Exhibit 10.42

 

Certain information has been excluded from this Exhibit because it is both not
materIal and would likely cause competitive harm to the company if publicly
disclosed.  Omissions are designated as [***].

 

EXECUTION

RECRUITING SERVICES AGREEMENT

 

This RECRUITING SERVICES AGREEMENT (“Agreement”) is made and entered into as of
March 4, 2020 (the “Effective Date”), by and between VIVINT SOLAR DEVELOPER,
LLC, a Delaware limited liability company (together with its successors and
permitted assigns, “VSLR”), and VIVINT, INC., a Utah corporation (together with
its successors and permitted assigns “Smart Home”). Each of VSLR and Smart Home
may also be referred to herein individually as a “Party”, and collectively as
the “Parties”.

RECITALS

WHEREAS, VSLR and Smart Home are affiliate business entities;

WHEREAS, the Parties entered into (i) that certain Master Intercompany Framework
Agreement, dated as of September 30, 2014 (the “Framework Agreement”); (ii) that
certain Marketing and Customer Relations Agreement, dated as of September 30,
2014, as amended by that certain Marketing and Customer Relations Agreement No.
1, dated as of November 30, 2016, and as further amended by that certain
Marketing and Customer Relations Agreement No. 2, dated as of August 16, 2017
(collectively, the “Marketing Agreement”); and (iii) the Non-Competition and
Non-Solicitation Agreement, dated as of September 30, 2014, as amended by that
certain Amendment No. 1 to the Non-Competition and Non-Solicitation Agreement,
dated as of August 16, 2017 (collectively, the “Non-Competition Agreement”); and

WHEREAS, each Party desires to provide recruiting services to the other Party,
and each Party desires to compensate the other Party for such services, in each
case as more particularly described in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
conditions set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

1.Definitions. Any capitalized term used but not defined in this Section 1 or
elsewhere in this Agreement shall have the meaning ascribed to such term in the
Framework Agreement.

(a)“Customer” means a residential homeowner that signs a Customer Agreement.

(b)“Customer Agreement” means an agreement with a Customer on a Party’s standard
form.

(c)“Dealer” means an independent contractor engaged by a Party that provides
lead generation, solicitation, marketing, and/or advertising services to
identify prospective customers for such Party.  A Dealer of a Party will
continue to be deemed a Dealer of such Party for one hundred eighty (180) days
after termination of relationship between such Party and such Dealer.

(d)“Event of Default” means the failure of either Party to comply with any
material obligation under this Agreement and such Party’s subsequent failure to
cure such non-compliance within thirty (30) days following written notice or
becoming aware thereof.

 

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EXECUTION

(e)“Historical Recruit” means each Recruited Individual that (i) was hired by
VSLR beginning on June 1, 2019 and ending on July 31, 2019; and (ii) immediately
prior to such date of hire by VSLR, was employed by Smart Home. The complete
list of the Historical Recruits is set forth on Exhibit A.

(f)“Installed System” means a System that was installed by a Party in its
entirety (including electrically complete).

(g)“Key Employee” means (i) any member of a Party’s executive or senior
management team, (ii) any employee of a Party who is (1) primarily engaged in
sales, or (2) managing installation or servicing of that Party’s products and
services to end user customers. A Key Employee of a Party will continue to be
deemed a Key Employee of such Party for one hundred eighty (180) days after
termination of the employment relationship between such Party and such Key
Employee.

(h)“Leader” means, as applicable, a Party’s district sales managers, regional
sales directors, and regional sales vice presidents

(i)“New Recruit” means each Recruited Individual who was hired by a Party after
August 1, 2019. For the avoidance of doubt, a Sales Representative recruited by
a New Recruit shall not be considered a New Recruit.

(j)“Originated” means when a Sales Representative solicits a prospective
customer for interest in a System and such Customer (i) is eligible and
qualifies under the Party’s applicable credit and underwriting policies; (ii)
signs a Customer Agreement; and (iii) passes a Welcome Call to the Party’s
satisfaction.

(k)“Override” means an amount denoted in cents per watt per Installed System
that was Originated by a New Recruit that would have otherwise been paid by a
Party to its Leaders for such Installed System.

(l)“Recruited Individual” means a Sales Representative that was employed by a
Party immediately prior to the date he or she became employed by the other
Party.

(m)“Restricted Parties” means

(i)with respect to Smart Home, collectively, 313 Acquisition, LLC, a Delaware
limited liability company and all of its direct or indirect subsidiaries that
may exist now or after the Effective Date (but specifically excluding Vivint
Solar, Inc. and its direct and indirect subsidiaries), together with their
respective employees, agents, and contractors.

(ii)with respect to VSLR, collectively, Vivint Solar, Inc., a Delaware
corporation and all of its direct or indirect subsidiaries that may exist now or
after the Effective Date, together with their respective employees, agents, and
contractors

(n)“System” means (1) with respect to VSLR, a photovoltaic system comprised of
panels, inverters, racking, and other component parts; and (2) with respect to
SmartHome, a smart home system and each component connected thereto.

(o)“Term” means the period commencing on the Effective Date and terminating on
the second (2nd) anniversary hereof.

 

 

2

Recruiting Services Agreement

 

 

(VSLR – Smart Home)

 

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EXECUTION

2.Provision of Services; Standard of Performance; Fees.  

(a)Services.  Each Party will provide to the other Party certain services
relating to the recruiting of qualified door-to-door sales representatives for
employment with the other Party (each, a “Sales Representative”) and other
recruiting-related services requested by a Party from time to time
(collectively, the “Services”).  

(b)Performance Standards.  Each Party will perform the Services with the same
degree of care and diligence that it performs its own operations, in a diligent
and workmanlike manner in accordance with industry standards and otherwise in
accordance with all applicable laws.

3.Fees and Payments.  

(a)Recruiting Fees.  Each Party agrees to pay to the other Party the recruiting
services fees as set forth in Exhibit B (collectively, the “Recruiting Fees”).
The Parties agree to review the Recruiting Fees on an annual basis or upon the
request of either Party, by providing the other Party with thirty (30) days’
notice, and such request shall not be made more than twice per calendar
year.  Exhibit B and the Recruiting Fees may only be amended or modified by the
Parties by and through the prior written consent of the Chief Executive Officers
of both Parties.  For the avoidance of doubt, no Recruited Individual shall be
entitled to additional fees under the Dealer Agreement.

(b)Claw-back.  If the Customer Agreement associated with any Installed System
for which a Recruiting Fee was paid by a Party is cancelled or terminated for
any reason within one (1) year of receipt of (i) with respect to VSLR,
permission to operate from the applicable utility, and (ii) with respect to
Smart Home, installation of the System, all Recruiting Fees paid to the Party
with respect to such Customer Agreement and Installed System shall be promptly
reimbursed by such Party.  To the extent of any such reimbursements, a Party may
set off or otherwise deduct such reimbursed amounts from the Recruiting Fees
otherwise due to the other Party under this Agreement or any other payment due
by one Party to the other Party.

(c)Payments.  All Recruiting Fees earned by a Party in a calendar month will be
paid by the other Party within thirty (30) days after the end of such calendar
month.  Upon the reasonable request of a Party, the other Party will provide to
such Party a summary of the Installed Systems that were Originated by Recruited
Individuals in such monthly period.  

(d)Taxes.  The Recruiting Fees are inclusive of all U.S. federal, state or local
or non-U.S. sales, use, goods and services, value added or other similar Taxes
or duties or other fees, however designated.  If the provision of the Services
or the relationship created between the Parties under this Agreement gives rise
to any Tax, that Tax will be the responsibility of the applicable Party.  The
Parties will cooperate with each other in order to minimize any Taxes relating
to the Recruiting Fees and to carry out the intent of this Agreement.  Each
Party is responsible for its own income, franchise, business and occupation and
similar Taxes.

4.Scope of Relationship; Non-Solicitation.  

(a)Non-Exclusive.  The business relationship described in this Agreement is not
exclusive and nothing in this Agreement shall prevent either Party from
independently pursuing a market opportunity with any other person or entity.

 

 

3

Recruiting Services Agreement

 

 

(VSLR – Smart Home)

 

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EXECUTION

(b)Non-Solicitation.

(i)During the Term, each Party agrees that it will not and will cause
its  Restricted Parties to not (1) directly or indirectly solicit or recruit any
Key Employee or Dealer of the other Party, or (2) encourage or in any way entice
a Key Employee or Dealer of the other Party to terminate or in any way cease its
relationship with such other Party.

(ii)Notwithstanding the foregoing, the Parties agree that the following will not
be a violation of this Section 4(b): the use of general newspaper or online
advertisement and other general non-targeted recruitment techniques in the
ordinary course of business.

(iii)The requirements set forth in this Section 4(b) may not be waived by any
employee, agent, or other person except as specifically approved by each Party’s
Chief Executive Officer or President in writing.

(iv)Each Party acknowledges and agrees that the remedy at law for any breach of
this Section 4(b) may be inadequate, and that the sole and exclusive remedy for
any breach by a Party or its Restricted Parties of the foregoing obligations
shall be for the other Party to seek specific performance, injunctive relief or
another equitable remedy.

5.Term and Early Termination.  

(a)Term.  This Agreement shall commence on the Effective Date and shall continue
throughout the Term; provided that this Agreement may be terminated earlier upon
the occurrence of the following:

(i)either Party undergoes a Change of Control;

(ii)the Dealer Agreement is terminated for any reason;

(iii)either Party provides 60 days’ written notice of its desire to terminate
this Agreement; or

(iv)an Event of Default.

(b)No Waiver.  Termination of this Agreement by either Party will not act as a
waiver of any breach or as a release of either Party from any liability for any
breach or indemnification obligations. Termination of this Agreement by a Party
will be without prejudice to any other right or remedy of that Party under this
Agreement or applicable Law.

(c)Survival.  The following Sections will survive any termination of this
Agreement: Sections 3 (with respect to amounts owed as of termination), 4, 5, 6,
and 7.

6.Indemnification; Limitation of Liability.  

(a)Indemnification.  

(i)Except to the extent directly caused by the negligence or willful misconduct
of VSLR, and without limiting any other Transaction Agreement, Smart Home hereby
agrees to defend, pay, indemnify, and hold VSLR (and its Representatives,
Subsidiaries, and other Affiliates, other than Smart Home and all direct and
indirect subsidiaries of Vivint Smart Home,

 

 

4

Recruiting Services Agreement

 

 

(VSLR – Smart Home)

 

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EXECUTION

Inc.) and its Subcontractors harmless from and against any and all claims,
demands, proceedings, judgments, and other liabilities of every kind, and all
reasonable expenses incurred in investigation and resisting the same (including
reasonable attorneys’ fees), resulting from or in connection with all third
Person Actions arising from or relating to: (i) the gross negligence or willful
misconduct of Smart Home, Smart Home’s Representatives, Subsidiaries or
Subcontractors, or any third Person performing Services on behalf of Smart Home
under this Agreement; or (ii) the failure by Smart Home to comply with its
obligations to any Smart Home employee, including payment of wages, provision of
benefits, and payment of employment Taxes.  If VSLR seeks indemnification, then
it will promptly notify Smart Home in writing of the Action for which
indemnification is sought, but the failure to give such notice will not relieve
Smart Home of its obligations under this Agreement except to the extent that
Smart Home was actually and materially prejudiced by that failure.  Smart Home
will have the right to control the defense and settlement of the Action, but
VSLR may, at its option and expense, participate and appear on an equal footing
with Smart Home.  Smart Home may not settle the Action without the prior written
approval of VSLR, which approval will not be unreasonably withheld, conditioned
or delayed.

(ii)Except to the extent directly caused by the negligence or willful misconduct
of Smart Home, and without limiting any other Transaction Agreement, VSLR hereby
agrees to defend, pay, indemnify, and hold Smart Home (and its Representatives,
Subsidiaries, and other Affiliates, other than Vivint Solar, Inc. and all direct
and indirect subsidiaries of Vivint Solar, Inc.) and its Subcontractors harmless
from and against any and all claims, demands, proceedings, judgments, and other
liabilities of every kind, and all reasonable expenses incurred in investigation
and resisting the same (including reasonable attorneys’ fees), resulting from or
in connection with all third Person Actions arising from or relating to: (i) the
gross negligence or willful misconduct of VSLR, VSLR’s Representatives,
Subsidiaries or Subcontractors, or any third Person performing Services on
behalf of VSLR under this Agreement; or (ii) the failure by VSLR to comply with
its obligations to any VSLR employee, including payment of wages, provision of
benefits, and payment of employment Taxes.  If Smart Home seeks indemnification,
then it will promptly notify VSLR in writing of the Action for which
indemnification is sought, but the failure to give such notice will not relieve
VSLR of its obligations under this Agreement except to the extent that VSLR was
actually and materially prejudiced by that failure.  VSLR will have the right to
control the defense and settlement of the Action, but Smart Home may, at its
option and expense, participate and appear on an equal footing with VSLR.  VSLR
may not settle the Action without the prior written approval of Smart Home,
which approval will not be unreasonably withheld, conditioned or delayed.

(b)Limitation of Liability.  Except for any breach by a Party of the
confidentiality provisions of the Master Framework Agreement, breach of the
non-solicitation provisions under Section 4(b), and/or liability arising from
the gross negligence or willful misconduct of a Party (including liability
arising from damage to personal property or the death or injury of any Person
caused by the gross negligence or willful misconduct of a Party), (i) neither
Party will have any liability to the other Party under this Agreement for
compensatory, punitive, special, incidental or consequential damages (including
loss of profits), regardless of the circumstances under which those damages
arose, even if advised of the possibility of those damages; and (ii) the maximum
liability of either Party under this Agreement, including with respect to the
performance or breach of this Agreement, whether in contract, in tort (including
negligence and strict liability) or otherwise, will not exceed greater of
$5,000,000 or the aggregate amount of all Recruiting Fees paid hereunder.

 

 

5

Recruiting Services Agreement

 

 

(VSLR – Smart Home)

 

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EXECUTION

7.Miscellaneous.

(a)Framework Agreement.  This Agreement is entered into pursuant to the
Framework Agreement, and all applicable terms therein are incorporated herein by
reference (mutatis mutandis), including (without limitation):  Section 4
(Confidentiality) and Section 6 (Miscellaneous).  

(b)Amendment and Waiver.  Except for an adjustment to the Recruiting Fees
pursuant to Section 3 above, no provisions of this Agreement may be amended or
waived except by and through the prior written consent signed by the Chief
Executive Officers of each Party, and no course of conduct or failure or delay
in enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.

(c)Cooperation.  The Parties will reasonably cooperate in good faith with each
other in connection with the provision of the Services.

(d)Dispute Resolution.  If a dispute arises regarding the interpretation or
execution of this Agreement, the Parties will negotiate in good faith and
attempt to resolve that dispute. If the Parties are unable to resolve a dispute
within two (2) weeks, then (and only then) either Party may pursue legal
recourse pursuant to the terms of the Master Framework Agreement.

 

[SIGNATURE PAGES FOLLOW]

 

 

 

6

Recruiting Services Agreement

 

 

(VSLR – Smart Home)

 

--------------------------------------------------------------------------------

 

EXECUTION

IN WITNESS WHEREOF, the Parties enter into this Agreement as of the Effective
Date.

 

VIVINT SOLAR DEVELOPER, LLC,

a Delaware limited liability company

 

By:

 

/s/ David Bywater

Name:

David Bywater

Title:

Chief Executive Officer

 

 

VIVINT, INC.,

a Utah corporation

 

By:

 

/s/ Todd Santiago

 

Name:

 

Todd Santiago

 

Title:

 

Chief Revenue Officer

 

 

 

 

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EXECUTION

EXHIBIT A

 

RECRUITED INDIVIDUALS

[***]

 

 

 

 

 

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EXECUTION

EXHIBIT B

 

FORM OF
FEE SCHEDULE ______

 

Effective Date:  ___________,20__

 

This FEE SCHEDULE No. _______ (this “Schedule”) is entered into as of the
Effective Date set forth above pursuant to that certain Recruiting Services
Agreement (the “Agreement”), dated as of _________, 2020, by and between VIVINT
SOLAR DEVELOPER, LLC, a Delaware limited liability company (together with its
successors and permitted assigns, “VSLR”), and VIVINT, INC., a Utah corporation
(together with its successors and permitted assigns “Smart Home”). Each of VSLR
and Smart Home may also be referred to herein individually as a “Party”, and
collectively as the “Parties”.  Any capitalized term used on this Schedule but
not defined herein shall have the meaning ascribed to such term in the
Agreement.

1.VSLR Recruiting Fees.  VSLR will pay Smart Home the following amounts for each
Installed System:

 

2.SmartHome Recruiting Fees.  SmartHome will pay VSLR the following amounts for
each Installed System that was Installed on or after the Effective Date:

[SIGNATURE PAGES FOLLOW]

 

 

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EXECUTION

IN WITNESS WHEREOF, the parties hereto have executed this Fee Schedule No. 1 by
their duly authorized representative to be effective as of the date first set
forth above.

 

VIVINT SOLAR DEVELOPER, LLC,

a Delaware limited liability company

 

By:

 

 

Name:

David Bywater

Title:

Chief Executive Officer

 

VIVINT, INC.,

a Utah corporation

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

The Parties hereby agree that this Schedule supersedes any and all prior dated
fee schedule under the Agreement.