Document:

Document

[***] = Certain information contained in this document, marked by brackets, has been omitted because it is both not material and would be competitively harmful if publicly disclosed.

Exhibit 10.45

CONSENT AND TENTH AMENDMENT TO 
SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND
TENTH AMENDMENT TO AMENDED AND RESTATED 
CASH DIVERSION AND COMMITMENT FEE GUARANTY

This CONSENT AND TENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND TENTH AMENDMENT TO AMENDED AND RESTATED CASH DIVERSION AND COMMITMENT FEE GUARANTY, dated as of November 23, 2020 (this “Amendment”), is entered into among the undersigned in connection with (a) that certain Second Amended and Restated Credit Agreement, dated as of March 27, 2018, among Sunrun Hera Portfolio 2015-A, LLC, a Delaware limited liability company, as Borrower (the “Borrower”), the financial institutions as Lenders from time to time party thereto (the “Lenders”), and Investec Bank PLC, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”) and as Issuing Bank (in such capacity, the “Issuing Bank”) (the “Credit Agreement” and as amended by this Amendment, the “Amended Credit Agreement”) and (b) the Cash Diversion and Commitment Fee Guaranty (as in effect prior to the date hereof, the “Guaranty” and as amended by this Amendment, the “Amended Guaranty”). Capitalized terms which are used but not otherwise defined herein shall have the meanings ascribed to such terms in the Amended Credit Agreement and the rules of construction set forth in Section 1.02 of the Credit Agreement apply to this Amendment. 
W I T N E S S E T H
WHEREAS, the Borrower wishes to obtain, and the Administrative Agent and the Required Lenders wish to provide, consent to the acquisition by the Borrower of Sunrun Ursa Manager 2020, LLC, a Delaware limited liability company and a Tax Equity Holdco (such acquisition, the “Tax Equity Holdco Acquisition”); and
WHEREAS, the Borrower and the Sponsor also wish to make, and the undersigned also wish to agree to make, certain additional amendments to the Credit Agreement and the Guaranty as provided herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
I.Amendments to the Credit Agreement.  Subject to the satisfaction of the conditions set forth in Article IV below, the following amendments to the Credit Agreement are hereby accepted and agreed by the parties hereto:
1.Amendment to Section 1.01.  The following is hereby added as a new defined term to Section 1.01 of the Credit Agreement in the appropriate alphabetical order:
““Ursa 2020 LLCA” shall mean that certain Amended and Restated Operating Agreement of Sunrun Ursa Owner 2020, LLC, dated as of July 
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31, 2020, entered into by and among Sunrun Ursa Manager 2020, LLC, [***] and [***].”
2.Amendment to Section 1.02.  Section 1.02 of the Credit Agreement is hereby amended by (i) replacing the period at the end of clause (h) with the text “; and” and (ii) inserting the following as a new clause (i):
“(i)    any reference herein to the taking of an action by a Tax Equity Class A Member shall be deemed to refer to the taking of such action by either or both of, as applicable, such Tax Equity Class A Member or the Person or Persons (other than Sponsor or any Affiliate of Sponsor) authorized to take such action on behalf of such Tax Equity Class A Member pursuant to the applicable Tax Equity Document.”
3.New Section 7.29.  Article VII of the Credit Agreement is hereby amended by inserting the following as a new Section 7.29:
“The Borrower shall not cause or otherwise permit any [***] Project (as defined in the Ursa 2020 LLCA) to be treated as an Eligible Project.”
4.New Section 7.30.  Article VII of the Credit Agreement is hereby amended by inserting the following as a new Section 7.30:
“The Borrower shall not cause or otherwise permit any New Home Project (as defined in the Ursa 2020 LLCA) to be treated as an Eligible Project unless and until (i) such New Home Project has become a “Former New Home Project” (as defined in the Ursa 2020 LLCA), (ii) such Former New Home Project meets the conditions set forth in the definition of “Eligible Project” and (iii) there has occurred an inspection of the residential structure or building associated with such New Home Project conducted by an official of the applicable Governmental Authority when such structure or building is completed and ready for occupancy.”
II.Amendment to the Cash Diversion and Commitment Fee Guaranty. Subject to the satisfaction of the conditions set forth in Article IV below, the definition of “Cash Diversion” in Section 1.01 of the Guaranty is hereby amended by (i) replacing the period at the end of clause (kk) with the text “; and” and (ii) inserting the following as a new clause (ll):
“(ll)    if, for any quarterly period preceding a Calculation Date, expenses, including, without limitation, operations and maintenance expenses and payments under any production guarantee, incurred in connection with any and all [***] Projects (as defined in the Ursa 2020 LLCA) exceed aggregate revenues from such [***] Projects, in the amount of such excess.” 
III.Limited Consent.  At the request of the Borrower and subject to the satisfaction of the conditions set forth in Article IV below, the Administrative Agent and each of the undersigned Lenders hereby consents and agrees to the Tax Equity Holdco Acquisition, for which consent of the Administrative Agent and the Required Lenders is required pursuant to Section 2.05(b)(iii) of 
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the Amended Credit Agreement (the “Consent”).  The Consent granted pursuant to this Article III is limited precisely as written and shall not extend to any other provision of the Credit Agreement or the Amended Credit Agreement.
IV.Conditions Precedent to Effectiveness.  The amendments contained in Articles I and II and the Consent contained in Article III shall not be effective until the date (such date, the “Amendment Effective Date”) that:
1.the Administrative Agent shall have received copies of this Amendment executed by the Borrower, the Sponsor and the Required Lenders, and acknowledged by the Administrative Agent; and 
2.the Borrower shall have paid all fees, costs and expenses of the Administrative Agent and the Lenders incurred in connection with the execution and delivery of this Amendment (including third-party fees and out-of-pocket expenses of the Lenders’ counsel and other advisors or consultants retained by the Administrative Agent).
V.Representations and Warranties. Each of the Borrower and, as applicable, the Sponsor represents and warrants to each Agent and each Lender Party that the following statements are true, correct and complete in all respects as of the Amendment Effective Date:
1.Power and Authority; Authorization.  Each of the Borrower and the Sponsor has all requisite power and authority to execute, deliver and perform its obligations under this Amendment and the Borrower has all requisite power and authority to perform its obligations under the Amended Credit Agreement and the Sponsor has all requisite power and authority to perform its obligations under the Amended Guaranty.  Each of the Borrower and the Sponsor has duly authorized, executed and delivered this Amendment.
2.Enforceability.  Each of this Amendment and the Amended Credit Agreement is a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except to the extent that enforceability may be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights, (ii) the effect of general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) or (iii) implied covenants of good faith and fair dealing.  Each of this Amendment and the Amended Guaranty is a legal, valid and binding obligation of the Sponsor, enforceable against the Sponsor in accordance with its terms, except to the extent that enforceability may be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights, (ii) the effect of general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) or (iii) implied covenants of good faith and fair dealing
3.Credit Agreement and Guaranty Representations and Warranties. Each of the representations and warranties set forth in the Credit Agreement (with respect to the Borrower) and the Guaranty (with respect to the Sponsor) is true and correct in all respects both before and after giving effect to this Amendment, except to the extent that any such representation and 
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warranty relates solely to any earlier date, in which case such representation and warranty is true and correct in all respects as of such earlier date.
4.Defaults. No event has occurred or is continuing as of the date hereof, or will result from the transactions contemplated hereby as of the date hereof, that would constitute an Event of Default or a Default.
VI.Limited Amendment.  Except as expressly set forth herein, this Amendment shall not, by implication or otherwise, limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders or the other Secured Parties under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other provision of the Credit Agreement or any other Loan Document, and each of the Borrower and the Sponsor acknowledges and agrees that each of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment.  From and after the Amendment Effective Date, all references to (i) the Credit Agreement in any Loan Document shall, unless expressly provided otherwise, refer to the Amended Credit Agreement and (ii) the Guaranty in any Loan Document shall, unless expressly provided otherwise, refer to the Amended Guaranty.  
VII.Miscellaneous.
1.Counterparts.  This Amendment may be executed in one or more duplicate counterparts and by facsimile or other electronic delivery and by different parties on different counterparts, each of which shall constitute an original, but all of which shall constitute a single document and when signed by all of the parties listed below shall constitute a single binding document.
2.Severability.  In case any one or more of the provisions contained in this Amendment should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
3.Governing Law, etc..  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK.  The provisions in Sections 12.08(b) through (d) and Section 12.09 of the Amended Credit Agreement shall apply, mutatis mutandis, to this Amendment and the parties hereto.
4.Loan Document.  This Amendment shall be deemed to be a Loan Document for all purposes of the Amended Credit Agreement and each other Loan Document.
5.Headings.  Paragraph headings have been inserted in this Amendment as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Amendment and shall not be used in the interpretation of any provision of this Amendment.
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6.Execution of Documents.  The undersigned Lenders hereby authorize and instruct the Administrative Agent to execute and deliver this Amendment.
[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written.
SUNRUN HERA PORTFOLIO 2015-A, LLC,
as Borrower
By:  Sunrun Hera Portfolio 2015-B, LLC
Its:   Sole Member
By:  Sunrun Hera Holdco 2015, LLC
Its:   Sole Member
By:  Sunrun Inc.
Its:   Sole Member

By: /s/ Tom vonReichbauer    
Name: Tom vonReichbauer
Title: Chief Financial Officer

SUNRUN INC.,
as Guarantor

By: /s/ Tom vonReichbauer    
Name: Tom vonReichbauer
Title: Chief Financial Officer

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

SUNRUN GAIA PORTFOLIO 2016-A, LLC,
as Lender

By:  Sunrun Gaia Holdco 2016, LLC
Its:   Sole Member
By:  Sunrun Inc.
Its:   Sole Member

By: /s/ Tom vonReichbauer    
Name: Tom vonReichbauer
Title: Chief Financial Officer

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

INVESTEC BANK PLC, 
as Administrative Agent

By: /s/ Olivier Fricot    
Name: Olivier Fricot
Title: Authorised Signatory

By: /s/ Andrew Nosworthy    
Name: Andrew Nosworthy
Title: Authorised Signatory

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

DEUTSCHE BANK AG, NEW YORK BRANCH, 
as Lender

By: /s/ Jeremy Eisman    
Name: Jeremy Eisman
Title: Managing Director

By: /s/ Kyle Hatzes    
Name: Kyle Hatzes
Title: Director

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

EAST WEST BANK, 
as Lender

By: /s/ Christopher Simeone    
Name: Christopher Simeone
Title: Senior Vice President

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

ING Capital LLC, 
as Lender

By: /s/ Henry Miller    
Name: Henry Miller
Title: Director

By: /s/ Thomas Cantello    
Name: Thomas Cantello
Title: Managing Director

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

SUNTRUST BANK, 
as Lender

By: /s/ Arize Agumadu    
Name: Arize Agumadu
Title: Director

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

SILICON VALLEY BANK, 
as Lender

By: /s/ Jamie Goh    
Name: Jamie Goh
Title: Vice President
[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]

ABN AMRO Capital USA LLC, 
as Lender

By: /s/ Amit Wynalda    
Name: Amit Wynalda
Title: Executive Director
By: /s/ Maria Fahey    
Name: Maria Fahey
Title: Director

[Signature Page to Consent and Tenth Amendment (2nd A&R AF Credit Agreement)]avlr-ex103_13.htm

 

Exhibit 10.3

 

	
 
	

	
 

 

2021 Executive and Leadership Bonus Plan

 

This 2021 Executive and Leadership Bonus Plan (the “Plan”) of Avalara, Inc. (the “Company”) covers the period from January 1, 2021 through December 31, 2021. The purpose of the Plan is to promote the success of the Company by rewarding leaders (“Leaders”) for outstanding business results, as well as promoting retention of high‐performing employees.

 

Performance bonuses are paid to our Leaders and are based on the achievement of (i) Company performance objectives and (ii) individual performance objectives that are determined by their managers; provided, however, that the Compensation and Leadership Development Committee (the “CLDC”) of the Board of Directors (the “Board”) shall approve the individual performance objectives applicable to the CEO. Each Leader’s performance objectives may change from year to year as the Company continues to evolve and different priorities are established and will remain subject to the review and approval of the CEO and/or the CLDC.

 

For 2021, performance bonuses may be earned under the Plan based on the attainment of a Company performance component and an individual performance component measured as of the end of calendar year 2021. Under the Plan, the Company performance component accounts for 80% of the total target performance bonus, and the individual performance component accounts for 20% of the total target performance bonus. The Plan details are as follows:

 

	
 
	
1.
	
Company Performance Component = 80%:

 

The Company performance component consists of four Company performance objectives, which may be earned, in whole or in part, based on actual performance compared to target and calculated on a sliding scale between 25% (threshold) and 200% (maximum). No amounts are earned if the actual performance compared to target is less than the threshold. Performance objectives for 2021 are as follows:

 

	
 
	
•
	
New & Upsell Bookings:

 

New and upsell bookings are an estimate of the one-year (12 month) value of a new signed contract to use our services, including subscriptions, new and upsell orders, signed statements of work, signed but estimated contract values, signed but estimated returns usage, billed usage, and collected usage overages, as approved by the CEO and/or CFO. Company bookings, including new and upsell bookings, are calculated, reconciled, and reported monthly by Finance.

 

	
 
	
•
	
Gross Margin (Non-GAAP):

 

Gross margin (non-GAAP) is defined as GAAP gross margin before the impact of stock-based compensation expense and the amortization of acquired intangibles included in cost of revenue as a percentage of revenue. Gross margin (non-GAAP) is calculated and reported quarterly by Finance in the Company’s financial statements as “Non-GAAP Gross Margin.”

 

	
 
	
•
	
Operating Loss (Non-GAAP):

 

Operating loss (non-GAAP) is defined as GAAP operating loss before stock-based compensation expense, amortization of acquired intangibles, and goodwill impairments. Operating loss (non-GAAP) is calculated and reported quarterly by Finance in the Company’s financial statements as “Non-GAAP Operating Income (Loss).”

 

	
 
	
•
	
CPO: 

 

CPO is an index that provides a snapshot of customers at risk, which is the risk we run in losing a 

 

 

customer or having an unhappy captive customer. In aggregate, it is a measure of the health of the customer. The index ranges between 0 to 100. A CPO of 0 reflects a happy customer, and a CPO of 100 is a cancelled customer.  There are two CPO-related performance objectives in the plan: Average 2021 CPO and Year‐end 2021 CPO.  Average CPO is calculated by taking the straight average of daily CPO measures throughout the year, while Year-end CPO is the value of the CPO index on December 31, 2021.

 

	
 
	
2.
	
Individual Performance Component (MBOs) = 20%:

 

The individual performance component is determined by a Leader’s attainment of goals and performance targets as established in the Leader’s 2021 Individual Goal Setting & Performance Review Plan. MBO attainment follows the performance rating guidelines below:

 

	
 
	
•
	
High Contributor – >100% (up to established cap)

	
 
	
•
	
Core Contributor – up to 100%

	
 
	
•
	
Low Contributor – up to 50%

 

	
 
	
3.
	
Accelerators:

 

For each accelerator target achieved, the acceleration percentage will be applied to the final Company performance component of the bonus. For example, if the Company performance component is calculated to be 120% and one accelerator target has been met (i.e., 15%), the final Company performance component would be 138%. Below is the list of 2021 accelerators:

 

	
 
	
•
	
15% Accelerator – Employee Engagement at or above target by December 31, 2021.
	
 

	
 
	
•
	
15% Accelerator – Net Revenue Retention with target to be determined on or before the Board meeting on July 27 – 28, 2021.
	
 

 

	
 
	
•
	
Engagement is measured by Gallup and typically reported a twice a year by Human Resources.
	
 

	
 
	
•
	
Net Revenue Retention (i.e., revenue in a quarter from billing accounts that generated revenue during the corresponding quarter of the prior year divided by revenue in such corresponding quarter from such billing accounts) as calculated and reported quarterly by Finance.

	
 
	
4.
	
Payout Schedule:

 

The 2021 bonus will be paid out on or before March 15, 2022 in the U.S. and on the last scheduled payroll in March 2022 in all other countries.

 

	
 
	
5.
	
Eligibility:

 

The Plan applies to Leaders at the VP level and above, as determined by the CEO. To qualify for the bonus payment under the Plan, a Leader must:

 

	
 
	
•
	
Be actively employed with the Company or its subsidiaries for a minimum of three (3) months from January 1, 2021 through December 31, 2021,

	
 
	
•
	
Be actively employed at the time the bonus is paid out, and

	
 
	
•
	
Have a final performance rating of “Core Contributor” or better.

 

	
 
	
6.
	
Eligible Earnings:

 

The bonus will be based on actual 2021 eligible earnings. Eligible earnings generally include all elements of base salary and hours worked including pay for regular hours worked, overtime, holidays, PTO, floating holidays, and sick time. Other bonus or incentive earnings, such as commissions, are not included in eligible earnings for Company bonus purposes.

 

	
 
	
7.
	
Terms and Conditions:

 

 

	
 
		

 

“Actively employed” means that the employee is a current employee of the Company.

 

The Company intends for the benefits provided under the Plan to comply with, or be exempt from, the requirements of Internal Revenue Code Section 409A, the state and federal Family Medical Leave Act, the Americans with Disabilities Act, USERRA, and all other applicable state and federal laws, and the Plan will be interpreted to that end. The Company reserves the right to amend the Plan as necessary to comply with applicable federal and state laws.

 

The CEO, with input from the CLDC, will approve the Company performance component achieved under the Plan and may make discretionary adjustments as he, in his sole discretion, deems appropriate; provided, however, that the CLDC will approve the Company performance component achieved with respect to participating Leaders who are Executive Officers of the Company, as specified by the Charter of the CLDC, and will approve all bonuses payable to such Executive Officers, including the CEO, under the Plan.

 

Performance bonuses made under the Plan are offered at the sole discretion of the Company. The Company reserves the right to change, modify, or eliminate any provision of the Plan at any time, without notice. The Plan is not intended as a contract or a contract of employment. All employment with the Company is “at will,” which means that the Company or an employee may terminate the employment relationship at any time, with or without cause, and with or without notice.

 

Questions regarding the Plan should be directed to the Chief Financial Officer or Chief People Officer. For further information on the Plan metrics, please see Exhibit A.

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