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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