Document:

Exhibit 10.1

 

AMENDMENT NO. 1
 TO
 SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 8, 2016 (this “Amendment”), to that certain Second Amended and Restated Credit Agreement, dated as of March 31, 2015 (as amended, modified, restated or supplemented from time to time in accordance with its terms, the “Credit Agreement”), among United Rentals, Inc. (“Holdings”), United Rentals (North America), Inc. (the “Company”), the subsidiaries of the Company party thereto as U.S. Subsidiary Borrowers (together with the Company, each a “U.S. Borrower” and collectively, the “U.S. Borrowers”), United Rentals of Canada, Inc. (the “Canadian Borrower”), United Rentals Financing Limited Partnership (the “Specified Loan Borrower”; and together with the U.S. Borrowers and the Canadian Borrower, each a “Borrower” and collectively, the “Borrowers”), the other Guarantors party thereto, the financial institutions party thereto from time to time (the “Lenders”), Bank of America, N.A., as agent for the Lenders (in such capacity, together with any successor in such capacity, the “Agent”), and the other parties thereto.

 

WHEREAS, the Borrowers, Holdings, the other Guarantors, the Lenders, the Agent and certain other parties are party to the Credit Agreement; and

 

WHEREAS, the Borrowers have requested that the Lenders and the Agent agree to amend certain provisions of the Credit Agreement.

 

NOW, THEREFORE, subject to satisfaction of the conditions precedent set forth in Section 3 hereof, it is hereby agreed:

 

SECTION 1          CAPITALIZED TERMS.

 

1.1          Capitalized terms used herein and not defined herein shall have the respective meanings assigned to such terms in the Credit Agreement.

 

SECTION 2          AMENDMENTS TO THE CREDIT AGREEMENT.  Effective as of the Effective Date (as defined below), the Credit Agreement is hereby amended as follows:

 

2.1          The defined term “BA Rate” in Section 1.1 of the Credit Agreement is hereby amended by adding the following phrase immediately preceding the period at the end thereof:

 

“; provided, that in no event shall the BA Rate be less than zero”

 

2.2          The defined term “Maturity Date” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“Maturity Date” means June 8, 2021.

 

2.3          The following defined terms are hereby added to Section 1.1 of the Credit Agreement in the correct alphabetical order:

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

2.4          The defined term “Defaulting Lender” in Section 1.1 of the Credit Agreement is hereby amended by (a) deleting the word “or” at the end of sub-clause (iv) contained in clause (d) thereof and inserting a comma in lieu thereof, and (b) adding the following new sub-clause (vi) immediately preceding the proviso at the end of clause (d) thereof:

 

“or (vi) has become the subject of a Bail-in Action”

 

2.5          Article VI to the Credit Agreement is hereby amended by adding the following new Section 6.23 at the end thereof (and the table of contents to the Credit Agreement shall be updated accordingly):

 

“6.23      EU Bail-In.  Neither Holdings nor any other Obligor is an EEA Financial Institution.”

 

2.6          Section 13.15(d) of the Credit Agreement is hereby amended by amending and restating the second sentence thereof in its entirety to read as follows:

 

“Subject to Section 14.26, the rights and remedies against a Defaulting Lender under this Section 13.15 are in addition to other rights and remedies that the Borrowers, the Agent, the Letter of Credit Issuers, the U.S. Swingline Lender, the Canadian Swingline Lender and the non-Defaulting Lenders may have against such Defaulting Lender.

 

2

 

2.7          Article XIV to the Credit Agreement is hereby amended by adding the following new Section 14.26 at the end thereof (and the table of contents to the Credit Agreement shall be updated accordingly):

 

“14.26    Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)           the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

 

(b)           the effects of any Bail-in Action on any such liability, including, if applicable:

 

(i)            a reduction in full or in part or cancellation of any such liability;

 

(ii)           a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)          the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.”

 

SECTION 3          CONDITIONS PRECEDENT.

 

This Amendment shall become effective on the date (such date, the “Effective Date”) that the following conditions precedent shall have been satisfied in full, as reasonably determined by the Agent:

 

(a)           Counterparts of this Amendment duly executed by the Borrowers, the Guarantors, the Lenders and the Agent shall have been delivered to the Agent.

 

(b)           Counterparts of an amendment fee letter dated as of the date hereof (the “Amendment Fee Letter”) duly executed by the Borrowers, the Agent and Merrill Lynch, Pierce, Fenner & Smith Incorporated shall have been delivered to the Agent.

 

(c)           There shall exist no Default or Event of Default after giving effect to this Amendment.

 

(d)           The Agent shall have received payment of all fees and expenses owing (i) pursuant to Section 14.7 of the Credit Agreement in respect of this Amendment and (ii) pursuant to the Amendment Fee Letter.

 

3

 

SECTION 4          REPRESENTATIONS

 

4.1          Each of the Borrowers hereby represents and warrants that, both before and after giving effect to this Amendment, (a) the representations and warranties contained in the Credit Agreement and all other Loan Documents are correct in all material respects (and any representation or warranty that is qualified as to materiality or Material Adverse Effect is correct in all respects) on and as of the date hereof, other than any such representations and warranties which relate to a specified prior date and except to the extent the Agent and the Lenders have been notified in writing prior to the date hereof by the Borrowers that any representation or warranty is not correct in all material respects (or that any representation and warranty that is qualified as to materiality or Material Adverse Effect is not correct in all respects) and the Required Lenders have explicitly waived in writing compliance with such representation or warranty and (b) no event, act or condition has occurred and is continuing which constitutes a Default or an Event of Default.

 

SECTION 5          MISCELLANEOUS.

 

5.1          Except as herein expressly amended, nothing herein shall be deemed to be a waiver of or amendment to any covenant, provision or agreement contained in the Credit Agreement or any other Loan Document, and each Borrower and Guarantor hereby agrees that all of the covenants, provisions and agreements contained in the Credit Agreement and the other Loan Documents are hereby ratified and confirmed in all respects and shall remain in full force and effect in accordance with their respective terms.

 

5.2          Each of the Guarantors hereby consents to the terms and conditions of this Amendment and reaffirms its guaranty of all of the applicable Obligations.  Each Borrower and Guarantor hereby ratifies its grant of a security interest in the Collateral in which it has an interest to secure the payment of the applicable Obligations.

 

5.3          From and after the Effective Date, all references in the Credit Agreement to “this Agreement”, “hereof”, “herein”, and similar terms shall mean and refer to the Credit Agreement, as amended and modified by this Amendment, and all references in other documents to the Credit Agreement shall mean such agreement as amended and modified by this Amendment.  This Amendment constitutes a Loan Document.

 

5.4          This Amendment may be executed by the parties hereto individually or in combination, in one or more counterparts, each of which shall be an original and all of which shall constitute one and the same agreement.

 

5.5          Delivery of an executed counterpart of a signature page by telecopier or electronic transmission in pdf format shall be effective as delivery of a manually executed counterpart.

 

5.6          THIS AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

 

5.7          The parties hereto shall, at any time and from time to time following the execution of this Amendment, execute and deliver all such further instruments and take all such further action as may be reasonably necessary or appropriate in order to carry out the provisions of this Amendment.

 

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[Remainder of page intentionally left blank]

 

5

 

IN WITNESS WHEREOF, the parties have entered into this Amendment on the date first above written.

 

	
 
    	
HOLDINGS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNITED   RENTALS, INC., as a Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Senior Vice   President and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BORROWERS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
UNITED RENTALS (NORTH   AMERICA), INC., and
   as a Guarantor
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Senior Vice   President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNITED RENTALS OF   CANADA, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Senior Vice   President and Treasurer
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

	
 
    	
 
    
	
 
    	
UNITED RENTALS FINANCING LIMITED 
   PARTNERSHIP, and as a Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
GUARANTORS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNITED RENTALS HIGHWAY   TECHNOLOGIES 
   GULF, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
UNITED RENTALS   (DELAWARE), INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
UNITED RENTALS REALTY,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
UNITED RENTALS OF NOVA   SCOTIA (NO. 1), ULC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
UNITED RENTALS OF NOVA   SCOTIA (NO. 2), ULC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
UR CANADIAN FINANCING   PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By its   Managing Partner, UNITED RENTALS FINANCING LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Irene Moshouris
    
	
 
    	
 
    	
Name: Irene Moshouris
    
	
 
    	
 
    	
Title: Vice President   and Treasurer
    

 

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as the Agent, a Lender, U.S. Swingline Lender and U.S. Letter of Credit   Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Cynthia G. Stannard
    
	
 
    	
 
    	
Name: Cynthia G.   Stannard
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
BANK OF AMERICA, N.A.   (acting through its Canada branch), as the Agent (as applicable), a Lender,   Canadian Swingline Lender and Canadian Letter of Credit Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sylwia Durkiewicz
    
	
 
    	
 
    	
Name: Sylwia Durkiewicz
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
WELLS FARGO CAPITAL   FINANCE, LLC,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Greg Feldmus
    
	
 
    	
 
    	
Name: Greg Feldmus
    
	
 
    	
 
    	
Title: Duly Authorized   Signer 
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
WELLS FARGO CAPITAL   FINANCE CORPORATION CANADA, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David G. Phillips
    
	
 
    	
 
    	
Name: David G. Phillips
    
	
 
    	
 
    	
Title: Senior Vice   President
           Credit Officer, Canada
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
CITIBANK, N.A.,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Christopher Marino
    
	
 
    	
 
    	
Name: Christopher   Marino
    
	
 
    	
 
    	
Title: Director and   Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
MORGAN STANLEY SENIOR   FUNDING INC.,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael King
    
	
 
    	
 
    	
Name: Michael King
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
MORGAN STANLEY BANK,   N.A., as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael King
    
	
 
    	
 
    	
Name: Michael King
    
	
 
    	
 
    	
Title: Authorized   Signatory
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
THE BANK OF NOVA   SCOTIA, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael Grad
    
	
 
    	
 
    	
Name: Michael Grad
    
	
 
    	
 
    	
Title: Director
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
MUFG UNION BANK, NATIONAL   ASSOCIATION, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Steven A. Narsutis
    
	
 
    	
 
    	
Name: Steven A. Narsutis
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
UNION BANK, CANADA   BRANCH, as a Lender 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Anne Collins
    
	
 
    	
 
    	
Name: Anne Collins
    
	
 
    	
 
    	
Title: Director
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
BARCLAYS BANK PLC, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ronnie Glenn
    
	
 
    	
 
    	
Name: Ronnie Glenn
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
JP MORGAN CHASE BANK,   N.A., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Salvatore P. Demma
    
	
 
    	
 
    	
Name: Salvatore P.   Demma
    
	
 
    	
 
    	
Title: Authorized   Officer
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
JP MORGAN CHASE BANK,   N.A., TORONTO
   BRANCH, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael N. Tam
    
	
 
    	
 
    	
Name: Michael N. Tam
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
DEUTSCHE BANK AG NEW YORK   BRANCH,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael Shannon
    
	
 
    	
 
    	
Name: Michael Shannon
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Benjamin Souh
    
	
 
    	
 
    	
Name: Benjamin Souh
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
SUNTRUST BANK, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Anh Nguyen
    
	
 
    	
 
    	
Name: Anh Nguyen
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
BANK OF MONTREAL   CHICAGO BRANCH, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jason Hoefler
    
	
 
    	
 
    	
Name:  Jason Hoefler
    
	
 
    	
 
    	
Title: Director
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
BANK OF MONTREAL TORONTO   BRANCH, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Graham
    
	
 
    	
 
    	
Name: David Graham
    
	
 
    	
 
    	
Title: Director Credit   Structuring
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

 

	
 
    	
PNC BANK, NATIONAL   ASSOCIATION., as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Alex M. Council 
    
	
 
    	
 
    	
Name: Alex M. Council
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
ROYAL BANK OF CANADA,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ A. Chaykoski
    
	
 
    	
 
    	
Name: A. Chaykoski
    
	
 
    	
 
    	
Title: Attroney in Fact
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ G. Lee
    
	
 
    	
 
    	
Name: G. Lee
    
	
 
    	
 
    	
Title: Attorney in Fact
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
TD BANK, N.A., as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ed Kahn
    
	
 
    	
 
    	
Name: Ed Kahn
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
REGIONS BANK, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kevin R. Rogers
    
	
 
    	
 
    	
Name: Kevin R. Rogers
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

	
 
    	
NYCB SPECIALTY FINANCE   COMPANY, LLC, a wholly owned subsidiary of NEW YORK COMMUNITY BANK, as a   Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William D.   Dickerson, Jr.
    
	
 
    	
 
    	
Name: William D.   Dickerson, Jr.
    
	
 
    	
 
    	
Title: Senior Vice   President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]

 

 

 

	
 
    	
ROCKLAND TRUST COMPANY,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew D. Wierman 
    
	
 
    	
 
    	
Name: Andrew D. Wierman   
    
	
 
    	
 
    	
Title: Vice President
    

 

[Amendment No. 1 to Second Amended and Restated Credit Agreement]Exhibit 10.1

 

NorthStar Asset Management Group, Inc.

 

June 2, 2016

 

Debra Hess

c/o NorthStar Asset Management Group Inc.

399 Park Avenue, 18th Floor

New York, NY  10022

 

Dear Debra:

 

Reference is made to the transactions contemplated by that certain Agreement and Plans of Merger by and among NorthStar Asset Management Group, Inc. (“NSAM”), Colony Capital, Inc. (“Colony”), NorthStar Realty Finance Corp. (“NRF”), New Polaris, Inc. (“New Polaris”)  and other signatories thereto (the “Merger Agreement”), to be executed concurrently with this letter agreement, pursuant to which the parties to the Merger Agreement and certain of their subsidiaries will combine in multiple steps and New Polaris will be the surviving parent company (the “Combination”).  The parties acknowledge that in the event that the Combination is not consummated or the Merger Agreement is terminated by its terms, this letter agreement will become null and void ab initio and of no further force and effect and your Executive Employment Agreement, by and among you and NSAM and NRF, dated as of June 30, 2014 (the “Employment Agreement”) will continue to govern the terms of your employment on the presently existing terms.

 

Following the Closing Date (as defined in the Merger Agreement), you will provide transition services reasonably assigned to you by New Polaris or a subsidiary or affiliate thereof relating to your prior role at NSAM on a short term basis for up to one year following the Closing Date and while you are providing such services you will report to the Chief Financial Officer of New Polaris, you will receive an annual base salary equal to $1.00, you will no longer be eligible for an Annual Cash Bonus (as defined in the Employment Agreement), and you will not be eligible to receive a bonus for 2017.  In connection with these agreed upon changes to your roles, duties, responsibilities, reporting obligations and compensation following the Closing Date and in consideration for the benefits set forth below, you agree that, as of and effective upon the Closing (as defined in the Merger Agreement), you waive any and all rights to resign from New Polaris (or any subsidiary, affiliate or successor entity of New Polaris) for Good Reason (as defined in the Employment Agreement) or otherwise claim breach of the Employment Agreement or any other agreement solely as a result of any changes to your compensation, benefits, duties, responsibilities or reporting obligations relating to the Combination as described in this letter agreement.  Prior to the Closing Date, your Employment Agreement will remain in full force and effect as presently exists without any amendment pursuant to this letter agreement.  For the avoidance of doubt, you shall retain the Good Reason protections set forth in the Employment Agreement based on your post-Closing Date employment (e.g., your position, duties and reporting set forth in this letter agreement shall be substituted for the title references in Section 4(d)(i) of the Employment Agreement and the duties, title(s), position(s), status, reporting relationship, authority and responsibilities references in Section 4(d)(ii) of the Employment Agreement, the compensation terms set forth in this letter

 

 

agreement shall be substituted for any references to “Base Salary” or other compensation set forth in Section 4(d)(iii) of the Employment Agreement and the references to locations set forth in this letter agreement shall be substituted for any references to locations in Section 4(d)(iv) of the Employment Agreement and any material breach of this letter agreement by New Polaris or its affiliates shall constitute Good Reason); provided, however, that none of the changes to your employment arrangements expressly contemplated by the waivers or other terms or arrangements of this letter agreement shall constitute Good Reason and your only entitlements upon a termination by you with Good Reason following the Closing Date (as defined in the Employment Agreement after taking into account the waiver set forth above) shall be as provided for in this letter agreement.

 

In consideration for the foregoing and other good and valuable consideration, including the benefits described below, you agree that, as of the Closing Date, you waive your right to any severance payments (including any and all rights to a prorated annual bonus with respect to 2017 upon the Closing) and benefits and any other consideration pursuant to Section 6 of the Employment Agreement (other than as provided in this letter agreement) and any other severance amounts that you may be eligible for under any other presently existing plans or arrangements with NSAM or NRF or any of their respective subsidiaries or affiliates; provided, however, that if New Polaris terminates your employment without Cause (as defined in the Employment Agreement) or your employment terminates with Good Reason (which, solely for purposes of this proviso, shall be as amended above, but shall also include any termination by you of your employment on or after the first anniversary of the Closing Date) following the Closing Date you will receive a payment equal to one week of base salary if you hold any performance-based equity awards that are payable in shares of NorthStar Realty Europe Corp. (“NRE”) as of the date of such termination.  Similarly, each of such entities and New Polaris agree that no compensation paid to you shall be subject to disgorgement in the absence of your fraud or willful misconduct or as otherwise required by applicable law or any NSAM plan or policy in effect on the date hereof.  Subject to your continued employment with NSAM or one of its subsidiaries through the Closing and in replacement of the severance payments and benefits that you would have otherwise become eligible to receive pursuant to Section 6 of the Employment Agreement and any other severance you may otherwise be eligible to receive from NSAM or NRF or any of their respective subsidiaries or affiliates, subject to the Closing, New Polaris will grant to you, as soon as practicable following the Closing Date (and in any event within 15 days following the Closing Date), restricted stock units (“RSUs”) with respect to the number of shares of New Polaris Class A common stock (“Shares”), determined pursuant to the last sentence of this paragraph (the “Replacement Award”) and the parties hereto agree that the grant of such RSUs is intended to be exempt for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  Notwithstanding the foregoing, you may elect to have the Replacement Award granted in the form of restricted Shares rather than RSUs, provided that you make such election in writing on or before the Closing Date and deliver such election to the General Counsel of New Polaris.  The Replacement Award will vest (and, if granted in the form of RSUs, settle in Shares) on the first anniversary of the Closing Date and such Shares shall be registered and freely tradeable, subject to your continued employment with New Polaris or one of its subsidiaries through the Vesting Date (as defined below); provided, however that if your employment is terminated prior to the Vesting Date (including a termination prior to the grant of the Replacement Award) by New Polaris without Cause or you resign with

 

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Good Reason (as defined in the Employment Agreement after taking into account the waiver set forth above), or if your employment terminates as a result of your death or Disability (as defined in the Employment Agreement), your Replacement Award will immediately vest (the date that the Replacement Award vests in accordance with this sentence, (the “Vesting Date”)). For the avoidance of doubt, in respect of your Replacement Award you shall be permitted to elect net share withholding in order to satisfy any applicable withholding requirements. Furthermore it is agreed that you shall not be terminated for Cause other than pursuant to a resolution adopted by not less than 3⁄4 of the board of directors of New Polaris (excluding you, if applicable) after you have been given the reasonable opportunity to be heard by the board of directors with your counsel present if you so elect.  For so long as the Replacement Award remains outstanding, you will be entitled to receive any dividends (or, if the Replacement Award is granted in the form of RSUs, dividend equivalent payments in the same amount as you would have if you held the number of Shares underlying the Replacement Award) declared and paid after the Closing Date, with such dividends or dividend equivalent amounts to be paid at the same time as such dividends are paid to the stockholders of New Polaris.  For the avoidance of doubt, to the extent that any dividends are declared and paid following the Closing Date with respect to Shares prior to the grant of the Replacement Award, you will also receive payment of such dividends as if the Replacement Award had been granted and outstanding on such date.  The number of Shares subject to the Replacement Award will be determined by dividing (i) $8,622,725 by (ii) the volume weighted average price of a Share over the first five trading days immediately following the Closing Date.

 

Furthermore, the parties agree that, in connection with the Closing, all of your performance-based equity awards with a performance period ending in 2017 or thereafter granted (or to be granted pursuant to the 2016 Bonus Award Notice (as defined below) or, if applicable, an alternative bonus award provided pursuant to Section 4 of the 2016 Bonus Award Notice) by (i) NSAM, (ii) NRF or (iii) NRE pursuant to its obligations under the Asset Management Agreement, dated as of October 31, 2015, between NRE and a subsidiary of NSAM and in connection with awards issued by NRF prior to the NRE spin-off (with each such grant set forth on Annex A hereto) (the “Performance Awards”) will be amended effective as of immediately prior to Closing to provide that the number of shares subject to the Performance Awards (whether NSAM shares, NRF shares or NRE shares) that would otherwise vest and/or be issuable upon the Closing will be the number of shares of NSAM, NRF and NRE, as applicable, set forth on Annex A beside the applicable Performance Award, and all other Performance Awards granted to you shall be forfeited.  For the avoidance of doubt, there shall be no payment of accumulated dividend amounts relating to the portion of any Performance Award that  is forfeited pursuant to the preceding sentence, and such dividend equivalent amounts shall be immediately forfeited for no consideration, and accumulated dividend amounts on that portion of the Performance Awards that vest and are not forfeited shall be paid to you as soon as practicable following the Closing Date.  Notwithstanding anything to the contrary set forth above, the number of shares of NSAM common stock and NRF common stock relating to equity awards to be issued as Long-Term Bonus (as defined in the 2016 Plan Year Bonus Award Notice under the NSAM Executive Incentive Bonus Plan dated March 23, 2016 (the “2016 Bonus Award Notice”)), including the Performance Awards and the time-based equity awards to be granted prior to the Closing Date relating to 2016 (based on the Long-Term Bonus Pool (as defined in the 2016 Bonus Award Notice)) shall be (i) 1,520,000 shares of NSAM common stock and (ii)

 

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1,064,300 shares of NRF common stock (in each case, in the aggregate), with such number of shares calculated based on the projections relating to 2016 performance as estimated by NSAM and provided to the Special Committee of NSAM’s Board of Directors prior to the date hereof and the applicable per share closing prices for NSAM and NRF common stock on May 27, 2016, and not based on NSAM’s actual performance through the end of the applicable performance period and there shall be no negative discretion adjustment applied to such awards.  For the avoidance of doubt, the foregoing sentence shall not impact the obligation to issue shares of NRE common stock to you as Long-Term Bonus pursuant to the 2016 Bonus Awards Notice in accordance with its terms.  Additionally, your annual cash bonus with respect to 2016 shall be paid in accordance with Section 6.11(c) of the Merger Agreement and such annual cash bonus shall be calculated assuming a Cash Bonus Pool (as defined in the 2016 Bonus Award Notice) equal to $30,292,804, which is calculated based on the projections relating to 2016 performance as estimated by NSAM and provided to the Special Committee of NSAM’s Board of Directors prior to the date hereof and not based on NSAM’s actual performance through the end of the applicable performance period and there shall be no negative discretion adjustment applied to such awards.  For the avoidance of doubt, your time-based equity awards in NSAM, NRF and NRE shall vest in accordance with their existing terms, including any accelerated vesting on a Change of Control, NSAM Change of Control or NRF Change of Control and, to the extent permitted by the applicable equity plan, you shall be permitted to elect net share withholding in order to satisfy any applicable withholding requirements.  For the avoidance of doubt, from and after the Closing Date, you shall continue to be eligible to vest, in accordance with their terms, in your outstanding performance-based equity awards payable in NRE shares granted in connection with the spin-off of NRE that do not accelerate and are not forfeited in connection with the Combination.

 

The parties agree that, subject to your continued employment with NSAM or one of its subsidiaries through the Closing Date, from and after the Closing Date, New Polaris will continue the Employment Agreement and the Employment Agreement and all of its terms will continue to be in full force and effect, subject to your waiver and the amendment of Sections 2(b), 2(c), 2(d), 3(a), 4(d) and 6 (excluding Section 6(d)) of the Employment Agreement; the parties also agree that the one year non-compete period set forth in Section 7(b) of the Employment Agreement shall apply to you following any termination of your employment but, such period shall commence on the Closing Date and continue until the 12 month anniversary of the Closing Date.  For avoidance of doubt, from and after the Closing Date, Sections 2(a), 2(b), 2(c), 2(d), 3(a), 6(a), 6(b) and 6(c) of the Employment Agreement will be deleted and of no further force and effect.

 

As described in Section 6(d)(iii) of the Employment Agreement, you will be provided with detailed calculations with respect to any excise tax imposed pursuant to Section 280G of the Code in connection with the Combination and you and NSAM agree to coordinate on efforts to mitigate the effects of Section 280G of the Code.  You will have an opportunity to review and comment on such calculations before such calculations are finalized and the valuation of the non-competition obligations for purposes of such calculations shall be performed in a manner substantially consistent with the preliminary valuation performed by Appraisal Economics, Inc. in connection with the Combination and previously provided to NSAM and Colony, unless otherwise required by the independent auditors of New Polaris.

 

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For the avoidance of doubt, (i) you will continue to be provided benefits pursuant to Section 2(g) of the Employment Agreement, except that the plans of New Polaris will be substituted for the plans of NSAM and (ii) New Polaris shall provide you with indemnification and director and officer insurance pursuant to Section 2(f) of the Employment Agreement that in each case is the same as the protection and insurance available to New Polaris’s officers and directors, including the Executive Chairman, from time to time following the Closing.  You acknowledge that you understand that the waivers and other provisions set forth in this letter agreement amend the Employment Agreement and the other plans and agreements (including any applicable equity award agreements or bonus award notices) under which you have rights and obligations and satisfy any requirements for you to approve and agree to any amendment or modification to the Employment Agreement and other plans and agreements (including any applicable equity award agreements or bonus award notices).  You further acknowledge that: (i) this letter agreement is executed voluntarily and without any duress or undue influence on the part or on behalf of NSAM or any of its affiliates; (ii) this entire letter agreement is written in a manner calculated to be understood by you; and (iii) you are fully aware of the legal and binding effect of this letter agreement.

 

In the event that New Polaris fails to grant the Replacement Award, pay accumulated dividends or vest any equity awards each in accordance with the terms hereof, and such breach continues after fifteen (15) days written notice and an opportunity to cure, then the forfeiture of amounts hereunder that would have been payable to you as a result of a termination without Cause immediately upon a Change of Control in accordance with the terms of the Employment Agreement as in effect prior to this letter agreement shall immediately be reinstated and payable to you, in addition to any other rights and remedies you may have in law or in equity.

 

The foregoing represents a legally binding commitment of the parties hereto. The parties may finalize additional documentation in forms to be mutually agreed to reflect the above; provided, however, that if no additional documentation with respect to the matters set forth herein is entered into, this letter agreement shall continue in full force and effect. It is expected that following the date of this letter agreement and prior to the Closing Date you will enter into an employment or consulting agreement with New Polaris on mutually agreeable terms governing the terms of your post-Closing Date service, including your location, pursuant to which you will provide transition services reasonably assigned to you by New Polaris relating to your prior role at NSAM on a short-term basis for up to one year following the Closing Date.  Should New Polaris determine at any time to terminate your service, you and New Polaris agree to provide each other a mutual general release of claims in such form as reasonably requested by New Polaris.  For the avoidance of doubt, in the event that you and New Polaris do not enter into such an employment or consulting agreement, your rights and benefits pursuant to this letter agreement shall remain unaffected.

 

NSAM and/or New Polaris shall promptly pay or reimburse you for reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred by you in connection with this letter agreement and any related arrangements, including, without limitation, the review, negotiation, drafting and execution of this letter agreement and any related arrangements and the letter agreements and any related arrangements of Messrs. Hamamoto, Tylis, Lieberman and Gilbert; provided, that in no event shall such reimbursable costs and expenses exceed $150,000 in the aggregate. NSAM or New Polaris shall reimburse you for such fees within thirty (30) business days following your submission(s) of the documentation evidencing the fees.

 

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The provisions of Section 15 of the Employment Agreement (relating to Section 409A of the Code) shall apply to payments under this letter agreement.

 

This letter agreement will be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be entirely performed within such State.  This letter agreement may not be modified, amended, altered or supplemented except by the execution and delivery of a written agreement executed by the parties hereto.  In the event of any conflict between the Employment Agreement and this letter agreement, this letter agreement shall govern.  This letter agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same letter agreement.  Any disputes under this letter agreement shall be governed by the dispute resolution provisions of Section 14(a) of the Employment Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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Please sign below to indicate your acknowledgment and acceptance of the terms of this letter agreement.

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
NORTHSTAR ASSET   MANAGEMENT GROUP INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ronald J. Lieberman
    
	
 
    	
Name:
    	
Ronald J. Lieberman
    
	
 
    	
Title:
    	
Executive Vice   President,
    
	
 
    	
 
    	
General Counsel and   Secretary
    

 

 

Agreed to and acknowledged 
 as of the 2nd day of June, 2016:

 

 

	
/s/ Debra A. Hess
    	
 
    
	
Debra A. Hess
    	
 
    

 

[Executive Letter Agreement Signature Page – Debra A. Hess]

 

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Agreed to and acknowledged by NorthStar Realty Finance Corp.

 

 

	
By:
    	
/s/ Jonathan A. Langer
    	
 
    
	
Name:
    	
Jonathan A. Langer
    	
 
    
	
Title:
    	
Chief Executive Officer
    	
 
    

 

[Executive Letter Agreement Signature Page – Debra A. Hess]

 

8

 

ANNEX A —PERFORMANCE-BASED EQUITY AWARDS

 

NSAM 2014 Performance Award — 25,407 shares of NSAM common stock

 

NSAM 2015 Performance Award — 35,787 shares of NSAM common stock

 

NSAM 2016 Performance Award (to be granted immediately following December 31, 2016) — 16,126 shares of NSAM common stock

 

NSAM Absolute TSR Spin-Off Award — 97,776 shares of NSAM common stock

 

NSAM Relative TSR Spin-Off Award — 175,233 shares of NSAM common stock

 

NRF 2014 Performance Award — 15,648 shares of NRF common stock

 

NRF 2015 Performance Award — 20,937 shares of NRF common stock

 

NRF 2016 Performance Award (to be granted immediately following December 31, 2016) — 11,287 shares of NRF common stock

 

NRE 2014 Performance Award 5,216 shares of NRE common stock

 

NRE 2015 Performance Award — 6,979 shares of NRE common stock

 

NRE 2016 Performance Award (to be granted immediately following December 31, 2016) — 4,524 shares of NRE common stock

 

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