agreement, as in effect prior to the   date
hereof.  Without limiting the generality of the foregoing, Bank expressly
reserves all of its rights and remedies with respect to any other violations
resulting from the Accounting Errors, including violations     of financial
covenants under the Loan Agreement that may result.  Nothing in this Amendment
shall constitute a satisfaction of Borrower’s or any Guarantor’s Obligations.
 
8. Miscellaneous.  Borrower and each Guarantor acknowledges and agrees that the
representations and warranties set forth herein are material inducements to Bank
to deliver this  Amendment.  This Amendment shall be binding upon and inure to
the benefit of and be enforceable by     the parties hereto, and their
respective permitted successors and assigns.  This Amendment and the Loan
Agreement shall be read together as one document.  No course of dealing on the
part of Bank or its     officers, nor any failure or delay in the exercise of
any right by Bank, shall operate as a waiver thereof,     and any single or
partial exercise of any such right shall not preclude any later exercise of any
such right.  Bank’s failure at any time to require strict performance by
Borrower of any provision shall not affect any right of Bank thereafter to
demand strict compliance and performance.  Any suspension or waiver of a   right
must be in writing signed by an officer of Bank.  Where any provisions of the
Loan Agreement amended by this Amendment appear in a promissory note tied to the
Loan Agreement, the same    provisions in said promissory note shall be deemed
likewise amended.  No other person or entity shall be entitled to claim any
right or benefit hereunder, including, without limitation, the status of a third
party beneficiary hereunder.  This Amendment shall be governed by and construed
in accordance with the laws  of the State of California without reference to
conflicts of law rules.  If any provision of this Amendment   or any of the
other Loan Documents shall be determined by a court of competent jurisdiction to
be       invalid, illegal or unenforceable, that portion shall be deemed severed
therefrom, and the remaining parts shall remain in full force as though the
invalid, illegal or unenforceable portion had never been a part thereof.  This
Amendment may be executed in any number of counterparts, including by electronic
or facsimile transmission, each of which when so delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one and
the same instrument.
 
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IN WITNESS WHEREOF, Borrower, Guarantors and Lender have caused this Amendment
to be executed as of the date first written above.
 

SUNPOWER CORPORATION
 
 
 
By: /s/ Dennis
Arriola                                                                
Name:                      Dennis Arriola
Title:           SVP & CFO
UNION BANK, N.A.
 
 
 
By: /s/ J. William Bloore                                                      
Name:           J. William Bloore
Title:           Vice President
 
SUNPOWER CORPORATION, SYSTEMS
 
 
 
By: /s/ Dennis
Arriola                                                                
Name:                      Dennis Arriola
Title:           SVP & CFO
 
 
 
SUNPOWER NORTH AMERICA, LLC
By: SunPower Corporation, its sole member
 
 
By: /s/ Dennis
Arriola                                                                
Name:                      Dennis Arriola
Title:           SVP & CFO