Document:

Exhibit

Exhibit 10.1

THIRD AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), is entered into as of June 28, 2018, by and among TRUPANION, INC., a Delaware corporation (“Trupanion”), TRUPANION MANAGERS USA, INC., an Arizona corporation (“Trupanion Managers”; together with Trupanion, individually and collectively, “Borrower”), the several banks and other financial institutions or entities from time to time party to the Agreement (as hereinafter defined) (each a “Lender” and, collectively, the “Lenders”), and PACIFIC WESTERN BANK, a California state chartered bank (“PWB”), as a Lender and as administrative agent and collateral agent for the Lenders (in such capacities, the “Administrative Agent”).
RECITALS
		
	A.
	Borrower, the Administrative Agent, and the Lenders are parties to that certain Loan and Security Agreement dated as of December 16, 2016 (as amended from time to time, the “Agreement”).

		
	B.
	Borrower, the Administrative Agent, and the Lenders have agreed to make certain revisions to the Agreement as more fully set forth herein.

		
	C.
	Borrower has requested that the Administrative Agent and the Lenders amend the Agreement in accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:
		
	1)
	Section 2.7 of the Agreement is hereby amended by adding the following clause (e) immediately after clause (d) thereof:

(e)    Facility Fee.  Borrower shall pay to each Lender a facility fee equal to one-fifth of one percent (0.20%) of the applicable Revolving Commitment of such Lender on the Third Amendment Effective Date (“2018 Facility Fee”) and the earlier to occur of (i) each year anniversary of the Third Amendment Effective Date or (ii) the termination of this Agreement.
		
	2)
	The following defined terms set forth in Section 1.1 of the Agreement are hereby amended by deleting them in their entirety and replacing them with the following:

“Capitalized Expenditures” means current period unfinanced cash expenditures that are capitalized and amortized over a period of time in accordance with GAAP (excluding (a) up to Five Million Dollars ($5,000,000) of expenditures from Permitted Investments and (b) cash outflows related to Borrower’s building purchase, provided that such cash outflows are fully funded by an equity raise resulting in cash proceeds equal to at least the cost of such building purchase, in the fiscal quarters ending June 30, 2018 and September 30, 2018 in the amount of  up to (i) with respect to the fiscal quarter ending June 30, 2018, up to Three Million Two Hundred Fifty Thousand Dollars ($3,250,000) and (ii) with respect to the fiscal quarter ending September 30, 2018, Sixty-One Million Seven Hundred Fifty Thousand Dollars ($61,750,000)), including but not limited to capitalized cash expenditures for capital equipment, capitalized manufacturing and labor costs as they relate to inventory, and software development.

“Claims Ratio” means the ratio of (a) the twelve (12)-month rolling average of claims expenses of APIC and Wyndham (in each case excluding Loss Adjustment Expenses) to (b) the twelve (12)-month rolling average of premium revenues of APIC and Wyndham during the same period, expressed as a percentage.
“Revolving Line” means a Credit Extension of up to Fifty Million Dollars ($50,000,000) (inclusive of any amounts outstanding under the LC and Ancillary Services Sublimit).
“Revolving Loan Note” means a promissory note in the form of Exhibit F, as it may be amended, supplemented, restated or otherwise modified from time to time.
“Revolving Maturity Date” means June 28, 2021.
		
	3)
	The following defined terms are hereby added to Section 1.1 of the Agreement in alphabetical order:

“2018 Facility Fee” is defined in Section 2.7(e).
“Third Amendment Effective Date” is June 28, 2018.
		
	4)
	Clause (f) of the definition of “Permitted Investments” set forth in Section 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

(f) Investments not to exceed Two Million Dollars ($2,000,000) outstanding in the aggregate at any time consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, (ii) loans to employees, independent contractors that have entered into territory partner agreements with Borrower, officers or directors relating to payroll or the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors, and (iii) strategic investments.
		
	5)
	Clauses (b), (c), (d), and (f) of Section 6.7 of the Agreement are hereby amended by deleting each in its entirety and replacing each with the following, respectively:

(b)    Borrower’s Minimum Cash.  Borrower shall maintain a balance of Cash, investments, CDARS products, and other instruments maintained by any of the Lenders in an aggregate amount of not less than Three Million Five Hundred Thousand Dollars ($3,500,000) on a pro rata basis according to the respective Revolving Percentage of each Lender inclusive of Borrower’s Minimum Cash at WAB pursuant to Section 6.7(f)).
(c)    Minimum Quarterly Revenue.  Borrower shall generate Revenue measured on a rolling three (3) month basis of not less than the following amounts at the following applicable times:
	
		
	Quarter Ending
	Minimum Trailing 3 Month Revenue

	March 31, 2018
	$62,000,000

	June 30, 2018
	$64,000,000

	September 30, 2018
	$67,000,000

	December 31, 2018
	$70,000,000

Commencing with the month ending March 31, 2019 and as of the last day of each calendar quarter thereafter, the minimum Revenue covenant set forth in this Section 6.7(c) shall be equal to eighty percent (80%) of Trupanion’s projected Revenue for the corresponding three month period as determined from Trupanion’s annual financial projections approved by Trupanion’s Board of Directors and delivered to Administrative Agent which such projections shall constitute growth over the immediately preceding fiscal year of not less than ten percent (10%).  

(d)    Maximum EBITDA Loss.  Commencing the quarter ending June 30, 2018 and as of the last day of each quarter thereafter, Borrower’s consolidated EBITDA losses measured on a trailing three (3) month basis shall not be greater than negative Two Hundred Fifty Thousand Dollars (-$250,000).
(f)    Borrower’s Minimum Cash at WAB.  Borrower and its Subsidiaries shall at all times on and after June 28, 2018 maintain a balance of unrestricted Cash, in one or more non-interest bearing accounts with WAB in an aggregate amount of not less than One Million Four Hundred Thousand Dollars ($1,400,000).  At least a percentage equal to WAB’s Revolving Percentage of Borrower’s Cash on an average daily balance measured on a monthly basis shall be in an account(s) with WAB (and/or one or more Affiliates of WAB, as approved by WAB in its discretion).
		
	6)
	Schedule 1.1 of the Agreement is hereby amended by deleting it in its entirety and replacing it with Schedule 1.1 attached hereto.

		
	7)
	Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement.  The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects.  Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Administrative Agent under the Agreement, as in effect prior to the date hereof.  Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

		
	8)
	Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment.

		
	9)
	Borrower (a) acknowledges and consents to all of the terms and conditions of this Amendment; (b) affirms all of its obligations under the Loan Documents; and (c) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge such Borrower’s obligations under the Loan Documents.

		
	10)
	Each Borrower (a) affirms that each of the Liens granted in or pursuant to the Loan Documents are valid and subsisting; and (b) agrees that this Amendment and all documents executed in connection herewith shall in no manner impair or otherwise adversely affect any of the Liens granted in, or pursuant to, the Loan Documents.

		
	11)
	This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

		
	12)
	As a condition to the effectiveness of this Amendment, Administrative Agent shall have received, in form and substance reasonably satisfactory to Administrative Agent, the following:

a)this Amendment, duly executed by Borrower;

b)the Amended and Restated Revolving Note by Borrower in favor of PWB, duly executed by Borrower;

c)the Amended and Restated Revolving Note by Borrower in favor of WAB, duly executed by Borrower;

d)payment of the 2018 Commitment Fee pursuant to Section 2.7(e);

e)payment of all Administrative Agent expenses, including Administrative Agent’s expenses for the documentation of this amendment and any related documents, and any UCC, good standing or intellectual property search or filing fees, which may be debited from any of Borrower’s accounts; and

f)such other documents and completion of such other matters, as Administrative Agent may reasonably deem necessary or appropriate.

[Signatures on the Following Pages]

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
    	
		
	BORROWR:

	TRUPANION, INC.

	 
	 

	By:
	/s/ Tricia Plouf

	Name:
	Tricia Plouf

	Title:
	CFO

	 
	 

	 
	 

	TRUPANION MANAGERS USA, INC.

	 
	 

	By:
	/s/ Tricia Plouf

	Name:
	Tricia Plouf

	Title:
	CFO / Treasurer 

	 
	 

	 
	 

	ADMINISTRATIVE AGENT:

	PACIFIC WESTERN BANK, as the Administrative Agent

	 
	 

	By:
	/s/ Stephin J. Borus

	Name:
	Stephin J. Borus

	Title:
	SVP

	 
	 

	
		
	LENDERS:

	PACIFIC WESTERN BANK, as a Lender

	 
	 

	By:
	/s/ Stephin J. Borus

	Name:
	Stephin J. Borus

	Title:
	SVP

	 
	 

	 
	 

	WESTERN ALLIANCE BANK, as a Lender 

	 
	 

	By:
	/s/ Jeff Brown 

	Name:
	Jeff Brown 

	Title:
	VP

	 
	 

	 
	 

SCHEDULE 1.1
COMMITMENTS AND COMMITMENT PERCENTAGES
REVOLVING COMMITMENTS
	
			
	Lender
	Revolving Commitment
	Revolving Percentage

	 
	 
	 

	Pacific Western Bank
	$30,000,000
	60.00%

	Western Alliance Bank
	$20,000,000
	40.00%

	Total
	$50,000,000
	100.00%Exhibit

Exhibit 10.2

THIRD LEASE AMENDMENT

Between

BENAROYA CAPITAL COMPANY, LLC

and

TRUPANION, INC.

This Third Lease Amendment dated May 9, 2018 is attached to and made part of that certain Lease dated August 10, 2015 as amended by a First Lease Amendment dated April 29, 2016 and as further amended by a Second Lease Amendment dated October 20, 2017 (collectively the “Lease”) between Benaroya Capital Company, LLC, a Washington limited liability company, as “Landlord” and Trupanion, Inc., a Delaware corporation, as “Tenant” in Suite 200 of the Building known as the 6100 Building, located at 6100 Fourth Avenue South, in Seattle, Washington (the “Premises”).  The Premises are more particularly described in the Lease.

The terms used herein shall have the same definitions as set forth in the Lease.

RECITALS

		
	•
	At the Tenant’s request prior to the delivery of Suite 100B as a component of Phase I the location of the demising wall between Suite 100B and Suite 101, which was a component of Phase II was relocated to become a component of Phase I.

		
	•
	As a result of the relocation of the demising wall, Suite 100B contains 308 rentable square feet of additional space.

NOW THEREFORE, in consideration of the mutual covenants and promises contained in this Third Lease Amendment and the Lease, and Landlord and Tenant agree as follows:

		
	1.
	Premises. Section 1. Premises is hereby deleted and replaced with the following:

Premises.  Landlord does hereby lease to Tenant those certain premises, to wit:  107,642 rentable square feet of office space (including 5959 rentable square feet of daycare space comprised of the initial 5016 square feet of space and 943 square feet of expansion space) comprising the entire first and second floors as outlined on the Floor Plan attached to this Third Lease Amendment as “Exhibit B-2 Revised Floor Plan of Premises” (hereinafter called the “Premises”) in the Building known as The 6100 Building located at 6100 Fourth Avenue South in Seattle, Washington, situated on land legally described on Exhibit A attached hereto and incorporated herein. Delivery of the Premises to Tenant will be in Phases (the “Phase In Period”) as follows:

Premises- Phase In Period

	
				
	Date:
	Floor
	Suite(s)
	RSF
Leased 

	7/23/16
Initial Phase
	2
1 
1
	Suite 200
Daycare
Stairway
	67,065
5,016
159

Total= 72,240

	4/1/17
Phase I
	2
1
1
1
1
	Suite 200
Daycare
Stairway
Suites 100A, 100B, 100C
Daycare expansion
	67,065
5,016
159
17,025
943

Total= 90,208

	4/1/18
Phase II
	2
1
1
1
1
	Suite 200
Daycare
Daycare expansion
Stairway
Suites 100A, 100B, 100C
Suite 101
	67,065
5,016
943
159
17,025
17,434

Total=107,642

The phased portions of the Premises are shown on Exhibit B (each, a “Phase”).  The day care portion of the premises shall have access to adjacent outdoor space of a size and configuration as required by code for operation of a day care facility of the size and capacity described in this Lease for the exclusive use of the day care facility. Landlord and Tenant agreed that Landlord has no responsibility for increasing the size of the daycare or for increasing the size or modifying the outdoor space, if required, and that Tenant will responsible for all costs for construction and compliance issues related to any daycare expansion.  Phase I has been delivered to Tenant and Rent applicable to the Phase I space, including the Daycare expansion space, commenced on April 1, 2017. 

Phase II shall be delivered on or before August 27, 2018 in the condition described in Section 11 and Exhibit E below; however, Rent associated with the Phase II space will commence on April 1, 2018.  The delivery date may be reasonably delayed as necessary in order to complete design, permitting and construction, understanding that such delays may not be within the control of Landlord or Tenant and that the parties will negotiate in good faith to ensure that the delivery date is reasonable and that no penalty charges are owed by Landlord to Tenant in a situation where the Landlord used reasonable efforts to deliver the space at the time requested by Tenant, which may change over time (such causes for variance from the August 27, 2018 delivery date being a “Reasonable Phase II Delay”).  If Landlord fails to deliver possession of Phase II of the Premises to Tenant in the condition required under this Lease on or before: (i) August 27, 2018 (the “Late Delivery Date”), Tenant shall be entitled to one (1) day’s free Base Rent  (calculated for  the Premises not timely delivered) for each day following such Late Delivery Date until the earlier of (x) the actual Delivery Date and (y) sixty days after the Late Delivery Date (such date, as may be extended by force majeure, being the “Penalty Delivery Date”) and (ii) the Penalty Delivery Date, Tenant shall be entitled to two (2) days of free Base Rent for each day following the Penalty Delivery Date until the actual Delivery Date.

The Building is hereafter sometimes referred to as the “Project”.  In addition, the Tenant has the right, in common with other tenants in the Project and subject to the Rules and Regulations, to use of the Common Areas.  The Common Areas include a new state of the art building conference room seating 100 people or more, a new fitness center, including showers and lockers that are accessible to a new secure bicycle storage area as depicted on the Floor Plan - Exhibit B (the “New Common Amenities”).  The New Common Amenities have all been completed and shall be available to Tenant at no charge.  The total rentable area of the Building is currently 231,514 square feet, which has been measured according to ANSI/BOMA Z65.1 - 2010. 

		
	2.
	Monthly Minimum Rent. Section 3. Monthly minimum Rent is hereby deleted and replaced with the following:

Monthly Minimum Rent.  Tenant covenants and agrees to pay Landlord at 3600 136th Place SE, Suite 250, Bellevue, WA 98006, or to such other party or at such other place as Landlord may hereafter designate in writing, Monthly Minimum Rent in the following amounts according to the schedule below and Additional Rent, as provided in Section 9, in advance without offset or deduction (except as may otherwise be provided herein), on or before the first (1st) business day of each month of the Lease Term.  Any amount payable by Tenant to Landlord under this Lease shall be considered “Rent”:
Based on the schedule above the Rent schedule will be as follows:
	
		
	Period:
	Monthly Minimum Rent (Base Rent):

	July 23, 2016 through March 31, 2017
	$101,437.00

	April 1, 2017 through July 22, 2017
	$126,667.06

	July 23, 2017 through March 31, 2018
	$132,305.06

	April 1, 2018 through July 22, 2018
	$157,874.93

	July 23, 2018 through July 22, 2019
	$164,602.55

	July 23, 2019 through July 22, 2020
	$171,330.18

	July 23, 2020 through July 22, 2021
	$178,057.81

	July 23, 2021 through July 22, 2022
	$184,785.43

	July 23, 2022 through July 22, 2023
	$191,513.06

	July 23, 2023 through July 22, 2024
	$198,240.68

	July 23, 2024 through July 22, 2025
	$204,968.31

	July 23, 2025 through July 22, 2026
	$211,695.93

		
	3.
	Rent Reconciliation.  Tenant will promptly pay to Landlord the Rent associated with the additional 308 square feet of space in Suite 100B for the period from April 1, 2017 through March 31, 2018 following delivery of a statement by Landlord calculating the amount payable.

		
	4.
	Updated Floor Plan.  Exhibit B-1 Revised Floor Plan of Premises is hereby deleted and replaced with Exhibit B-2 Revised Floor Plan of Premises attached to this Third Lease Amendment.

Except as otherwise modified by the Terms of this Third Lease Amendment, all other terms and conditions of the Lease remain unchanged and in full force and effect.

	
					
	LANDLORD:
	 
	TENANT:

	BENAROYA CAPITAL COMPANY, LLC,
	TRUPANION, INC.,

	a Washington limited liability company
	a Delaware corporation,

	 
	 

	/s/ Larry R. Benaroya
	/s/ Darryl Rawlings

	By: Larry R. Benaroya
	By: Darryl Rawlings

	Its: Manager
	Its: CEO

	 
	 

	Date: 5/10/2018
	Date: 5/9/2018

	 
	 

            

STATE OF WASHINGTON    ]
] ss.
COUNTY OF KING        ]

On this 10th day of May, 2018 before me personally appeared Larry R. Benaroya, to me known to be the Authorized Signatory of Benaroya Capital Company, LLC, a Washington limited liability company (“Landlord”) and acknowledged said instrument to be the free and voluntary act and deed of said limited liability company, for the uses and purpose therein mentioned, and on oath stated that he was authorized to execute said instrument.  

IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year first above written.
                            
	
		
	/s/ Sandra Joan Sumner

	Notary Public in and for the State of Washington,

	Residing at
	Mountlake Terrace

	Commission expires
	May 25, 2020

	Print Name
	Sandra Joan Sumner

STATE OF            ]
] ss.
COUNTY OF            ]

On this 9th day of May, 2018 before me personally appeared Darryl Rawlings, to me known to be the CEO of Trupanion, Inc., a Delaware corporation (“Tenant”) and acknowledged said instrument to be the free and voluntary act and deed of said corporation, for the uses and purpose therein mentioned, and on oath stated that he was authorized to execute said instrument.

IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year first above written.
                            
	
		
	/s/ Charlotte M. Sim-Warner

	Notary Public in and for the State of Washington,

	Residing at
	Lynnwood, WA

	Commission expires
	August 9, 2018

	Print Name
	Charlotte M. Sim-Warner

EXHIBIT B-2 REVISED FLOOR PLAN OF PREMISES

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