Document:

EX-10.1

 Exhibit 10.1 

 
 

 
 January 25, 2013 (Revised 2/26/13) 

BY HAND 
 Ms. Lauren A.
Farrell 
 78 Partridge Hill Rd. 

Braintree, MA 02184 
  

	 	RE:	Separation Agreement and General Release 

Dear Lauren: 
 This Confidential
Separation Agreement and General Release (the “Agreement”) sets forth and confirms the understanding between you and HeartWare, Inc. (together with its affiliates, “HeartWare”) relating to your separation from HeartWare. As used
in this Agreement, “HeartWare” includes HeartWare, its former and present owners, parents, stockholders, predecessors, successors, assigns, agents, directors, employees, officers, subsidiaries and all persons acting by, under, or in
concert with any of them. 
 The purpose of this Agreement is to establish an amicable arrangement for ending your employment
relationship with HeartWare, to permit you to receive severance pay benefits and to release HeartWare from any claims. As we have discussed, your employment with HeartWare will terminate on March 1, 2013 (“Termination Date”).
Between now and the Termination Date, it is our expectation that you use your best efforts to assist with transition services as reasonably requested. 
 Your right to receive the benefits described below is subject to your timely and effective signature and delivery of this Agreement, as well as a final release in the form attached hereto as Exhibit A
(“Final Release”). You will have at least twenty-one (21) calendar days from your receipt of this letter to consider whether to sign the Agreement. Once you have signed the Agreement, you will have a period of seven (7) calendar
days to revoke the Agreement, and it will not become effective until this revocation period has expired, without revocation. If you have not delivered to Marcie Cain, Vice President of Human Resources, both (a) a signed copy of this Agreement
by February 28, 2013 and (b) a signed Final Release on the Termination Date, your eligibility to receive the benefits described in Section 2 below will terminate. 

 

	 	1.	Employment Status, Final Payments and Benefit Eligibility. 

 The following will apply whether or not you sign this Agreement: 
  

	 	(a)	Your employment with HeartWare will end on the Termination Date. Your salary and benefits will cease as of that date, and any entitlement you had or might have had
under any HeartWare-provided benefit program will also end except as required by federal or state law or as otherwise described below. 

  

	 	(b)	You will be paid all wages earned but unpaid through the Termination Date. 

  
 FEBRUARY 26 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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	 	(c)	You will be paid your annual performance bonus for 2012 calendar year, to extent earned, on or about February 15, 2013. 

 

	 	(d)	You will be paid for all vacation time accrued and unused through the Termination Date. 

 

	 	(e)	You will continue to be covered by HeartWare medical plans (as currently elected) through March 31, 2013. Your rights under the federal law known as COBRA shall
attach on April 1, 2013 and will entitle you to participate in HeartWare’s medical plans, at your expense, with the same coverage that you are participating in as of your Termination Date, for a period of up to 18 months. You must
complete the COBRA enrollment documents in order to continue group medical plan coverage(s), and timely elected coverage will be retroactive to April 1, 2013.  

 

	 	(f)	You will be reimbursed for any business expenses incurred and approved through the Termination Date consistent with HeartWare policy, subject to the timely submission
of properly documented business expense reports. 

  

	 	(g)	After the Termination Date, you will not be entitled to participate further in any HeartWare benefit plans, except as noted above in paragraph (e) above,
and in paragraphs 2(b) and 2(e) below, if applicable. 

  

	 	2.	Consideration. Upon HeartWare’s timely receipt of the Agreement and Final Release signed by You, and your return of all HeartWare property as set forth in
Section 3 below (the first day after such conditions have been met on or following the Termination Date will be the “Effective Date”), the following will apply: 

 

	 	(a)	Severance Pay. HeartWare will pay you on HeartWare’s regular payroll schedule the gross amount of nine thousand four hundred and seven dollars and fifty six
cents ($9,407.56), which is equivalent to your regular base pay, for six (6) months (hereinafter the “Salary Continuation Period”). HeartWare may deduct from the salary continuation payments any required withholding taxes or
government payments. Notwithstanding any language to the contrary, no salary continuation payments shall be made until the first regularly scheduled payroll date following the Effective Date of this Agreement. 

 

	 	(b)	 Health Benefit Continuation. If you are eligible under COBRA to elect continued group health coverage (“Eligible”) and you timely
elect such coverage, then between April 1, 2013 and September 30, 2013, so long as (i) you remain Eligible and (ii) you are not entitled to participate in another employer’s group health plan (hereinafter, the
“Eligibility Period”), you will be entitled to participate in HeartWare’s group health plan to the same extent you were participating as of the Termination Date and HeartWare will be responsible for the payment of the entire premium
during the Eligibility Period. At the end of the Eligibility Period, HeartWare will no longer be obligated to pay premiums as described, and group health coverage will be continued

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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only to the extent required by COBRA and only to the extent that you timely pay the full premium amount required for continuation of group health coverage. You should consult the COBRA materials
that will be provided by HeartWare for details regarding your eligibility for, and election of, COBRA continuation coverage. 

  

	 	(c)	Outplacement Benefits. You will be provided with specified professional outplacement benefits with an outplacement provider selected by HeartWare, provided that
you begin outplacement services within four (4) weeks after the Termination Date. To the extent that you elect not to utilize outplacement services, you will not be entitled to the cash equivalent value of these services.

  

	 	(d)	Consulting Arrangement. You and HeartWare agree that you will provide consulting services to HeartWare during the period between March 2, 2013 and
December 31, 2013 (“Consulting Period”) on an as-needed basis when reasonably requested by the CEO or CFO of HeartWare, and reasonably agreed upon by you. You will provide consulting services at times and places mutually agreeable to
you and HeartWare, not to exceed twenty-five (25) hours per month. During the Salary Continuation Period you will not receive any further compensation or benefits for consulting services. Thereafter, for the remainder of the Consulting Period,
upon receipt of invoice for services delivered, HeartWare will pay you consulting fees at the rate of two-hundred dollars ($200) per hour for consulting services. 

 

	 	(e)	Equity. Any shares of restricted stock (“RSU’s) and options to purchase shares in HeartWare (“Option Shares”) granted to you by HeartWare
shall continue to vest through the Consulting Period. Upon the termination of the Consulting Period, any unvested RSUs and Option Shares shall terminate, and you will have thirty (30) days to exercise any vested Option Shares.

  

	 	3.	Return of Property. Subject to retaining, with HeartWare’s knowledge and agreement, the HeartWare property required for you to provide consulting services
during the Consulting Period, you agree that on or prior to the Termination Date you will have returned to HeartWare all HeartWare property in your possession or control, including but not limited to documents, tapes, notes, computer files,
equipment, customer lists and other information or materials (and all copies) which contain confidential information, as well as any laptop, cellular phone, or other equipment provided to you by HeartWare. 

 

	 	4.	Release. By signing below, you make the following promises to HeartWare in consideration for your receipt of benefits under this Agreement and the performance of
its terms and conditions. Specifically: 

  

	 	(a)	 You voluntarily, irrevocably, and unconditionally release and discharge HeartWare, and its former and present owners, parents, shareholders,
predecessors, successors, assigns, agents, directors, officers, employees, officers, subsidiaries, and affiliates, and all persons acting by, under, or in concert with any of them (collectively, “Releasees”) from any and all complaints,
claims, demands, contracts, liabilities, actions, causes of 

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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action, promises, or rights of any nature whether known or unknown and whether in law or in equity which you now own or hold or have at any time owned or held against Releasees arising out of or
in any way connected with your employment relationship with or separation from employment at HeartWare and any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, resulting from any act or
omission by or on the part of Releasees committed or omitted on or prior to the date you sign this Agreement. Without limiting the generality of the foregoing, this release includes all claims under any federal, state, or local law or regulation
dealing with employment, discrimination, and the payment of wages, including statutes such as federal and state wage and hour laws, federal and state whistleblower laws, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Lilly Ledbetter Fair Pay Act of 2009, the Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act (excluding COBRA), the Vietnam Era Veterans Readjustment Assistance Act, the
Fair Credit Reporting Act, the Age Discrimination in Employment Act (“ADEA”), the Older Workers’ Benefit Protection Act, the Occupational Safety and Health Act, the Sarbanes-Oxley Act of 2002, state and federal False Claims
Act, the Worker Adjustment and Retraining Act(WARN), Massachusetts General Laws c. 151B, Massachusetts General Laws c. 93, § 102, Massachusetts General Laws c. 12, §§ 11H and 11I, the Massachusetts Wage Act, and Massachusetts General
Laws c. 149, § 148, all as amended; as well as all claims arising from any contract, whether oral or written, express or implied; promissory estoppel; any tort, including, without limitation, assault, battery, defamation, misrepresentation,
intentional interference with contract; any claim for equity or other benefits; or any other statutory and/or common law claim. 

  

	 	(b)	You specifically and expressly acknowledge that this Agreement is intended to include and extinguish all claims, known and unknown, which exist up to and including the
date you sign this Agreement and which arise from your employment with or separation from employment at HeartWare and that no possible claim against Releasees would materially affect or change your complete and voluntary acceptance of this
Agreement, even if such claim were unknown at the time of signing of this Agreement and discovered after that signing. 

  

	 	(c)	 You represent and agree that (i) the payments and benefits set forth in this Agreement, together with payments and benefits HeartWare previously
provided to you, are complete payment, settlement, accord and satisfaction with respect to all obligations and liabilities of HeartWare to you, and with respect to all claims, causes of action and damages that could be asserted by you against the
Releasees regarding your employment with, change in employment status with, and/or termination from employment with HeartWare, including, without limitation, all claims for wages, salary, commissions, vacation pay, draws, car allowances, incentive
pay, bonuses, business expenses, paid time off, stock and stock options, severance pay, attorneys’ fees, compensatory damages, exemplary damages, or other compensation, benefits,

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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costs or sums; (ii) you have no known workplace injuries or occupational diseases and that you either have been provided or you have not been denied any leave requested under the Family and
Medical Leave Act; and (iii) you have not complained of and you are not aware of any fraudulent activity or any act(s) which would form the basis of a claim of fraudulent or illegal activity by the Releasees. 

 

	 	(d)	Notwithstanding anything to the contrary in this section 4, this release does not include the release of any rights that cannot by law be released by private agreement,
including but not limited to those relating to unemployment benefits or workers’ compensation benefits. Further, this release does not release claims to enforce the terms and conditions of this Agreement. 

 

	 	(e)	THIS RELEASE CONTAINS A WAIVER OF RIGHTS UNDER THE MASSACHUSETTS WAGE ACT: You acknowledge, agree and understand that employees have certain rights under the
Massachusetts Wage Act, M.G.L. chapter 149 et seq. (the “MA Wage Act”) regarding when, how, and how much they must be paid, including but not limited to the right to be paid wages earned within timeframes provided in the MA Wage Act; that
wages include amounts payable to employee for hours worked, which may include salaries, determined and due commissions, overtime pay, tips, and earned vacation or holiday payments due to employees under oral or written agreements; and that employees
have the right to bring private lawsuits for violation of the MA Wage Act. 

  

	 	(f)	HeartWare voluntarily, irrevocably, and unconditionally releases and discharges you from any and all complaints, claims, demands, contracts, liabilities, actions,
causes of action, promises, or rights of any nature whether known or unknown and whether in law or in equity which it now owns or holds or has at any time owned or held against you arising out of or in any way connected with your employment
relationship with or separation from employment at HeartWare and any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, resulting from any act or omission by or on the part of you committed
or omitted on or prior to the date you sign this Agreement; provided, however, nothing herein releases any claims by HeartWare against you for intentional wrongdoing and any such claims currently unknown. 

 

	 	5.	Waiver of Rights and Claims under the Age Discrimination in Employment Act of 1967. 

Because you are 40 years of age or older, you are being informed that you may have specific rights and/or claims under the Age
Discrimination in Employment Act of 1967 (ADEA), and by signing this Agreement: 
  

	 	(a)	you agree that in consideration for the payments described in paragraph 2 of this Agreement, which you are not otherwise entitled to receive, you specifically and
voluntarily waive such rights and/or claims under the ADEA you might have against Releasees to the extent such rights and/or claims arose through the date you sign this Agreement; 

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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	 	(b)	you acknowledge that you are hereby advised by HeartWare of your right to consult with an attorney prior to signing this Agreement, you have had the opportunity to
review and reflect on all terms of this Agreement, and you have not been subject to any undue or improper influence interfering with the exercise of your free will to sign this Agreement; 

 

	 	(c)	you further acknowledge that when HeartWare presented you with the original draft of this Agreement, you were informed that you had at least twenty-one
(21) calendar days within which to consider its terms and to consult with or seek advice from an attorney or any other person of your choosing, subject to the confidentiality provisions of Section 8(a) below; 

 

	 	(d)	you will have seven additional days after you sign this Agreement to revoke it, and this Agreement will not become effective or enforceable until this revocation period
has expired without your timely and proper revocation. If you choose to revoke this Agreement, you must contact Marcie Cain to advise her of your decision to revoke the Agreement. You must also send Ms. Cain written notice of your decision to
revoke the Agreement, which must be received by her within the seven-day revocation period. If the seven day revocation period ends on a weekend or holiday, the seven day revocation period will be extended to the next business day; and

  

	 	(e)	you agree that any changes, material or immaterial, to this Agreement will not restart the twenty-one day consideration period. 

 

	 	6.	Voluntary Assent. 

 You
affirm that no other promises or agreements of any kind have been made to or with you by any person or entity whatsoever to cause you to sign this Agreement, and that you fully understand the meaning and intent of this Agreement. You acknowledge
that you have been afforded a reasonable opportunity to fully discuss and review the terms of this Agreement with an attorney. You further represent that you have carefully read this Agreement, understand the contents herein, freely and voluntarily
assent to all of the terms and conditions hereof, and sign your name of your own free will. 
  

	 	7.	Future Conduct. 

  

	 	(a)	 You agree to keep the terms of this Agreement confidential and not to divulge the contents of this Agreement to any person other than to your immediate
family 

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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members and attorneys (so long as each such person agrees to be bound by the confidential nature of this Agreement), as required by court order or subpoena, or as necessary to complete tax
returns, until such time as HeartWare makes this Agreement or its contents public as it deems necessary to comply with its securities and other legal obligations. 

 

	 	(b)	You agree that neither you nor anyone acting at your request or on your behalf shall disparage, defame, criticize or comment in any negative manner on the business,
employment or personnel practices of HeartWare or any of its subsidiaries or affiliates, or any of its or their current, former or future officers, directors, shareholders, investors, employees, representatives, agents or attorneys, except if
testifying truthfully under oath pursuant to a lawful court order or subpoena. If you receive such a court order or subpoena, you or your attorney shall provide HeartWare with a copy of such court order or subpoena within two (2) business days
of your receipt of it and shall notify HeartWare of the content of any testimony or information to be provided and provide HeartWare with copies of all documents to be produced. HeartWare agrees that it will direct Peter McAree and Doug Godshall to
not disparage, defame, criticize or comment in any negative manner about you, except if testifying truthfully under oath pursuant to a lawful court order or subpoena. 

 

	 	(c)	You represent that no charges, complaints or actions of any kind have been filed by you or on your behalf against HeartWare with any federal, state or local court or
agency. Nothing in this Agreement shall bar or prohibit you from contacting, seeking assistance from or participating in any proceeding before any federal or state administrative agency to the extent permitted by applicable federal, state and/or
local law. However, you nevertheless will be prohibited to the fullest extent authorized by law from obtaining monetary damages in any agency proceeding in which you do so participate. 

 

	 	8.	Non-Solicitation; Non-Competition.  

 During the 12 months after your termination of employment, you acknowledge and agree that you shall not, directly or indirectly, on your own behalf or on behalf of any third party, without the express
written consent of HeartWare: 
  

	 	(a)	canvass, solicit, target, induce or entice or endeavor to solicit, target, induce or entice away from HeartWare, or attempt to divert, reduce or take away, the business
or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished or sold by HeartWare with which you were substantively involved during the course of your employment with HeartWare) of, of any of the
clients, customers, vendors, suppliers or accounts, or prospective clients, customers, suppliers, vendors or accounts of HeartWare that you contacted, solicited or served while employed by HeartWare or supplier to or in the habit of dealing with
HeartWare; 

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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	 	(b)	target, recruit, solicit, hire away, or otherwise interfere with the employment relationship of, or endeavor to entice away, any employee of HeartWare, or otherwise
induce any such employee to cease their relationship with HeartWare; or 

  

	 	(c)	become employed by, associated with or render services to Thoratec Corporation. 

 You understand, acknowledge and agree that the restrictive covenants contained in this Agreement are reasonable in scope and necessary to protect HeartWare and are supported by legitimate business
interests of HeartWare, including without limitation the protection of HeartWare’s trade secrets, confidential business information and goodwill. You further agree that in the event of your breach of this paragraph 8, HeartWare would suffer
substantial irreparable harm and that HeartWare would not have an adequate remedy at law for such breach. In recognition of the foregoing, you agree that in the event of a breach or threatened breach of any of these covenants, in addition to such
other remedies as HeartWare may have at law, without posting any bond or security, HeartWare shall be entitled to seek and obtain equitable relief, in the form of specific performance, or temporary, preliminary or permanent injunctive relief, or any
other equitable remedy which then may be available. 
  

	 	9.	Non-Disclosure of Confidential Information. 

 You acknowledge that your obligations under the “Proprietary Information, Confidentiality and Inventions Assignment Agreement” between you and HeartWare survive the termination of your
employment with HeartWare, apply to consulting services performed during the Consulting Period and are unaffected by this Agreement. 
  

	 	10.	Default. 

 You hereby
agree that, upon any breach or default by you in respect of your obligations under this Agreement, including without limitation, your obligations under Sections 3, 4, 5, 7, 8 and 9, HeartWare shall have the following rights and remedies (which shall
not be mutually exclusive), in addition to any other rights and remedies which may be available pursuant to other provisions of this Agreement or at law or in equity: 
  

	 	(a)	HeartWare shall not be required to make any additional payment of the severance benefits described under paragraph two (2) or fulfill its obligations under
paragraph two (2) of the Agreement. 

  

	 	(b)	HeartWare shall have the right and option to require you to reimburse HeartWare for the aggregate amount of all severance benefits previously paid to you pursuant to
paragraph two (2) of the Agreement, promptly following demand therefor to you. 

  

	 	(c)	HeartWare shall have the right and option to terminate the consulting arrangement described in paragraph two (2) of the Agreement. 

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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	 	11.	Representations and Governing Law. 

  

	 	(a)	You and HeartWare acknowledge that in executing this Agreement, neither party has relied on any statements, promises or representations made by the other party except
as specifically memorialized in this Agreement. This Agreement is the complete agreement of the parties on or in any way related to the subject matter addressed in the Agreement and your employment and separation from employment, and it supersedes
and cancels all other previous agreements or understandings between the parties, except for the Proprietary Information, Confidentiality and Inventions Assignment Agreement between you and HeartWare (“Confidentiality Agreement”), which
shall remain in full force and effect in accordance with its terms. This Agreement specifically incorporates the Confidentiality Agreement, and nothing herein precludes the continued enforcement of the Confidentiality Agreement. This Agreement
cannot be modified or rescinded except upon the written consent of both you and HeartWare. 

  

	 	(b)	If any provision of this Agreement is held to be unenforceable, such provision shall be considered to be distinct and severable from the other provisions of this
Agreement, and such unenforceability shall not affect the validity and enforceability of the remaining provisions. If any provision of this Agreement is held to be unenforceable as written but may be made enforceable by limitation, then such
provision shall be enforceable to the maximum extent permitted by applicable law. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the
parties. 

  

	 	(c)	You represent and warrant that you have the full power, capacity, and authority to enter into this Agreement and have not assigned, pledged, encumbered or in any manner
conveyed all or any portion of the potential claims covered by this Agreement. This Agreement cannot be assigned by you, and it shall be binding upon HeartWare’s successors and assigns. 

 

	 	(d)	The validity, performance and enforceability of this Agreement will be determined and governed by the laws of the Commonwealth of Massachusetts without regard to its
conflict of laws principles. 

  

	 	(e)	The existence and execution of this Agreement shall not be considered as an admission of any liability, violation, error or omission by you or HeartWare.

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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 If you agree to the foregoing, kindly sign and return the enclosed copy of this letter
to me on or before February 28, 2013. 
  

	
	Sincerely,
	
	 /s/ Marcie Cain
 Marcie Cain

	Vice President, Human Resources

 I REPRESENT THAT I (A) HAVE READ AND FULLY UNDERSTAND THE TERMS AND CONDITIONS OF THIS AGREEMENT;
(B) HAVE HAD SUFFICIENT TIME TO CONSIDER THE AGREEMENT; AND (C) AM VOLUNTARILY AND WILLINGLY SIGNING IT. 
  

							
	Agreed and accepted:	 		 		 	
				
	 /s/ Lauren A Farrell
 Lauren A Farrell
	 		 	         2/26/13

Date
	 	

 This paragraph only applies if you want to sign this Agreement prior to the full 21 day consideration period. By
initialing below, you acknowledge that you have consulted with an attorney regarding this Agreement or chosen not to consult with an attorney and have considered carefully every provision of this Agreement, and that after having engaged in those
actions, prefer to and have requested that you enter into this Agreement prior to the expiration of the twenty-one (21) calendar day period set forth above. 
  

									
		 	 /s/ LAF
 Initial
	 		 	         2/26/13

Date
	 	

  
 February 26, 2013 

			
	  
  
 Lauren A. Farrell
 January 25, 2013 (Revised 2/26/13)

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 GENERAL RELEASE AND WAIVER OF CLAIMS 

In consideration of my receipt of benefits described in the Separation Agreement and General Release between HeartWare,
Inc. (“HeartWare”) and me, I voluntarily, irrevocably, and unconditionally release and discharge HeartWare, and its former and present owners, parents, shareholders, predecessors, successors, assigns, agents, directors, officers,
employees, officers, subsidiaries, and affiliates, and all persons acting by, under, or in concert with any of them (collectively, “Releasees”) from any and all complaints, claims, demands, contracts, liabilities, actions, causes of
action, promises, or rights of any nature whether known or unknown and whether in law or in equity which I now own or hold or have at any time owned or held against Releasees arising out of or in any way connected with my employment relationship
with or separation from employment with HeartWare and any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, resulting from any act or omission by or on the part of Releasees committed or
omitted on or prior to the date I sign this Agreement. Without limiting the generality of the foregoing, this release includes all claims under any federal state, or local law or regulation dealing with employment, discrimination, and the payment of
wages, including statutes such as federal and state wage and hour laws, federal and state whistleblower laws, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Lilly Ledbetter Fair Pay Act of 2009, the Equal Pay Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act (excluding COBRA), the Vietnam Era Veterans Readjustment Assistance Act, the Fair Credit Reporting Act, the Age Discrimination in
Employment Act (“ADEA”), the Older Workers’ Benefit Protection Act, the Occupational Safety and Health Act, the Sarbanes-Oxley Act of 2002, state and federal False Claims Act, the Worker Adjustment and Retraining Act(WARN),
Massachusetts General Laws c. 151B, Massachusetts General Laws c. 93, § 102, Massachusetts General Laws c. 12, §§ 11H and 11I, the Massachusetts Wage Act, and Massachusetts General Laws c. 149, § 148, all as amended; as well as
all claims arising from any contract, whether oral or written, express or implied; promissory estoppel; any tort, including, without limitation, assault, battery, defamation, misrepresentation, intentional interference with contract; any claim for
equity or other benefits; or any other statutory and/or common law claim. 
 I REPRESENT THAT I (A) HAVE READ AND FULLY
UNDERSTAND THE TERMS AND CONDITIONS OF THIS GENERAL RELEASE AND WAIVER OF CLAIMS; (B) HAVE HAD SUFFICIENT TIME TO CONSIDER THE AGREEMENT; AND (C) AM VOLUNTARILY AND WILLINGLY SIGNING IT. 

Agreed and accepted: 
  

 

							
	 /s/ Lauren A Farrell

Lauren A Farrell
	 		 	         2/26/13

Date
	 	

  
 February 26, 2013EX-10.1

 Exhibit 10.1 
 EXECUTION VERSION 
 May 1, 2013 

JPMorgan Chase Bank, N.A. 
 2200 Ross Avenue,
Third Floor 
 Dallas, Texas 75201 

Attention: Kimberly A. Bourgeois 
  

			
	Re:	 	Fifteenth Amendment to Credit Agreement dated as of January 18, 2008 among Approach Resources Inc. (“Borrower”), JPMorgan Chase Bank, N.A. and the institutions named
therein (“Lenders”) and JPMorgan Chase Bank, N.A., as Agent (“Agent”)

 Ladies and Gentlemen: 
 Reference is hereby made to that certain Credit Agreement dated as of January 18, 2008 among Approach Resources Inc., a Delaware corporation (“Borrower”), JPMorgan Chase Bank, N.A., as
Agent (“Agent”), and the Lenders that are signatory parties hereto (the “Lenders”), as amended by amendments dated February 19, 2008, May 6, 2008, August 26, 2008, April 8,
2009, July 8, 2009, October 30, 2009, February 1, 2010, May 3, 2010, October 21, 2010, May 4, 2011, October 7, 2011, December 20, 2011, September 7, 2012, November 16, 2012 and as
of the date hereof (as amended, the “Loan Agreement”). All capitalized terms herein shall have the meanings ascribed to them in the Loan Agreement. 
 Pursuant to this Fifteenth Amendment (the “Amendment”), Agent, Lenders and Borrower agree, effective as of the date hereof, as follows: 

1. Increase to Borrowing Base and Commitment. As of the date hereof, the Borrowing Base and Commitment under the Loan Agreement
are increased to $315,000,000. 
 2. Amendments to Loan Agreement. Subject to the satisfaction or waiver in writing of
each condition precedent set forth in Section 3 of this Amendment, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Loan Agreement shall be amended in the manner provided in this
Section 2. 
 A. Definitions. Section 1 of the Loan Agreement is hereby amended to revise the
definitions of “Facility Amount”, “Maturity Date” and “Rate Management Transaction” as follows: 
 “Facility Amount shall mean $500,000,000.” 

“Maturity Date shall mean July 31, 2016.” 

 “Rate Management Transaction is hereby amended by adding the
following phrase to the end of section (i) thereto: 
 “......, including any agreement, contract or transaction that
constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act, and” 
 B.
Section 1 of the Loan Agreement is further amended by adding the following definitions thereto in alphabetical order: 
 “Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor statute.” 

“Designated Person means a person or entity: 
  

	 	(i)	listed in the annex to, or otherwise the subject of the provisions of, the Executive Order; 

 

	 	(ii)	named as a “Specially Designated National and Blocked Person” (“SDN”) on the most current list published by OFAC at its official website or any
replacement website or other replacement official publication of such list; or is otherwise the subject of any Sanctions Laws and Regulations; or 

  

	 	(iii)	in which an entity or person on the SDN List has 50% or greater ownership interest or that is otherwise controlled by an SDN.” 

“Excluded Swap Obligation means, with respect to Borrower and any Guarantor, any Swap Obligation if, and to the extent that,
all or a portion of the guarantee of Borrower or such Guarantor of, or the grant by Borrower or such Guarantor of a security interest or Lien to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of Borrower’s or such Guarantor’s failure for any reason to
constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of Borrower or such Guarantor or the grant of such security interest becomes or would become
effective with respect to such Swap Obligation or (b) in the case of a Swap Obligation subject to a clearing requirement pursuant to Section 2(h) of the Commodity Exchange Act (or any successor provision thereto), because Borrower or such
Guarantor is a “financial entity,” as defined in Section 2(h)(7)(C)(i) the Commodity Exchange Act (or any successor provision thereto), at the time the guarantee of Borrower or such Guarantor becomes or would become effective with
respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee
or security interest or Lien is or becomes illegal.” 

  
 2 

 “Executive Order means Executive Order No. 13224 on Terrorist Financings:
— Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism issued on 23rd September, 2001, as amended by Executive Order No. 13268 and as further amended after the date
hereof.” 
 “OFAC means the Office of Foreign Assets Control of the United States Department of the Treasury.

 “Qualified ECP Guarantor means, with respect to any Swap Obligation, Borrower and each Guarantor that has total
assets exceeding $10,000,000 at the time the relevant guaranty agreement of Borrower or such Guarantor or grant of the relevant security interest or Lien becomes or would become effective with respect to such Swap Obligation or such other Person as
constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into
a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.” 
 “Sanctions Laws and
Regulations means any sanctions, prohibitions or requirements imposed by any executive order (an “Executive Order”) or by any sanctions program administered by OFAC.” 

“Swap Obligation means with respect to Borrower or any Guarantor, any obligation to pay or perform under any agreement,
contract or transaction that constitutes a Rate Management Transaction.” 
 C. Guaranties. Section 6(c)
of the Loan Agreement is hereby deleted in its entirety and the following is substituted therefor: 
 “(c) Guarantors shall
unconditionally guarantee the obligations of Borrower under this Agreement, the Notes executed by Borrower and the Swap Obligations entered into between Borrower and the Secured Parties, pursuant to a guaranty agreement in form and substance
satisfactory to Agent; provided, however, that notwithstanding anything in this Agreement, any Collateral Document or any guaranty agreement to the contrary, no Guarantor shall guarantee (or grant a security interest or Lien to support, as
applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of Guarantor.” 

D. Commodity Exchange Act Keepwell Provision. The following is added as Section 6(d) to the Loan Agreement: 

“(d) Each Qualified ECP Guarantor hereby jointly, severally and absolutely, unconditionally and irrevocably undertakes to provide
such funds or other suppport as may be needed from time to time by Borrower and each other Guarantor to honor all of its obligations under its guaranty agreement with respect 

  
 3 

 
to Swap Obligations; provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 6(d) and its guaranty agreement for the maximum amount of such liability
that can be hererby incurred without rendering its obligations under this Section 6(d) or otherwise under its guaranty agreement voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater
amount. The obligations of each Qualified ECP Guarantor under this Section 6(d) shall remain in full force until such Qualfied ECP Guarantor’s guaranty obligations have been discharged. Each Qualified ECP Guarantor intends that this
Section 6(d) constitutes, and this Section 6(d) shall be deemed to constitute, a “keepwell, support or other agreement” for the benefit of Borrower and each other Guarantor for all purposes of Section 1a(18)(A)(v)(ii) of the
Commodity Exchange Act. The terms and provisions of this Section 6(d) are hereby incorporated by reference in the guaranty agreement of each Guarantor executed and delivered by such Guarantor pursuant to Section 6(c) above.”

 E. Representations and Warranties. Section 10 of the Loan Agreement is hereby amended to add the following
subsections: 
 “(z) None of Borrower or, to its knowledge, any of its directors or officers acting or benefiting in any
capacity in connection with the extension of credit, financial accommodation made available by any Lender or any other capital raising transaction involving any Lender or any of its parents, subsidiaries, or Affiliates is a Designated Person.”

 “(aa) Borrower is, and will continue to, maintain its status as a Qualified ECP Guarantor.” 

F. Negative Covenants. Section 13 of the Loan Agreement is hereby amended by adding the following subsections thereto:

 “(h)  (i) Borrower shall not, directly or indirectly, use the proceeds of the Commitment, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in any manner that would result in a violation of any Sanctions Laws and Regulations by any party to this Loan Agreement; and 

(ii) None of the funds or assets of Borrower or any Guarantor that are used to pay any amount due pursuant to this
Agreement or any of the other Loan Documents shall constitute funds obtained from transactions with or relating to Designated Persons or countries in violation of any Sanctions Laws and Regulations.” 

“(i) Borrower shall not permit any Guarantor that is not a Qualified ECP Guarantor to own, at any time, any Oil and Gas Properties
constituting oil and gas leases and other mineral interests evaluated by Lenders for purposes of establishing the Borrowing Base then in effect or any capital stock or other equity interest in any other Guarantor or Borrower. “ 

  
 4 

 G. Events of Default. Section 14 of the Loan Agreement is hereby amended
by adding the following sentence to the last paragraph thereof: 
 Notwithstanding the foregoing, amounts
received from Borrower or any Guarantor that is not an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder shall not be applied to any Excluded Swap Obligations (it being understood,
that in the event that any amount is applied to the Indebtedness other than Excluded Swap Obligations as a result of clause Fourth above, Agent shall make such adjustments as it determines are appropriate to distributions pursuant to clause
Fourth above from amounts received from “eligible contract participants” under the Commodity Exchange Act or any regulations promulgated thereunder to ensure, as nearly as possible, that the proportional aggregate recoveries with
respect to the Indebtedness described in clause Fourth above by the holders of any Excluded Swap Obligations are the same as the proportional aggregate recoveries with respect to other Indebtedness pursuant to clause Fourth above).

 H. Schedule I. Schedule I to the Loan Agreement is deleted and the Schedule I attached hereto is substituted therefor.

 3. Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following
conditions precedent, unless specifically waived in writing by Lenders: 
 (a) The Amendment. Borrower,
each Guarantor and each Lender shall have duly and validly executed and delivered this Amendment to Agent. 
 (b)
Replacement Notes. Borrower shall have duly and validly executed and delivered to each of the Lenders, if requested by such Lenders, replacement Notes, in the form of Exhibit “A” attached to the Loan Agreement reflecting the
percentage of each Lender’s Pro Rata Part of the Facility Amount. Promptly upon receipt of a replacement Note, each Lender shall deliver to Borrower all existing Notes held by each such Lender. 

(c) Fees. Borrower shall have paid to Agent the fees described in the fee letter dated May 1, 2013 between
Borrower and Agent. 
 (d) Opinion of Counsel. Borrower shall have delivered to Agent a written opinion
dated the date hereof from counsel for Borrower covering such matters relating to Borrower, Borrower’s authority, the enforceability of this Amendment, and such other matters reasonably requested by Agent. 

(e) Corporate/Partnership/Company Proceedings. All corporate, limited liability company and/or partnership
proceedings, taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Agent, and its legal counsel. 

  
 5 

 4. Ratification by Guarantors. Each Guarantor hereby ratifies and reaffirms all of
its obligations under its Guaranty Agreement (the “Guaranty”) of Borrower’s obligations under the Loan Agreement, as amended hereby. Each Guarantor also hereby agrees that nothing in this Amendment shall adversely affect any right or
remedy of Lenders under the Guaranty and that the execution and delivery of this Amendment shall in no way change or modify its obligations as guarantor under the Guaranty. Although each Guarantor has been informed by Borrower of the matters set
forth in this Amendment and such Guarantor has acknowledged and agreed to the same, such Guarantor understands that Agent has no duty to notify such Guarantor or to seek such Guarantor’s acknowledgment or agreement, and nothing contained herein
shall create such a duty as to any transaction hereafter. 
 5. Representations and Warranties. By executing this
Amendment, Borrower hereby represents, warrants and certifies to Lenders that, as of the date hereof, (a) there exists no Event of Default or events which, with notice or lapse of time, would constitute an Event of Default; (b) Borrower
has performed and complied with all agreements and conditions contained in the Loan Agreement or the other Loan Documents which are required to be performed or complied with by Borrower; and (c) the representations and warranties contained in
the Loan Agreement and the other Loan Documents are true in all material respects, with the same force and effect as though made on and as of the date hereof (except to the extent that such representations and warranties related solely to an earlier
date). 
 6. Confirmation and Ratification. Except as affected by the provisions set forth herein, the Loan Agreement
shall remain in full force and effect and is hereby ratified and confirmed by all parties. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy
of Lenders under the Loan Agreement or the other Loan Documents. 
 7. Reference to Loan Agreement. Each of the Loan
Agreement and the Loan Documents, and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are hereby amended
so that any reference in the Loan Agreement, the Loan Documents and such other documents to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby. 
 8. Multiple Counterparts. This Amendment may be executed in a number of identical separate counterparts, each of which for all purposes is to be deemed an original, but all of which shall
constitute, collectively, one agreement. No party to this Amendment shall be bound hereby until a counterpart of this Amendment has been executed by all parties hereto. Delivery of an executed counterpart of a signature page of this
agreement by facsimile or portable document format (“.pdf”) shall be effective as delivery of a manually executed counterpart of this agreement. 

  
 6 

 9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS. 
 10. Final Agreement. THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT ALL
PROMISSORY NOTES,ANY SEPARATE FEE LETTER AGREEMENT WITH RESPECT TO FEES PAYABLE TO AGENT AND ANY OTHER LOAN DOCUMENTS EXECUTED PURSUANT THERETO OR HERETO, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG ANY OF THE PARTIES. 
 Please signify your acceptance to the foregoing terms and provisions by executing a copy of this Amendment at the space provided below. 

[Signature Pages to Follow] 

  
 7 

 
			
	Very truly yours,
	
	BORROWER:
	
	 APPROACH RESOURCES INC.,
 a Delaware corporation

		
	By:	 	/s/ J. Ross Craft
		 	J. Ross Craft, President and Chief Executive Officer
	
	GUARANTORS:
	
	 APPROACH OIL & GAS INC.,
 a Delaware corporation

		
	By:	 	 /s/ J. Ross Craft

		 	J. Ross Craft, President and Chief Executive Officer
	
	 APPROACH RESOURCES I, LP,
 a Texas limited partnership

		
	By:	 	Approach Operating, LLC,
		 	 a Delaware limited liability company,
 its general partner

		
	By:	 	Approach Resources Inc.,
		 	a Delaware corporation,
		 	its sole member
		
	By:	 	 /s/ J. Ross Craft

		 	J. Ross Craft, President and Chief Executive Officer

 [Signature Page] 

 
			
	 APPROACH SERVICES, LLC,
 a Delaware limited liability company

		
	By:	 	 Approach Resources Inc.,
 a
Delaware corporation,
 its sole member

		
	By:	 	 /s/ J. Ross Craft

		 	J. Ross Craft, President and Chief Executive Officer
	
	 APPROACH MIDSTREAM HOLDINGS LLC,
 A Delaware limited liability company

		
	By:	 	Approach Resources Inc.,
		 	a Delaware corporation,
		 	its sole member
		
	By:	 	 /s/ J. Ross Craft

		 	J. Ross Craft, President and Chief Executive Officer

 [Signature Page] 

 ACCEPTED AND AGREED TO 

			
	effective as of the date and year
	first above written:
	
	AGENT:
	
	JPMORGAN CHASE BANK, N.A.
		
	By:	 	 /s/ David M. Morris

		 	David M. Morris, Authorized Officer
	
	LENDERS:
	
	JPMORGAN CHASE BANK, N.A.
		
	By:	 	 /s/ David M. Morris

		 	David M. Morris, Authorized Officer

 [Signature Page] 

			
	KEYBANK NATIONAL ASSOCIATION, Lender and Documentation Agent
		
	By:	 	 /s/ Chulley Bogle

	Name:	 	Chulley Bogle
	Title:	 	Vice President

 [Signature Page] 

 FROST BANK, formerly The Frost National Bank 

			
		
	By:	 	 /s/ Alex Zemkoski

	Name:	 	Alex Zemkoski
	Title:	 	Vice President

 [Signature Page] 

			
	ROYAL BANK OF CANADA
		
	By:	 	 /s/ Kristen Spivey

	Name:	 	Kristen Spivey
	Title:	 	Authorized Signatory

 [Signature Page] 

 WELLS FARGO BANK, N.A. 

			
	
		
	By:	 	 /s/ Thomas Martin

	Name:	 	Thomas Martin
	Title:	 	Director

 [Signature Page]

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