Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is made as of August 14, 2015, between Indoor Harvest, Corp., (the "Company") and John Choo (the "Executive").

1. Terms of Employment

(a) Position. Company hereby employs the Executive as President, and the Executive accepts such employment with Company subject to the terms and conditions of this Agreement.

(b) Duties. Executive shall have such duties and responsibilities as may be assigned by the Board of Directors not inconsistent with the position.

(c) Dedication. Executive shall devote his full business time and best efforts to the business and affairs of the Company.

(d) Performance. Executive shall faithfully and diligently perform Executive’s duties in conformity with the directions of the Company and serve the Company to the best of Executive’s abilities.

(e) Permitted Activities. Executive may:

(i)     serve on industry, trade, civic or charitable boards or committees;

(ii)    engage in charitable activities and community affairs; and

(iii)  manage personal investments, as long as such activities do not materially interfere with the performance of Executive's duties and responsibilities.

2. Compensation

(a) Base Salary

(i) Salary. Executive shall receive an annual base salary in the amount of $60,000 ("Base Salary").

(ii) Equity. Executive, or an entity controlled by the executive such that the executive is deemed the sole beneficial owner under SEC Rule 13d-3, shall receive a total of 355,060 shares of restricted common stock upon execution of this agreement.

(iii) Payment. The Base Salary shall be payable in accordance with the customary payroll practices of the Company, but in no event less frequently than monthly.

(iiii) Adjustments. The Base Salary may be increased, or decreased, from time to time during the term of this Agreement in the sole discretion of the Board of Directors based on the Company's ability to pay.

(b) Incentive Compensation. During the term of employment, the Executive shall be eligible to participate in any equity-based incentive compensation plan or program adopted by the Board of Directors.

 

3. Expenses

(a) Reimbursement. Company shall pay all reasonable travel, dining and other ordinary, necessary and reasonable business expenses incurred by the Executive in the performance of his duties under this Agreement, subject to budget and/or other limitations or conditions imposed by the Board of Directors.

(b) Substantiation. The Executive shall, as a condition of any such payment or reimbursement, submit verification, substantiation and documentation of the nature and amount of such expenses in accordance with the policies of Company from time to time.

4. Vacation.

(a) Entitlement. The Executive shall be entitled to two weeks (14 Days) of vacation leave each year during the term of this Agreement without any deduction in his compensation, and at such times within each year as the Executive may determine, taking into account Company's schedule and the Executive's duties relative thereto, such vacation leave which shall be forfeited at the end of each year if not fully utilized in that year.

(b) Vacation Benefits upon Termination. Upon the termination or expiration of the Executive's employment by Company under this Agreement, the Executive shall not be entitled to compensation for any unutilized vacation leave.

5. Representations and Warranties.

The Company and the Executive respectively represents and warrants to each other that each respectively is fully authorized and empowered to enter into the Agreement and that their entering into the Agreement and to each parties' knowledge the performance of their respective obligations under the Agreement will not violate any agreement between the Company or the Executive respectively and any other person, firm or organization or any law or governmental regulation.

6. Confidential Information

(a) Obligation. The Executive agrees to maintain the strict confidentiality of all Confidential Information during the term of this Agreement and thereafter.

(b) Scope. For purposes of this Agreement, "Confidential Information" shall mean all information and materials of Company, and all information and materials received by Company from third parties (including but not limited to affiliates, subsidiaries, chapters, and members of Company), which are not generally publicly available and all other information and materials which are of a proprietary or confidential nature, even if they are not marked as such.

(c) Survival. This provision shall survive the termination of this Agreement indefinitely.

7. Intellectual Property

(a) Ownership. Executive agrees that  all copyrights, trademarks, patents, and other intellectual property rights to works or marks arising in from or in connection with the Executive's employment by Company are "work made for hire" within the definition of Section 101 of the Copyright Act (17 U.S.C. 101) and shall remain the sole and exclusive property of Company.

 

(c) Assignment of Interest. To the extent any work product is not deemed to be a work made for hire within the definition of the Copyright Act, Executive with effect from creation of any and all work product, hereby assigns, and agrees to assign, to Company all right, title and interest in and to such work product, including but not limited to copyright, all rights subsumed thereunder, and all other intellectual property rights, including all extensions and renewals thereof.

(d) Moral Rights. Executive also agrees to waive any and all moral rights relating to the work product, including but not limited to, any and all rights of identification of authorship and any and all rights of approval, restriction or limitation on use, and subsequent modifications.

(e) Assistance. Executive further agrees to provide all assistance reasonably requested by Company, both during and subsequent to the Term of this Agreement, in the establishment, preservation and enforcement of Company's rights in the work product.

(f) Return of Property. Upon the termination of this Agreement, Executive agrees to deliver promptly to Company all printed, electronic, audio-visual, and other tangible manifestations of work product, including all originals and copies thereof.

8. Non-Solicitation.

During the term of this Agreement and for 5 years after any termination of this Agreement, Executive will not, without the prior written consent of the Company, either directly or indirectly, on Executives' own behalf or in the service or on behalf of others, solicit or attempt to solicit, divert or hire away any person employed by the Company, or any customer of the Company.

9. Non-Disparagement.

(a) Executive Obligation. Executive will not at any time, during or after the Term, disparage, defame or denigrate the reputation, character, image, products or services of the Company, or of any of its Affiliates, or, any of its or its Affiliate s directors, officers, stockholders, members, employees or agents.

(b) Company Obligation. The Company will not, except as may be required by law, issue any official press release or statement which is intended to disparage Executive.

10. Acknowledgement.

Executive expressly acknowledges that the covenants of this Agreement are supported by good and adequate consideration, and that such covenants are reasonable and necessary in terms of duration, scope and geographic area to protect the legitimate business interests of Company.

11. Term of Employment

(a) Initial Term. The term of the Executive's employment under this Agreement shall commence on the Effective Date and continue until August 14, 2016 (the "Term"), unless his employment is sooner terminated by the Board of Directors.

(b) Automatic Renewal. Commencing on August 14 and on each anniversary of that date thereafter, the Term shall be extended for an additional one year period, subject to non-renewal provisions herein.

 

(c) Notice Not to Renew. Either party may give notice of the intention not to extend the Term in writing at least 90 days prior to each such anniversary date.  Non-renewal may be without cause, and neither party shall have any claim against the other for non-renewal under this provision of the Agreement.

12. Termination of Employment

(a) Termination Upon Death. This Agreement shall terminate automatically upon the death of the Executive.

(b) Automatic Termination Upon Disability. This Agreement shall terminate automatically upon Total Disability of the Executive.

Total Disability. Total Disability means the Executive is unable to perform the duties set forth in this Agreement for a period of twelve consecutive weeks, or 90 cumulative business days in any 12-month period, as a result of physical or mental illness or loss of legal capacity.

(c) Termination Upon Retirement. The Executive may voluntarily terminate this Agreement at any time by reason of Retirement. 

Retirement. Retirement is the cessation by Executive of all full-time employment of any kind.

(d) Termination by the Company For Cause. The Company shall have the right to terminate Executive's employment under this Agreement at any time for Cause, which termination shall be effective immediately. Termination for "Cause" shall include termination for:

(i)      material breach of this Agreement by Executive;

(ii)    intentional nonperformance or misperformance of such duties, or refusal to abide by or comply with the reasonable directives of his superior officers, or the Corporation's policies and procedures;

(iii)   Executive's gross negligence in the performance of his material duties under this Agreement;

(iv)   Executive's willful dishonesty, fraud or misconduct with respect to the business or affairs of the Corporation, that in the reasonable judgment of the President and/or the Board of Directors materially and adversely affects the Corporation;

(v)     Executive's conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude; or

(vi)   the commission of any act in direct or indirect competition with or materially detrimental to the best interests of Corporation that is in breach of Executive s fiduciary duties of care, loyalty and good faith to Corporation.

Cause will not, however, include any actions or circumstances constituting Cause under (i) or (ii) above if Executive cures such actions or circumstances within 30 days of receipt of written notice from Corporation setting forth the actions or circumstances constituting Cause. In the event Executive's employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other benefits under this Agreement.

 

(e) Termination by the Company Without Cause. The Company may, upon a majority vote of the Board of Directors, terminate the Executive's employment under this Agreement without Cause at any time upon 90 days prior written notice to the Executive, and Executive shall have any right to a claim against the Company for termination under this provision of the Agreement.

 (f) Change in Control. For purposes of this Agreement, unless the Board determines otherwise, a Change of Control of the Company shall be deemed to have occurred at such time as:

(i)       any person (as the term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting securities of the Company representing more than 50% of the Company s outstanding voting securities or rights to acquire such securities except for any voting securities issued or purchased under any employee benefit plan of the Company or its subsidiaries; or

(ii)      any sale, lease, exchange or other transfer (in one transaction or a series of transactions) of all or substantially all of the assets of the Company; or

(iii)    a plan of liquidation of the Company or an agreement for the sale or liquidation of the Company is approved and completed; or

(iv)     the Board determines in its sole discretion that a Change in Control has occurred, whether or not any event described above has occurred or is contemplated.

13. Indemnification. 

The Company shall indemnify the Executive, to the maximum extent permitted by applicable law and by its certificate of incorporation, against all costs, charges and expenses incurred or sustained by the Executive in connection with any action, suit or proceeding to which he may be made a party by reason of being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company or any other corporation for which the Executive serves in good faith as an officer, director, or employee at the Company's request.

14. General Provisions

(a) Entire Agreement. This Agreement constitutes the entire agreement between the parties, and supersedes all prior agreements, representations and understandings of the parties, written or oral.

(b) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

(c) Amendement. This Agreement may be amended only by written agreement of the parties.

(d) Notices. All notices permitted or required under this Agreement shall be in writing and shall be delivered in person or mailed by first class, registered or certified mail, postage prepaid, to the address of the party specified in this Agreement or such other address as either party may specify in writing. Such notice shall be deemed to have been given upon receipt.

(e) Assignment. This Agreement shall not be assigned by either party without the consent of the other party.

(f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its conflict of laws rules.

(g) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed this 14th day of August, 2015.

 

	
EXECUTIVE

		
THE COMPANY

	
	 		 	
	
/s/ John Choo

		
/s/ Chad Sykes

	
	
Signature

		
Signature

	
	 		 	
	
Date:       8/14/2015

		
Date:         8/14/2015Exhibit 10.1

 

Execution Version

 

	

    	
Wells   Fargo Bank, N.A. 
    1000   Louisiana Street, 9th Floor
    Houston, Texas 77002
    	
 
    

 

August 12, 2015

 

LRR Energy, L.P.

1111 Bagby Street, Suite 4600
 Houston, Texas, 77002
 Attention: Mr. Jaime Casas

 

Re:          Consent Letter Agreement Regarding Declaration of Cash Distribution

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Credit Agreement, dated as of July 22, 2011, among LRE Operating, LLC (the “Borrower”), LRR Energy, L.P. (the “Parent”), the banks and financial institutions from time to time party thereto as lenders (the “Lenders”) and Wells Fargo Bank, National Association, as administrative agent for the Lenders (the “Administrative Agent”) (as amended prior to the date hereof, the “Credit Agreement”).  Capitalized terms used herein without definition shall have the meanings given to them in the Credit Agreement.

 

1.             Request for Consent.  The Borrower and the Parent have advised the Administrative Agent and the Lenders that the Parent has entered into that certain Purchase Agreement and Plan of Merger with Vanguard Natural Resources, LLC and the other Persons party thereto, dated as of April 20, 2015, in the form attached as Exhibit 2.1 to the Parent’s April 22, 2015 Form 8-K filed with the SEC (the “Merger Agreement”).  The Borrower and the Parent have further advised the Administrative Agent and the Lenders that (i) in connection with the Merger Agreement, the Parent desires to declare a cash distribution in an aggregate amount not to exceed $1,800,000, to be paid to its transfer agent for the benefit of the holders of its Equity Interests no sooner than one Business Day after the Closing Date (as defined in the Merger Agreement) (the “Distribution Declaration”) and (ii) the Parent is prohibited from announcing the Distribution Declaration under Section 9.04 of the Credit Agreement.  The Borrower and the Parent have requested that the Administrative Agent and the Lenders enter into this letter agreement (this “Letter Agreement”) to evidence the Lenders’ consent to the Parent announcing the Distribution Declaration on the terms and conditions set forth herein.

 

2.             Limited Consent. In reliance on the representations, warranties, covenants and agreements contained in this Letter Agreement, and notwithstanding anything in Section 9.04 of the Credit Agreement that may prohibit the Parent from announcing the Distribution Declaration, the Majority Lenders hereby consent to the Loan Parties announcing the Distribution Declaration, subject to the following terms and conditions:

 

(a)           the Distribution Declaration and all press releases and other documentation related thereto shall expressly provide that the payment of the distribution (i) is conditioned and contingent upon the consummation of the Transactions (as defined in the Merger Agreement) and the occurrence of the Closing Date including, without limitation, the indefeasible repayment in full, in cash, of all Indebtedness as defined in the Credit Agreement and the termination of the Credit Agreement and (ii) shall not be remitted to the Parent’s transfer agent for the benefit of the holders of its Equity Interests until at least one Business Day after the Closing Date;

 

 

(b)           prior to announcing the Distribution Declaration, the Parent shall not have (i) cancelled the September 10, 2015 special meeting of the holders of its Equity Interests announced in its July 13, 2015 Form 8-K filed with the SEC or (ii) delayed such special meeting to a date later than September 25, 2015, and announcing the Distribution Declaration shall not result in such a delay or cancellation;

 

(c)           at the time of the Distribution Declaration, the Merger Agreement shall be in full force and effect and shall not have been amended subsequent to the date hereof, and no action shall have been taken by any party thereto to terminate the Merger Agreement, and no public statement shall have been made by any party thereto that it intends to terminate the Merger Agreement;

 

(d)           the Distribution Declaration shall have been made in accordance with the terms hereof prior to the Outside Date (as defined in the Merger Agreement);

 

(e)           immediately before and after giving effect to the Distribution Declaration, no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing or would result therefrom; and

 

(f)            the Parent shall have provided evidence reasonably acceptable to the Administrative Agent that the Parent has satisfied any applicable requirements and/or obtained any required consents under the Merger Agreement in order to (i) enter into this Letter Agreement and/or (ii) announce the Distribution Declaration, including, without limitation, pursuant to Sections 4.1, 7.5 or 7.13 thereof.

 

For the avoidance of doubt, the Borrower and the Parent acknowledge and agree that (i) this Letter Agreement provides for a consent to the Distribution Declaration only, (ii) this Letter Agreement shall not be construed as a consent to the payment of the distribution described in the Distribution Declaration and (iii) the payment of the distribution described in the Distribution Declaration is not permitted by the Credit Agreement, including pursuant Section 9.04 thereof.

 

3.             Limitations on Consent.  Nothing contained herein shall be deemed a consent to, or waiver of, any other action or inaction of the Borrower, the Parent or any of the other Loan Parties which constitutes (or would constitute) a violation of any provision of the Credit Agreement or any other Loan Document, or which results (or would result) in a Default or Event of Default under the Credit Agreement or any other Loan Document.  The Administrative Agent and the Lenders shall have no obligation to grant any future waivers, consents or amendments with respect to the Credit Agreement or any other Loan Document.

 

4.             Representations and Warranties; Ratifications and Affirmations of the Loan Parties.  To induce the Lenders and the Administrative Agent to enter into this Letter Agreement, each Loan Party hereby represents and warrants to the Lenders and the Administrative Agent as follows:

 

(a)           Each representation and warranty of such Loan Party contained in the Credit Agreement and the other Loan Documents is true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case such representations and warranties shall continue to be true and correct in all material respects (except that any such representations and warranties that are qualified by materiality shall be true and correct in all respects) as of such specified earlier date.

 

(b)           No Default or Event of Default has occurred and is continuing, and no Borrowing Base Deficiency exists.

 

2

 

Each Loan Party (x) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, the Credit Agreement and the other Loan Documents to which it is a party and agrees that each of the Loan Documents to which it is a party remains in full force and effect and (y) acknowledges the validity, enforceability and binding effect against such Loan Party of the Credit Agreement and each other Loan Document to which such Loan Party is a party.

 

5.             Miscellaneous.

 

(a)           THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b)           The expense reimbursement and indemnification provisions of Section 12.03 of the Credit Agreement are hereby incorporated by reference and made a part hereof as if fully set forth herein.

 

(c)           This Letter Agreement may be executed in separate counterparts and delivery of an executed signature page hereof by facsimile or electronic mail shall be effective as delivery of manually executed counterpart hereof; however, no party shall be bound by this Letter Agreement unless and until a counterpart hereof has been executed by each Loan Party and a number of Lenders sufficient to constitute Majority Lenders.

 

(d)           This Letter Agreement constitutes a “Loan Document” as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto and thereto.

 

(e)           THIS LETTER AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

 

[Signature Pages Follow]

 

3

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, N.A.,
    
	
 
    	
 as Administrative Agent, Issuing Bank,   Swing Line Lender and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
Mathew   A. Turner
    
	
 
    	
Name:   
    	
Matthew   A Turner
    
	
 
    	
Title:   
    	
Vice   President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
Accepted   and Agreed to:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BORROWER:
    	
LRE   OPERATING, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jaime R. Casas
    
	
 
    	
Name:
    	
Jaime   R. Casas
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
PARENT:
    	
LRR   ENERGY, L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
LRE   GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jaime R. Casas
    
	
 
    	
Name:
    	
Jaime   R. Casas
    
	
 
    	
Title:
    	
Vice   President and Chief Financial Officer
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
LENDERS:
    	
BANK OF AMERICA,   N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Clayborne
    
	
 
    	
Name:   
    	
Michael   Clayborne
    
	
 
    	
Title:
    	
Vice   President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
 
    	
CITIBANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott Gilden
    
	
 
    	
Name:   
    	
Scott   Gilden
    
	
 
    	
Title:   
    	
Senior   Vice President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
 
    	
ROYAL BANK OF   CANADA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Evans Swann, Jr
    
	
 
    	
Name:   
    	
Evans   Swann, Jr
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
 
    	
COMERICA BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffery Treadway
    
	
 
    	
Name:   
    	
Jeffery   Treadway
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
 
    	
BARCLAYS BANK   PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mary Huang
    
	
 
    	
Name:   
    	
Mary   Huang
    
	
 
    	
Title:
    	
Assistant   Vice President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

 

 

	
 
    	
AMEGY BANK   NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   G. Scott Collins
    
	
 
    	
Name:   
    	
G.   Scott Collins
    
	
 
    	
Title:
    	
Senior   Vice President
    

 

[SIGNATURE PAGE TO LRE CONSENT LETTER AGREEMENT]

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