Exhibit
10.1


 




CONFIDENTIAL TREATMENT REQUESTED


—


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.


 


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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


 


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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”


 


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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


 


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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.


 


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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


 


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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

  
						



 


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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.


 






(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

















 


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