SECOND AMENDMENT AND LIMITED WAIVER TO LOAN AGREEMENT
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
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.
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a.
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A
new Section 4.19 is inserted into the Loan Agreement to read as
follows:
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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
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):
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a.
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Borrower
and each Guarantor shall have executed and delivered to Bank this
Amendment;
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b.
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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
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c.
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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.
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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
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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blank]
IN
WITNESS WHEREOF, Borrower, Guarantors and Lender have caused this Amendment to
be executed as of the date first written above.
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SUNPOWER
CORPORATION
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title: SVP
& CFO
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UNION
BANK, N.A.
By: /s/ J. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
Name: J.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice
President
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SUNPOWER
CORPORATION, SYSTEMS
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title: SVP
& CFO
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SUNPOWER
NORTH AMERICA, LLC
By:
SunPower Corporation, its sole member
By: /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title: SVP
& CFO
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