Document:

Exhibit 10.1

 

EXECUTION VERSION

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of June 2, 2017 (this “Amendment”), to the Amended and Restated Credit Agreement dated as of February 14, 2017 (such credit agreement being referred to herein as the “Credit Agreement”) among NGL ENERGY PARTNERS LP, a Delaware limited partnership (“Parent”), NGL ENERGY OPERATING LLC, a Delaware limited liability company (“Borrowers’ Agent”), each subsidiary of the Parent identified as a “Borrower” under the Credit Agreement (together with the Borrowers’ Agent, each, a “Borrower” and collectively, the “Borrowers”), each subsidiary of Parent identified as a “Guarantor” under the Credit Agreement (together with the Parent, each, a “Guarantor” and collectively, the “Guarantors”) DEUTSCHE BANK AG, NEW YORK BRANCH, as technical agent (in such capacity, together with its successors in such capacity, the “Technical Agent”) and DEUTSCHE BANK TRUST COMPANY AMERICAS (“DBTCA”), as administrative agent for the Secured Parties (in such capacity, together with its successors in such capacity, the “Administrative Agent”) and as collateral agent for the Secured Parties (in such capacity, together with its successors in such capacity, the “Collateral Agent”) and each financial institution identified as a “Lender” or an “Issuing Bank” under the Credit Agreement (each, a “Lender” and together with the Technical Agent, the Administrative Agent and the Collateral Agent, the “Secured Parties”).

 

RECITALS

 

WHEREAS, the Borrowers have requested certain amendments to the Credit Agreement; and

 

WHEREAS, the Lenders have agreed to amend the Credit Agreement solely upon the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

 

1.             Defined Terms.  Unless otherwise noted herein, terms defined in the Credit Agreement and used herein shall have the respective meanings given to them in the Credit Agreement.

 

2.             Amendment to Section 1.1 (Certain Defined Terms) of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended by deleting the table in the definition of “Applicable Commitment Fee Percentage” and replacing such table with the table set forth below:

 

	
Leverage Ratio
    	
 
    	
Commitment Fee
   Percentage
    	
 
    
	
Category 1:   Less than or equal to 2.00 to 1.00
    	
 
    	
0.375
    	
%
    
	
Category 2:   Less than or equal to 3.00 to 1.00 but greater than 2.00 to 1.00
    	
 
    	
0.375
    	
%
    
	
Category 3:   Less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00
    	
 
    	
0.375
    	
%
    
	
Category 4:   Less than or equal to 4.00 to 1.00 but greater than 3.50 to 1.00
    	
 
    	
0.50
    	
%
    
	
Category 5:   Less than or equal to 4.50 to 1.00 but greater than 4.00 to 1.00
    	
 
    	
0.50
    	
%
    
	
Category 6:   Less than or equal to 5.00 to 1.00 but greater than 4.5 to 1.00
    	
 
    	
0.50
    	
%
    
	
Category 7:   Greater than 5.00 to 1.00
    	
 
    	
0.50
    	
%
    

 

 

3.             Amendment to Section 1.1 (Certain Defined Terms) of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby further amended by amending and restating the definition of “Applicable Margin” as follows:

 

“Applicable Margin” means, with respect to any Loan, the applicable rate per annum determined in accordance with this definition.  As of the end of each fiscal quarter of the Credit Parties, commencing with the fiscal quarter ending March 31, 2017, the Applicable Margin for Loans shall be adjusted upward or downward, as applicable, to the respective percentages shown in the table below based on the Leverage Ratio as of the last day of such fiscal quarter (determined at the Borrowing Base Reference Time of such day).  For purposes hereof, any such adjustment in the respective amounts of the Applicable Margin, whether upward or downward, shall be effective five Business Days after the Compliance Certificate of the Credit Parties with respect to such fiscal quarter has been delivered to and received by the Administrative Agent in accordance with the terms of Section 6.3(c); provided, however, if any such Compliance Certificate is not delivered in a timely manner as required under the terms of Section 6.3(c), the Applicable Margin for Loans from the date such Compliance Certificate was due until five Business Days after Administrative Agent and Lenders receive the same will be the applicable rate per annum set forth below in Category 7; provided further, that the Applicable Margin for the period commencing on the fifth Business Day after the Compliance Certificate of the Credit Parties with respect to the fiscal quarter ended March 31, 2017 has been delivered to and received by the Administrative Agent in accordance with the terms of Section 6.3(c) and ending on the next upward or downward adjustment of the Applicable Margin for Loans, as hereinabove provided, shall be the applicable rate per annum set forth below in Category 6.

 

	
Leverage Ratio
    	
 
    	
Per Annum Percentage
   for Revolving Credit
   LIBOR Borrowings
    	
 
    	
Per Annum Percentage
   for Revolving Credit
   Alternate Base
   Rate Borrowings
    	
 
    
	
Category 1:   Less than or equal to 2.00 to 1.00
    	
 
    	
1.50
    	
%
    	
0.50
    	
%
    
	
Category 2:   Less than or equal to 3.00 to 1.00 but greater than 2.00 to 1.00
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    
	
Category 3:   Less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    
	
Category 4:   Less than or equal to 4.00 to 1.00 but greater than 3.50 to 1.00
    	
 
    	
2.25
    	
%
    	
1.25
    	
%
    
	
Category 5:   Less than or equal to 4.50 to 1.00 but greater than 4.00 to 1.00
    	
 
    	
2.50
    	
%
    	
1.50
    	
%
    
	
Category 6:   Less than or equal to 5.00 to 1.00 but greater than 4.5 to 1.00
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    
	
Category 7:   Greater than 5.00 to 1.00
    	
 
    	
3.00
    	
%
    	
2.00
    	
%
    

 

Without limitation of any other provision of this Agreement or any other remedy available to the Administrative Agent or the Lenders under any of the Loan Documents, to the extent that any financial statements delivered by the Borrowers pursuant to Section 6.3 shall be incorrect in any manner in respect any period and the Borrower’s Agent or any other Credit Party shall deliver to the Administrative Agent and/or the Lenders corrected financial statements for such period, the Administrative Agent may recalculate the Leverage Ratio for such period based upon such corrected financial statements, and, if such recalculation results in a Leverage Ratio that would have caused the Applicable Margin for such period to have been higher than under the prior calculations, then upon written notice thereof to the Borrower’s

 

2

 

Agent, the Loans shall bear interest based upon such recalculated Applicable Margin for such period retroactively from the date of delivery of the erroneous financial statements in question.

 

4.             Amendment to Section 1.1 (Certain Defined Terms) of the Credit Agreement.  Section 1.1 of the Credit Agreement is hereby amended by adding the following definition of “Debt Incurrence Requirements” in the proper alphabetical order:

 

“Debt Incurrence Financial Ratio Requirements” means, in relation to any Indebtedness incurred under Sections 7.1(b), (f), and (i), immediately after giving effect to the incurrence of any such Indebtedness (and giving pro forma effect to the expected application of proceeds thereof) based upon the Total Indebtedness immediately after giving effect to such incurrence (and application of proceeds) and Consolidated EBITDA for the four fiscal quarters most recently ended on or before the date of such incurrence, (a) the Leverage Ratio of the Credit Parties shall not be greater than 4.0 to 1.0 and (b) the Interest Coverage Ratio of the Credit Parties shall not be less than 2.75 to 1.0.

 

5.             Amendment to Section 2.1 (Commitments) of the Credit Agreement.  Section 2.1(a) of the Credit Agreement is hereby amended by amending and restating the second sentence thereof as follows:

 

“Notwithstanding the foregoing, the aggregate principal amount of the Working Capital Revolving Loans outstanding at any time shall not exceed the Total Working Capital Revolving Commitment minus the aggregate Letter of Credit Exposure Amount and Swingline Exposure at such time.”

 

6.             Amendment to Section 4.1 (All Loans) of the Credit Agreement.  Section 4.1(e) of the Credit Agreement is hereby amended and restated as follows:

 

“(e)         with respect to each Working Capital Revolving Loan and each Letter of Credit, the Borrower represents to the Administrative Agent for the benefit of the Lenders that, after giving effect to the advancing of such Working Capital Revolving Loan or the issuance of such Letter of Credit, as the case may be, the aggregate Working Capital Revolving Exposures of all Lenders at such time will not exceed the Total Working Capital Revolving Commitment or the Borrowing Base (determined and calculated on the date such Working Capital Revolving Loan is made or such Letter of Credit is issued).”

 

7.             Amendment to Section 7.1 (Indebtedness) of the Credit Agreement.  Section 7.1 of the Credit Agreement is hereby amended as follows:

 

(a)           Section 7.1(b) is hereby amended by amending and restating the proviso thereto as follows:

 

“provided that; the sum of (x) the aggregate amount of Indebtedness permitted by this clause (b), plus (y) the aggregate amount of Indebtedness permitted by clause (f) below, plus (z) the aggregate amount of Indebtedness permitted by clause (i) below, does not exceed (A) five percent (5.0%) of Partners’ Capital in the aggregate at any time outstanding and (B) at the time of and immediately after giving effect to the incurrence of any such Indebtedness, if the Debt Incurrence Financial Ratio Requirements are not satisfied with respect to the incurrence of such Indebtedness, 2.5% of Partners’ Capital;”

 

(b)           Section 7.1(f) is hereby amended by amending and restating clause (ii) of the proviso thereto as follows:

 

“(ii) the sum of (x) the aggregate amount of Indebtedness permitted by this clause (f), plus (y) the aggregate amount of Indebtedness permitted by clause (b) above, plus (z) the aggregate amount of Indebtedness permitted by clause (i) below, does not exceed (A) five percent (5.0%) of Partners’ Capital in the aggregate at any time outstanding and (B) at the time of and immediately after

 

3

 

giving effect to the incurrence of any such Indebtedness, if the Debt Incurrence Financial Ratio Requirements are not satisfied with respect to the incurrence of such Indebtedness, 2.5% of Partners’ Capital;”

 

(c)           Section 7.1(i) is hereby amended by amending and restating the proviso thereto as follows:

 

“provided that the sum of (x) aggregate amount of Indebtedness permitted by this clause (i), plus (y) the aggregate amount of Indebtedness permitted by clause (b) above, plus (z) the amount of outstanding Indebtedness permitted by clause (f) above, does not exceed (A) five percent (5.0%) of Partners’ Capital in the aggregate at any time outstanding and (B) at the time of and immediately after giving effect to the incurrence of any such Indebtedness, if the Debt Incurrence Financial Ratio Requirements are not satisfied with respect to the incurrence of such Indebtedness, 2.5% of Partners’ Capital;”

 

8.             Amendment to Section 7.10 (Redemption, Dividends, Equity Issuance, Distributions and Payments) of the Credit Agreement.  Section 7.10 of the Credit Agreement is hereby amended as follows:

 

(a)           Subsection (a) of Section 7.10 is hereby amended by adding the following words immediately before the words “or set aside any amount for any such purpose” in the first clause thereof:

 

“or any Equity Interests of the General Partner” ; and

 

(b)           Subsection (b) of Section 7.10 is hereby amended by amending and replacing clause (iii) with the following clause (iii):

 

“(iii) Cash Dividends to the holders of any Equity Interests of the Parent, so long as (x) no Default or Event of Default exists both immediately before and after giving effect to the declaration and the payment of such Cash Dividend, (y) such Cash Dividend does not exceed Available Cash for such quarterly period, and (z) if the amount of such Cash Dividends to be paid to common unit holders during any fiscal quarter would, on a per unit basis immediately after giving effect to the payment of such Cash Dividends to common unit holders, be greater than the amount of such Cash Dividends paid to common unit holders on a per unit basis during the  immediately preceding fiscal quarter, the Leverage Ratio as of the last day of the fiscal quarter (determined at the Borrowing Base Reference Time of such day) ending immediately prior to the payment of such Cash Dividend to common unit holders (or if such Cash Dividend to common unit holders is to be paid on the last day of a fiscal quarter, the last day of such fiscal quarter) is less than 4.25 to 1.00;”

 

9.             Amendment to Section 7.11 (Financial Covenants) of the Credit Agreement.  Section 7.11 of the Credit Agreement is hereby amended and restated as follows:

 

“Section 7.11        Financial Covenants.

 

(a)           Commencing with the fiscal quarter ending June 30, 2017, permit the Leverage Ratio of the Credit Parties as of the last day of any fiscal quarter (determined at the Borrowing Base Reference Time of such day) to be greater than the ratio set forth in the table below under the heading “Maximum Leverage Ratio” opposite the last day of such fiscal quarter:

 

	
Fiscal Quarter Ending
    	
 
    	
Maximum Leverage Ratio
    
	
6/30/2017
    	
 
    	
5.50 to 1.0
    
	
9/30/2017
    	
 
    	
5.50 to 1.0
    
	
12/31/2017
    	
 
    	
5.50 to 1.0
    
	
3/31/2018
    	
 
    	
4.75 to 1.0
    
	
6/30/2018
    	
 
    	
4.75 to 1.0
    
	
9/30/2018
    	
 
    	
4.75 to 1.0
    
	
12/31/2018
    	
 
    	
4.75 to 1.0
    
	
3/31/2019 and the last day of each fiscal quarter thereafter
    	
 
    	
4.50 to 1.0
    

 

4

 

(b)           Commencing with the fiscal quarter ending June 30, 2017, permit the Senior Secured Leverage Ratio of the Credit Parties as of the last day of any fiscal quarter (determined at the Borrowing Base Reference Time of such day) to be greater than the ratio set forth in the table below under the heading “Maximum Senior Secured Leverage Ratio” opposite the last day of such fiscal quarter:

 

	
Fiscal Quarter Ending
    	
 
    	
Maximum Senior Secured Leverage Ratio
    
	
6/30/2017
    	
 
    	
2.50 to 1.0
    
	
9/30/2017
    	
 
    	
2.50 to 1.0
    
	
12/31/2017
    	
 
    	
2.50 to 1.0
    
	
3/31/2018 and the last day of each fiscal quarter thereafter
    	
 
    	
3.25 to 1.0
    

 

(c)           Commencing with the fiscal quarter ending June 30, 2017, permit the Interest Coverage Ratio of the Credit Parties as of the last day of any fiscal quarter (determined at the Borrowing Base Reference Time of such day) to be less than the ratio set forth in the table below under the heading “Minimum Interest Coverage Ratio” opposite the last day of such fiscal quarter:

 

	
Fiscal Quarter Ending
    	
 
    	
Minimum Interest Coverage Ratio
    
	
6/30/2017
    	
 
    	
2.25 to 1.0
    
	
9/30/2017
    	
 
    	
2.25 to 1.0
    
	
12/31/2017
    	
 
    	
2.25 to 1.0
    
	
3/31/2018 and the last day of each fiscal quarter thereafter
    	
 
    	
2.75 to 1.0
    

 

10.          Representations and Warranties; No Default.  To induce the Lenders to enter into this Amendment, each Credit Party that is a party hereto (by delivery of its respective counterpart to this Amendment) hereby (i) represents and warrants to the Administrative Agent and the Lenders that after giving effect to this Amendment, its representations and warranties contained in the Credit Agreement and other Loan Documents are true and correct in all material respects on and as of the date hereof with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties were true and correct in all material respects as of such earlier date); (ii) represents and warrants to the Administrative Agent and the Lenders that it (x) has the requisite power and authority to make, deliver and perform this Amendment; (y) has taken all necessary corporate, limited liability company, limited partnership or other action to authorize its execution, delivery and performance of this Amendment, and (z) has duly executed and delivered this Amendment and (iii) certifies that no Default or Event of Default has occurred and is continuing under the Credit Agreement (after giving effect to this Amendment) or will result from the making of this Amendment.

 

11.          Effectiveness of Amendments.  This Amendment shall become effective upon the first date on which each of the following conditions has been satisfied:

 

(a)           Amendment Documents.  The Administrative Agent shall have received this Amendment, duly executed and delivered by each of the Credit Parties, and by Lenders constituting the Required Lenders.

 

(b)           Fees and Expenses.  The Borrowers shall, upon demand, pay to the Administrative Agent the amount of any and all reasonable fees, costs and expenses that are for the account of the Borrowers

 

5

 

pursuant to Section 10.9 of the Credit Agreement, including all such fees, costs and expenses incurred in connection with this Amendment.

 

(c)           Proceedings and Documents.  All corporate and other proceedings pertaining directly to this Amendment and all documents, instruments directly incident to this Amendment shall be satisfactory to the required Lenders and their respective counsel and the Technical Agent shall have received all such counterpart originals or certified or other copies of such documents as the Technical Agent may reasonably request.

 

12.          Limited Effect.  Except as expressly provided hereby, all of the terms and provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect.  The amendments contained herein shall not be construed as a waiver or amendment of any other provision of the Credit Agreement or the other Loan Documents or for any purpose, except as expressly set forth herein, or a consent to any further or future action on the part of any Credit Party that would require the waiver or consent of the Lenders.  This Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

 

13.          GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF NEW YORK.

 

14.          Counterparts.  This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart.  Delivery of an executed counterpart hereof by facsimile or email transmission shall be effective as delivery of a manually executed counterpart hereof.

 

15.          Headings.  Section or other headings contained in this Amendment are for reference purposes only and shall not in any way affect the meaning or interpretation of this Amendment.

 

16.          Guarantor Acknowledgement.  Each Guarantor party hereto hereby (i) consents to the modifications to the Credit Agreement contemplated by this Amendment and (ii) acknowledges and agrees that its guaranty pursuant to Section 10.18 of the Credit Agreement is, and shall remain, in full force and effect after giving effect to the Amendment.

 

17.          Lender Acknowledgement.  Each undersigned Lender, by its signature hereto, hereby authorizes and directs DBTCA in its capacity as Administrative Agent and as Collateral Agent to execute this Amendment.

 

[Signature Pages Follow]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

	
 
    	
BORROWERS’   AGENT AND BORROWER:
    
	
 
    	
 
    
	
 
    	
NGL   ENERGY OPERATING LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert W. Karlovich III
    
	
 
    	
 
    	
Name:
    	
Robert   W. Karlovich III
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer and Executive Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PARENT:
    
	
 
    	
 
    
	
 
    	
NGL   ENERGY PARTNERS LP,
    
	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert W. Karlovich III
    
	
 
    	
 
    	
Name:
    	
Robert   W. Karlovich III
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer and Executive Vice President 
    
					

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
ANTICLINE   DISPOSAL, LLC
    
	
 
    	
CENTENNIAL   ENERGY, LLC
    
	
 
    	
CENTENNIAL   GAS LIQUIDS ULC
    
	
 
    	
CHOYA   OPERATING, LLC
    
	
 
    	
GRAND   MESA PIPELINE, LLC
    
	
 
    	
HICKSGAS,   LLC
    
	
 
    	
HIGH   SIERRA CRUDE OIL AND MARKETING, LLC
    
	
 
    	
HIGH   SIERRA ENERGY, LP
    
	
 
    	
NGL   CRUDE CANADA, ULC
    
	
 
    	
NGL   CRUDE CANADA HOLDINGS, LLC
    
	
 
    	
NGL   CRUDE CUSHING, LLC
    
	
 
    	
NGL   CRUDE LOGISTICS, LLC
    
	
 
    	
NGL   CRUDE PIPELINES, LLC
    
	
 
    	
NGL   CRUDE TERMINALS, LLC
    
	
 
    	
NGL   CRUDE TRANSPORTATION, LLC
    
	
 
    	
NGL   ENERGY EQUIPMENT, LLC
    
	
 
    	
NGL   ENERGY FINANCE CORP.
    
	
 
    	
NGL   ENERGY HOLDINGS II, LLC
    
	
 
    	
NGL   ENERGY LOGISTICS, LLC
    
	
 
    	
NGL   ENERGY OPERATING LLC
    
	
 
    	
NGL   ENERGY PARTNERS LP
    
	
 
    	
NGL   LIQUIDS, LLC
    
	
 
    	
NGL-MA,   LLC
    
	
 
    	
NGL-MA   REAL ESTATE, LLC
    
	
 
    	
NGL   MARINE, LLC
    
	
 
    	
NGL   MILAN INVESTMENTS, LLC
    
	
 
    	
NGL-NE   REAL ESTATE, LLC
    
	
 
    	
NGL   PROPANE, LLC
    
	
 
    	
NGL   SHIPPING AND TRADING, LLC
    
	
 
    	
NGL   SUPPLY TERMINAL COMPANY, LLC
    
	
 
    	
NGL   SUPPLY TERMINAL SOLUTION MINING, LLC
    
	
 
    	
NGL   SUPPLY WHOLESALE, LLC
    
	
 
    	
NGL   WATER SOLUTIONS, LLC
    
	
 
    	
NGL   WATER SOLUTIONS BAKKEN, LLC
    
	
 
    	
NGL   WATER SOLUTIONS DJ, LLC
    
	
 
    	
NGL   WATER SOLUTIONS EAGLE FORD, LLC
    
	
 
    	
NGL   WATER SOLUTIONS MID-CONTINENT, LLC
    
	
 
    	
NGL   WATER SOLUTIONS PERMIAN, LLC
    
	
 
    	
OPR,   LLC
    
	
 
    	
OSTERMAN   PROPANE, LLC
    
	
 
    	
SAWTOOTH   NGL CAVERNS, LLC
    
	
 
    	
TRANSMONTAIGNE   LLC
    
	
 
    	
TRANSMONTAIGNE   PRODUCT SERVICES LLC
    
	
 
    	
TRANSMONTAIGNE   SERVICES LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert W. Karlovich
    
	
 
    	
 
    	
Name:
    	
Robert   W. Karlovich III
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer and Executive Vice President
    

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
SECURED   PARTIES:
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK TRUST COMPANY AMERICAS, as

Administrative   Agent and as Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Chris Chapman
    
	
 
    	
 
    	
Name:
    	
Chris   Chapman
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shari Bandner
    
	
 
    	
 
    	
Name:
    	
Shai   Bandner
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DEUTSCHE   BANK AG, NEW YORK BRANCH,
    
	
 
    	
as   a Lender, as Swingline Lender, as an Issuing Bank and as Technical Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Chris Chapman
    
	
 
    	
 
    	
Name:
    	
Chris   Chapman
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shari Bandner
    
	
 
    	
 
    	
Name:
    	
Shai   Bandner
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
ROYAL   BANK OF CANADA,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jason S. York
    
	
 
    	
 
    	
Name:   Jason S. York
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BNP   PARIBAS,
    
	
 
    	
as   a Lender and Issuing Bank
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Suzanne Dumey
    
	
 
    	
 
    	
Name:   Suzanne Dumey
    
	
 
    	
 
    	
Title:   Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Deborah P. Whittle
    
	
 
    	
 
    	
Name:   Deborah P. Whittle
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stephen Monto
    
	
 
    	
 
    	
Name:   Stephen Monto
    
	
 
    	
 
    	
Title:   SVP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
BARCLAYS   BANK PLC,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Jake Lam
    
	
 
    	
 
    	
Name:   Jake Lam
    
	
 
    	
 
    	
Title:   Assistant Vice President
    

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
ABN   AMRO CAPITAL USA LLC,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   J.D. Keverkamp
    
	
 
    	
 
    	
Name:   J.D. Keverkamp
    
	
 
    	
 
    	
Title:   Country Executive
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michaela Braun
    
	
 
    	
 
    	
Name:   Michaela Braun
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
TORONTO   DOMINION BANK, NEW YORK BRANCH,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Savo Bozic
    
	
 
    	
 
    	
Name:   Savo Bozic
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Chad Clark
    
	
 
    	
 
    	
Name:   Chad Clark
    
	
 
    	
 
    	
Title:   Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MIZUHO   BANK, LTD.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Leon Mo
    
	
 
    	
 
    	
Name:   Leon Mo
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
UBS   AG, STAMFORD BRANCH,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Craig Pearson
    
	
 
    	
 
    	
Name:   Craig Pearson
    
	
 
    	
 
    	
Title:   Associate Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Darlene Arias
    
	
 
    	
 
    	
Name:   Darlene Arias
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Nupur Kumar
    
	
 
    	
 
    	
Name:   Nupur Kamar
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Warren Van Heyst
    
	
 
    	
 
    	
Name:   Warren Van Heyst
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GOLDMAN   SACHS BANK USA,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ushma Dedhiya
    
	
 
    	
 
    	
Name:   Ushma Dedhiya
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
MACQUARIE BANK LIMITED,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew Gates
    
	
 
    	
 
    	
Name: Andrew Gates
    
	
 
    	
 
    	
Title:   Division Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joel Outlaw
    
	
 
    	
 
    	
Name: Joel Outlaw
    
	
 
    	
 
    	
Title:   Associate Director
    

 

Signature Page to Amendment No. 2 to Credit Agreement

 

 

	
 
    	
CITIZENS   BANK, N.A.,
    
	
 
    	
as   a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   John Corley
    
	
 
    	
 
    	
Name:   John Corley
    
	
 
    	
 
    	
Title:   Director
    

 

Signature Page to Amendment No. 2 to Credit AgreementExhibit 10.1

 

SECOND AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

This Second Amended and Restated Employment Agreement (the “Employment
Agreement”), executed as of this 1st day of June, 2017 (the “Effective Date”), by and between FRANK S. SORRENTINO,
III an individual residing at 12 Ninevah Place, Sag Harbor, NY 11963 (the “Employee”), CONNECTONE BANK,
a New Jersey state chartered commercial bank with its principal place of business located at 301 Sylvan Avenue, Englewood Cliffs,
NJ 07632 (the “Bank”), and CONNECTONE BANCORP, INC., a New Jersey corporation with its principal place
of business located at 301 Sylvan Avenue, Englewood Cliffs, NJ 07632 (the “Company”; the Bank and the Company
sometimes collectively are referred to herein as “Employer”).

 

 

WHEREAS, the
Board of Directors of the Bank and the Board of Directors of the Company have each determined that it is in the best interests
of each of the Bank and the Company to enter into this Agreement with the Employee, and each respective Board has authorized the
Bank and the Company to enter into this Agreement;

 

WHEREAS, the
Employee agrees to be employed pursuant to the terms and conditions of this Agreement;

 

NOW, THEREFORE,
in consideration of the premises and covenants contained herein, and with the intent to be legally bound hereby, the parties hereto
hereby agree as follows:

 

1.                 
Employment. The Company and the Bank hereby jointly agree to employ the Employee, and the Employee hereby
accepts such employment, upon the terms and conditions set forth herein.

 

2.                 
Position and Duties. The Employee shall be employed, as Chairman, Chief Executive Officer and President of
the Company and the Bank, to perform such services in that capacity as are usual and customary for comparable institutions, all
other employees of the Company and the Bank shall report directly or indirectly to the Employee and the Employee shall report only
and directly to the Board of Directors of the Company and the Bank. In addition, the Employee shall annually be nominated for election
to the Boards of the Company and the Bank, and the Company, as the sole shareholder of the Bank, shall vote to elect the Employee
to the Board of the Bank. As President and Chief Executive Officer, the Employee shall have general executive powers to run the
operations of the Employer and carry out the dictates of the board of directors. The Employee shall have general supervision of
the business of the Employer, and shall prescribe the duties of the other officers and employees of the Employer. The Chief Executive
Officer shall have the authority to retain or terminate officers and employees of the corporation, subject to Board ratification
with regard to the Chief Financial Officer, Chief Lending Officer and Chief Credit Officer.

 

The Employee agrees
that he will devote his full business time and efforts to his duties hereunder.

 

     

     

    

3.                 
Compensation. The Employer shall pay to the Employee compensation for his services as follows:

 

(a)               
Base Salary. The Employee shall be entitled to receive during his service hereunder a minimum annual base
salary (the “Base Salary”) of Seven Hundred Thirty Five Thousand ($735,000), which shall be payable in installments
in accordance with the Employer’s usual payroll method. Annually commencing in 2018, the Board of Directors shall review
the Employee’s performance, the status of the Employer and such other factors as the Board of Directors or a committee thereof
shall deem appropriate and shall increase, the Base Salary accordingly; provided, however, that the Base Salary shall not be reduced
unless such reduction is part of an overall reduction in salary applicable to all senior executive officers of the Employer.

 

(b)              
Incentive Plans. The Employee shall be entitled to participate in the Employer’s incentive plan for
executive officers of the Employer.

 

4.                 
Other Benefits.

 

(a)               
Automobile. The Employee shall be entitled to a cash allowance in the amount of one thousand two hundred and
fifty ($1,250) dollars per month to be used for the purpose of maintaining an automobile for use in the business of the Employer.

 

(b)              
Insurance Coverage and Employee Benefit Plans. The Employee shall be entitled to receive hospital, health,
medical, and life insurance of a type currently provided to and enjoyed by other senior officers of the Employer, and shall be
entitled to participate in any other employee benefit, incentive or retirement plans offered by the Employer to its employees generally
or to its senior management.

 

(c)               
Expenses. The Employee shall be entitled to reimbursement for all proper business expenses incurred by him
with respect to the business of the Employer upon the provision of documentation evidencing such expenses in accordance with the
Employer’s expense reimbursement policies and in the same manner and to the same extent as such expenses are reimbursed to
other officers of the Employer.

 

(d)              
Vacation. The Employee shall be entitled to vacations and other leave in accordance with the Employer’s
policy for senior executives.

 

5.                 
Term. The term of this Agreement shall commence on the Effective Date and continue until the third anniversary
of the Effective Date (the “Term”); provided, however, that unless either party gives written notice at least
ninety (90) days prior to the anniversary of the Effective Date, this Agreement shall renew for one (1) additional year on each
such anniversary of the Effective Date, and such extended period shall be deemed to be included within the Term.

 

6.                 
Termination. The Employee may be terminated at any time, without prejudice to the Employee’s right to
compensation or benefits as provided herein. The Employee’s rights upon a termination shall be as follows:

 

(a)               
Cause. For purposes of this Agreement, “Cause” with respect to the termination by the Employer
(as defined below) of the Employee’s employment shall mean (i) willful and continued failure, for a period of at least
thirty (30) calendar days, by the Employee to perform his duties for the Employer under this Agreement after at least one (1) warning
in writing from the Compensation Committee of the Board of Directors of the Employer, or such person or body to which such body
may delegate such authority, identifying specifically any such failure, (ii) the willful engaging by the Employee in misconduct
which causes material injury to the Employer as specified in written notice to the Employee from the Compensation Committee of
the Board of Directors of the Employer, or such person or body to which such body may delegate such authority; or (iii) conviction
of or a plea of nolo contendere to a crime (other than a traffic violation) which is either a felony or an indictable offense or
the Employee’s habitual drunkenness, drug abuse, or excessive absenteeism other than due to Disability (as defined herein),
after a warning (with respect to drunkenness or absenteeism only) in writing from the Compensation Committee of the Board of Directors
of the Employer, or such person or body to which such body may delegate such authority to refrain from such behavior.

 

    -2-

     

    

(b)              
Good Reason. For purposes of this Agreement, “Good Reason” with respect to the resignation by
the Employee shall mean (i) a material diminution in title, reporting duties or responsibilities of the Employee, (ii) a relocation
of the Employee’s principal place of employment by more than fifty (50) miles from its location on the date of this Agreement,
(iii) a material breach by the Employer of Section 3 or 4 of this Agreement or (iv) any other action or inaction that constitutes
a material breach by the Employer of this Agreement; provided, however, that a resignation shall not be for “Good Reason”
unless the Employee provides the Employer with notice of existence of any condition that may constitute Good Reason within ninety
(90) calendar days of his initial knowledge of the existence thereof, the Employer has not cured the condition within thirty (30)
calendar days of such notice and the Employee resigns within ninety (90) calendar days after the lapse of the cure period.

 

(c)               
Termination with Cause. The Employer shall have the right to terminate the Employee for “cause”.
In the event of such termination, the Employee shall only be entitled to salary and benefits accrued through the date of termination.

 

(d)              
Termination without Cause or for Good Reason. Upon a termination of the Employee’s employment hereunder
without “cause”, or the Employee’s resignation for “good reason”, in recognition of such termination
and the Employee’s agreement to be bound by the covenants contained in Sections 8, 9 and 10 hereof, the Employee shall be
entitled to receive a lump sum severance payment equal to two and one-half (2.5) times the sum of (i) his then current annual
Base Salary, and (ii) his then current target cash bonus. In addition, the Employee shall be entitled to receive a lump sum
payment equal to his bonus for the year in which his termination of employment occurs, prorated for the number of days the Employee
worked for the Company during the year of termination. Such bonus will be based on actual performance and will be paid at the time
annual bonuses for such year are ordinarily paid. This lump sum severance payment shall be made to the Employee in accordance with
the terms of Section 11(g) hereof, and subject to Section 11(f) hereof. In addition, the Employer shall continue to provide
the Employee with hospital, health, medical and life insurance, and any other like benefits in effect at the time of such termination,
on the terms and conditions under which they were offered to the Employee prior to such termination for a period of eighteen months.
In the event the Employer, under its insurance and benefit plans then in effect, is unable to provide the Employee with the benefits
provided for above under the terms provided for herein, then in lieu of providing such benefits, the Employer will pay an amount
equal, on an after tax basis, to the Employee’s premium to continue such coverage pursuant to the terms of the Comprehensive
Omnibus Budget Reconciliation Act. The Employee shall have no duty to mitigate damages in connection with his termination by the
Employer without “cause” or the Employee’s resignation for “good reason”. However, if the Employee
obtains new employment and such new employment provides for hospital, health, medical and life insurance, and other benefits, in
a manner substantially similar to the benefits payable by the Employer hereunder, the Employer may permanently terminate the duplicative
benefits it is obligated to provide hereunder. Following the cessation of the continuation of the Employee’s hospital, health
and medical insurance, the Employee shall be permitted to elect to extend such insurance coverage under the policies maintained
by the Employer in accordance with the applicable provisions of the Section 4980B of the Internal Revenue Code of 1986, as
amended (“Code”), and/or applicable state law, to the extent eligible to do so under the Code and such state law.

 

    -3-

     

    

(e)               
Death or Disability. This Agreement shall automatically terminate upon the death or Disability of the Employee.
Upon such termination, the Employee shall not be entitled to any additional compensation hereunder; provided, however, that the
foregoing shall not prejudice the Employee’s right to be paid for all compensation earned through the date of such termination
and the benefits of any insurance programs maintained for the benefit of Employee or his beneficiaries in the event of his death
or Disability. For purposes hereof, Disability shall be defined to mean a disability under any long term disability plan of the
Employer then in effect.

 

(f)               
Board Action to Terminate. Any determination by the Employer to terminate the Employee’s employment
hereunder, whether with or without “cause”, shall only be effective if approved in a resolution adopted by at least
seventy-five percent (75%) of the total members of the Board of Directors of each of the Company and the Bank.

 

7.                 
Change in Control.

 

(a)               
Upon the termination of the Employee’s employment upon the occurrence of a Change in Control (as herein defined),
and in recognition of such termination and the Employee’s agreement to be bound by the covenants contained in Sections 8,
9 and 10 hereof, the Employee shall be entitled to receive the payments provided for under paragraph (c) hereof. In addition,
if within two (2) years of the occurrence of a Change in Control, the Employer or its successor shall terminate the Employee’s
employment hereunder without “cause”, or the Employee resigns for “good reason”, in recognition of such
termination and the Employee’s agreement to be bound by the covenants contained in Sections 8, 9 and 10 hereof, the
Employee shall have the right to resign his employment with the Employer or its successor and thereafter the Employee shall become
entitled to receive the payments provided for under paragraph (c) below.

 

(b)              
A “Change in Control” shall mean:

 

		(i)	a reorganization, merger, consolidation or sale of all or substantially all of the assets of the
Company, or a similar transaction, in any case in which the holders of the voting stock of the Company prior to such transaction
do not hold (in substantially the same proportion) a majority of the voting power of the resulting entity (or an entity that wholly
owns the resulting entity);

 

    -4-

     

    

		(ii)	individuals who constitute the Incumbent Board (as herein defined) of the Company cease for any
reason to constitute a majority thereof; or

 

		(iii)	any person becomes the beneficial owner of securities representing 25% or more of the combined
voting stock of the Company other than (1) the Employee or any group that includes the Employee or (2) an entity referred
to in the parenthetical to clause (b)(i) of this definition.

 

For these purposes,
“Incumbent Board” means the Board of Directors of the Company on the date hereof and any person who becomes a director
subsequent to the date hereof whose election was approved by a voting of at least three-quarters of the directors comprising the
Incumbent Board or whose nomination for election by members or stockholders was approved by the same nominating committee serving
under an Incumbent Board. However, the Incumbent Board will not include anyone who becomes a member of the Board of Directors
as a result of either (i) an actual or threatened election contest or proxy or consent solicitation on behalf of anyone other than
the Board of the Directors, including as a result of any appointment, nomination or other agreement intended to avoid or settle
a contest or solicitation, or (ii) agreement with any third party.

 

(c)               
In the event the conditions of Section (a) above are satisfied, the Employee shall be entitled to receive a
lump sum payment equal to three (3) times the sum of (i) the Employee’s current annual Base Salary plus (ii) the
Employee’s current target cash bonus. In addition, the Employee shall be entitled to receive a lump sum payment equal to
his bonus for the year in which his termination of employment occurs, prorated for the number of days the Employee worked for the
Company during the year of termination. Such bonus will be based on actual performance and will be paid at the time annual bonuses
for such year are ordinarily paid. The payments provided for hereunder shall be made in accordance with the terms of Section 11(g)
hereof, and subject to Section 11(f) hereof. In addition to the foregoing, the Employee shall be entitled to receive from
the Employer, or its successor, hospital, health, medical and life insurance on the terms and at the cost to the Employee as the
Employee was receiving such benefits upon the date of his termination. The Employer’s obligation to continue such insurance
benefits will be for a period of eighteen (18) months from the effective date of the Change in Control. If any payments provided
for hereunder, when combined with any other payments due to the Employee contingent upon a Change in Control, constitute an “excess
parachute payment” under Section 280G of the Code, the total payments will be reduced such that no portion of such payments
are subject to the excise tax under Section 4999 of the Code to the extent that, after all applicable taxes, the Employee
retains more of the total payments after this reduction than if the full amount were payable. Payments will be reduced in such
manner as has the least economic effect on the Employee. In applying these principles, any reduction or elimination of the Payments
shall be made in a manner consistent with the requirements of Section 409A of the Code and where two economically equivalent amounts
are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.
Unless the Employer and the Employee otherwise agree in writing, any determination required under this Section 7(c) shall be made
in writing by a nationally-recognized accounting firm selected by the Employee (the “Accountants”), whose determination
will be conclusive and binding upon the Employee and the Employer for all purposes. For purposes of making the calculations required
by this Section 7(c), the Accountants (i) may make reasonable assumptions and approximations concerning applicable taxes, (ii)
may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, and (iii)
shall take into account a “reasonable compensation” (within the meaning of Q&A-9 and Q&A-40 to Q&A 44 of
the final regulations under Section 280G of the Code) analysis of the value of services provided or to be provided by the Employee,
including any agreement by the Employee (if applicable) to refrain from performing services pursuant to a covenant not to compete
or similar covenant applicable to the Employee that may then be in effect (including, without limitation, those contemplated by
Sections 8 and 9 of this Agreement). The Employer and the Employee agree to furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a determination under this provision. The Employer shall bear all costs
the Accountants may reasonably incur in connection with any calculations contemplated by this provision.

 

    -5-

     

    

8.                 
Covenant Not to Compete. As consideration for the benefits conferred upon the Employee hereunder, including,
but not limited to the Employee’s right to severance under Section 6(d) and to a change in control payment under Section 7(c),
the Employee agrees that during the term of his employment hereunder and for a period of one (1) year after the termination of
his employment (the “Covenant Term”), provided that he is entitled to severance hereunder upon such termination, he
will not in any way, directly or indirectly, manage, operate, control, accept employment or a consulting position with or otherwise
advise or assist or be connected with or own or have any other interest in or right with respect to (other than through ownership
of not more than five percent (5%) of the outstanding shares of a corporation whose stock is listed on a national securities exchange
or on NASDAQ) any enterprise which competes with the Employer in the business of banking in the counties in which the Employer
conducts its business on the date of the Employee’s termination.

 

9.                 
Non Solicitation

 

During the period the
Employee is performing services for the Employer and for a period of one (1) year following the termination of the Employee’s
services for the Employer for any reason, the Employee agrees that the Employee will not, directly or indirectly, for the Employee’s
benefit or for the benefit of any other person, firm or entity, do any of the following:

 

		(i)	solicit or attempt to solicit from any customer that the Employee serviced or learned of while
in the employ of the Employer (“Customer”), or any potential customer of the Employer which has been the subject of
a known written or oral bid, offer or proposal by the Employer, or of substantial preparation with a view to making such a bid,
proposal or offer, within twelve (12) months prior to such Employee’s termination (“Potential Customer”), business
of a similar nature or related to the business of the Employer;

 

    -6-

     

    

		(ii)	accept any business from, or perform any work or services for, any Customer or Potential Customer,
which business, work or services is similar to the business of the Employer;

 

		(iii)	cause or induce or attempt to cause or induce any Customer, Potential Customer, licensor, supplier
or vendor of the Employer to reduce or sever its affiliation with the Employer;

 

		(iv)	solicit the employment or services of, or hire or engage, or assist anyone else to hire or engage,
any person who was known to be employed or engaged by or was a known employee of or consultant to the Employer upon the termination
of the Employee’s services to the Employer, or within twelve (12) months prior thereto; or

 

		(v)	otherwise interfere with the business or accounts of the Employer.

 

For purposes hereof, “solicitation”
shall include directly or indirectly initiating any contact or communication of any kind whatsoever for purposes of inviting, encouraging
or requesting such Customer, Potential Customer, licensor, supplier, vendor, employee or consultant to materially alter its business
relationship, or engage in business, with the Employee or any person, firm or entity other than the Employer.

 

10.             
Confidential Information

 

(a)               
As used herein, “Confidential Information” means any confidential or proprietary information relating
to the Employer and its affiliates including, without limitation, the identity of the Employer’s customers, the identity
of representatives of customers with whom the Employer has dealt, the kinds of services provided by the Employer to customers,
the manner in which such services are performed or offered to be performed, the service needs of actual or prospective customers,
customer preferences and policies, pricing information, business and marketing plans, financial information, budgets, compensation
or personnel records, information concerning the creation, acquisition or disposition of products and services, vendors, software,
data processing programs, databases, customer maintenance listings, computer software applications, research and development data,
know-how and other trade secrets.

 

Notwithstanding the above, Confidential
Information does not include information which: (i) is or becomes public knowledge without breach of this Agreement;
or (ii) is received by the Employee from a third party without any violation of any obligation of confidentiality and without
confidentiality restrictions; provided, however, that nothing in this Agreement shall prevent the Employee from participating
in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding
to the extent that such participation or disclosure is required under applicable law; provided further, however, that the
Employee will provide the Employer with prompt notice of such request so that the Employer may seek (with the cooperation of the
Employee, if so requested by the Employer), a protective order or other appropriate remedy and/or waiver in writing of compliance
with the provisions of this Agreement. If a particular portion or aspect of Confidential Information becomes subject to any of
the foregoing exceptions, all other portions or aspects of such information shall remain subject to all of the provisions of this
Agreement.

 

    -7-

     

    

(b)              
At all times, both during the period of the Employee’s services for the Employer and after termination of the
Employee’s services, the Employee will keep in strictest confidence and trust all Confidential
Information and the Employee will not directly or indirectly use or disclose to any third-party any Confidential Information, except
as may be necessary in the ordinary course of performing the Employees duties for the Employer, or disclose any Confidential Information,
or permit or encourage any other person or entity to do so, without the prior written consent of the Employer except as may be
necessary in the ordinary course of performing the Employee’s duties for the Employer. Notwithstanding anything to the contrary
in this Agreement or otherwise, nothing shall limit the Employee’s rights under applicable law to provide truthful information
to any governmental entity or to file a change with or participate in an investigation conducted by any governmental entity. 

 

(c)               
The Employee is hereby notified that the immunity provisions in Section 1833 of title
18 of the United States Code provide that an individual cannot be held criminally or civilly liable under any federal or state
trade secret law for any disclosure of a trade secret that is made (1) in confidence to federal, state or local government officials,
either directly or indirectly, or to an attorney, and is solely for the purpose of reporting or investigating a suspected violation
of the law, (2) under seal in a complaint or other document filed in a lawsuit or other proceeding, or (3) to your attorney in
connection with a lawsuit for retaliation for reporting a suspected violation of law (and the trade secret may be used in the court
proceedings for such lawsuit) as long as any document containing the trade secret is filed under seal and the trade secret is not
disclosed except pursuant to court order.

 

(d)              
The Employee agrees to return promptly all Confidential Information in tangible form,
including, without limitation, all photocopies, extracts and summaries thereof, and any such information stored electronically
on tapes, computer disks, mobile or remote computers (including personal digital assistants) or in any other manner to the Employer
at any time that the Employer makes such a request and automatically, without request, within five (5) days after the termination
of the Employee’s performance of services for the Employer for any reason.

 

11.             
Miscellaneous.

 

(a)               
Governing Law. In the absence of controlling Federal law, this Agreement shall be governed by and interpreted
under the substantive law of the State of New Jersey.

 

(b)              
Severability. If any provision of this Agreement shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall in no way be affected or impaired, and such remaining provisions shall remain in full force and effect.
If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would
become valid or enforceable, then such provision shall be deemed to be written, construed and enforced as so limited.

 

    -8-

     

    

(c)               
Entire Agreement; Amendment. This Agreement sets for the entire understanding of the parties with regard
to the subject matter contained herein and supersedes any and all prior agreements, arrangements or understandings relating to
the subject matter hereof and may only be amended by written agreement signed by both parties hereto or their duly authorized representatives.

 

(d)              
Successors and Assigns. This Agreement shall be binding upon and become the legal obligation of the successors
and assigns of the Employer and shall inure to the benefit of the Employee’s estate, heirs and representatives in the event
of his death or Disability.

 

(e)               
Clawback and Recoupment. Any amounts paid the Employee hereunder shall be subject to any generally applicable
clawback or recoupment policy adopted by the Employer, or the requirements of any law or regulation applicable to the Employer
and governing the clawback or recoupment of executive compensation.

 

(f)               
Section 409A Compliance. If the Employee is a “specified employee” for purposes of Section 409A
of the Code, to the extent required to comply with Section 409A of the Code, any payments required to be made pursuant to
this Agreement which are deferred compensation and subject to Section 409A of the Code (and do not qualify for an exemption
thereunder) shall not commence until one day after the day which is six (6) months from the date of termination. Should this Section 11(f)
result in a delay of payments to the Employee, on the first day any such payments may be made without incurring a penalty pursuant
to Section 409A (the “409A Payment Date”), the Employer shall begin to make such payments as described in this
Section 11(f), provided that any amounts that would have been payable earlier but for application of this Section 11(f)
shall be paid in lump-sum on the 409A Payment Date.

 

(g)              
Release. All payments and benefits under Sections 6(c) or 7(c) hereof shall be contingent upon the Employee
executing a general release of claims in favor of the Employer, its subsidiaries and affiliates, and their respective officers,
directors, shareholders, partners, members, managers, agents or employees, in the form attached hereto as Exhibit A, and which
must be executed by the Employee no later than the twenty second (22nd) day after the termination of the Employee’s employment.
Payments under this Agreement that are contingent upon such release shall, subject to Section 11(f), commence within eight
(8) days after such release becomes effective; provided, however, that if the Employee’s termination of employment occurs
on or after November 15 of a calendar year, then severance payments shall, subject to the effectiveness of such release and Section 11(f),
commence on the first business day of the following calendar year.

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above written.

 

	 	CONNECTONE BANK
	 	 
	 	By:	/s/ Dr. Stephen Boswell
	 	 	Dr. Stephen Boswell
	 	 	Chairman, Compensation Committee

 

    -9-

     

    

	 	CONNECTONE BANCORP, INC.
	 	 
	 	By:	/s/ Dr. Stephen Boswell
	 	 	Dr. Stephen Boswell
	 	 	Chairman, Compensation Committee

 

	 	EMPLOYEE:
	 	 
	 	 	/s/ Frank S. Sorrentino, III
	 	 	Frank S. Sorrentino III

 

 

    -10-

     

    

EXHIBIT
A

 

RELEASE AGREEMENT

 

This Release Agreement
(this “Agreement”) is dated ·, 20__, by and among Frank S. Sorrentino
III (“Executive”), CONNECTONE BANCORP, INC. and CONNECTONE BANK (collectively “CNOB”).

 

WHEREAS, pursuant
to the terms of that certain Employment Agreement dated June 1, 2017 between Executive and CNOB (the “Employment Agreement”),
Executive has become entitled to receive a payment pursuant to either Section 6(d) or 7(c) of the Employment Agreement;

 

WHEREAS, pursuant
to Section 11(g) of the Employment Agreement, it is a condition precedent to CNOB’s obligation to make such payments
that Executive enter into this Agreement;

 

NOW, THEREFORE,
IN CONSIDERATION of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed
as follows:

 

1.                 
Release and Waiver.

 

(a)               
The Executive, for himself, his heirs, successors and assigns, does hereby generally and completely waive, release
and forever discharge, CNOB, and all their representatives, officers, directors employees and affiliates, and each and every successor,
assign and agent (the “Released CNOB”), from and against any and all claims. As used herein, “claims” means
any and all matters relating to the Employment Agreement, including, but not limited to, any and all claims related to Executive’s
service as an employee, officer or director of CNOB or any subsidiary or affiliate through the effective date of this Agreement
or arising from or related to Executive’s service with CNOB, and any and all claims, debts, liabilities, demands, obligations,
promises, acts, agreements, costs, expenses, damages, actions and causes of actions, whether in law or in equity, whether known
or unknown, suspected or unsuspected, arising from Executive’s employment or service with CNOB or any subsidiary or affiliate
thereof, and, except as set forth below, also includes but is not limited to: (i) claims under federal, state or local law
(statutory or decisional) for breach of contract, tort, wrongful or abusive or unfair discharge or dismissal, impairment of economic
opportunity or defamation, breach of fiduciary duty, intentional infliction of emotional distress, or discrimination based upon
race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation or any other unlawful criterion or
circumstance; (ii) claims for compensation, bonuses or benefits; (iii) claims under any employment letter,
service agreement, severance program, compensation, bonus, incentive, deferred retirement, health, welfare or benefit plan or arrangement
maintained by CNOB and its affiliates; (iv) claims for sexual harassment; (v) claims related to whistle blowing;
(vi) claims for punitive, incidental, indirect, consequential, special or exemplary damages; (vii) claims for violations
of any of the following laws (as amended) from the beginning of time to the effective date of this Agreement: the Equal Pay Act,
the Civil Rights Act of 1866, 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991
as amended, the Equal Pay Act, the Genetic Information and Discrimination Act, the Americans with Disabilities Act of 1991, the
Worker Adjustment Retraining and Notification Act, 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act
of 1993, the Rehabilitation Act, Executive Order 11246, all claims and damages relating to race, sex, national origin, disabilities,
religion, sexual orientation and age, all employment discrimination claims arising under similar state, country or city statutes,
any claims for unpaid compensation, wages and bonuses under the federal Fair Labor Standards Act, 29 U.S.C. § 201, et
seq., any and all claims for violation of Code Section 409A, or any state, county or city law or ordinance regarding wages
or compensation, and (viii) claims for violations of any other applicable labor or employment statute or law, from the beginning
of time to the effective date of this Agreement. For avoidance of doubt, this Section includes a release of claims under the
New Jersey Law Against Discrimination, the New Jersey State WARN Act, the New Jersey Conscientious Employee Protection Act, the
New Jersey Smoke-Free Air Act, the New Jersey Equal Pay Act, the New Jersey Occupational Safety and Health Law, the New Jersey
Temporary Disability Benefits Act and the New Jersey Family Leave Act. In addition, Executive waives any and all rights under the
laws of any jurisdiction in the United States that limit a general release to those claims that are known or suspected to exist
in Executive’s favor as of the effective date of this Agreement. The foregoing list is meant to be illustrative rather than
exclusive.

 

    A-1

     

    

(b)              
Notwithstanding the foregoing, Executive does not waive any rights related to: (i) CNOB’s obligations
to make payments or provide other benefits under either Section 6(c) or 7(c) of the Employment Agreement, (ii) claims
for payment under any equity compensation plan of CNOB in effect as of the date hereof and under which Executive received an award,
(iii) claims for benefits under CNOB’s tax-qualified retirement plans or other benefit or compensation plans in which
Executive has a vested benefit, or (iv) claims for benefits required by applicable law or health insurance coverage under
applicable state and federal group health care continuation coverage laws (e.g., COBRA). In addition, excluded from this
release and waiver are any claims which cannot be waived by law, including, but not limited to, the right to file a charge or complaint
with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration,
the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other self-regulatory organization
or any other federal, state or local governmental agency or commission (each a “Governmental Agency”), or to testify,
assist or participate in any investigation, hearing or proceeding conducted by a Governmental Agency. In the event Executive files
a charge or complaint with a Government Agency, or a Government Agency asserts a claim on Executive’s behalf, Executive agrees
that his release of claims in this Agreement shall nevertheless bar Executive’s right (if any) to any monetary or other recovery
(including reinstatement), except that Executive does not waive: (i) Executive’s right to receive an award from the Securities
and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934, and (ii) any other right where waiver is
expressly prohibited by law.

 

(c)               
Executive agrees not to institute, nor has Executive instituted, a lawsuit against any Released Company Party based
on any waived claims or rights as set forth above.

 

(d)              
EXCEPT AS OTHERWISE PROVIDED HEREIN, EXECUTIVE ACKNOWLEDGES AND AGREES THAT THIS RELEASE IS A FULL AND FINAL BAR
TO ANY AND ALL CLAIM(S) OF ANY TYPE THAT EXECUTIVE MAY NOW HAVE AGAINST ANY RELEASED COMPANY PARTY.

 

    A-2

     

    

2.                 
Injunctive Relief. The parties hereto recognize that irreparable injury will result to CNOB, their
businesses and properties in the event of Executive’s breach of any covenants or agreements contained herein. CNOB will be
entitled, in addition to any other remedies and damages available to it, to an injunction prohibiting Executive from committing
any violation or threatened violation of this Agreement.

 

3.                 
General Provisions.

 

(a)               
Heirs, Successors and Assigns. The terms of this Agreement will be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.

 

(b)              
Final Agreement. This Agreement represents the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior understandings, written or oral. The terms of this Agreement may be changed, modified or
discharged only by an instrument in writing signed by the parties hereto.

 

(c)               
Governing Law. This Agreement will be construed, enforced and interpreted in accordance with and governed
by the laws of the State of New Jersey, without reference to its principles of conflicts of law.

 

(d)              
Counterparts. This Agreement may be executed in one or more counterparts, each of which counterpart, when
so executed and delivered, will be deemed an original and all of which counterparts, taken together, will constitute but one and
the same agreement.

 

(e)               
Severability. Any term or provision of this Agreement which is held to be invalid or unenforceable will be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement.

 

IN WITNESS WHEREOF,
the parties hereto have signed this Agreement on the dates set forth below and Executive hereby declares that the terms of this
Agreement have been completely read, are fully understood, and are voluntarily accepted after complete consideration of all facts
and legal claims.

 

PLEASE READ CAREFULLY. THIS AGREEMENT
INCLUDES A RELEASE OF CERTAIN KNOWN AND UNKNOWN CLAIMS. CNOB HEREBY ADVISES EXECUTIVE TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING
THIS AGREEMENT.

 

	 	 	 
	 	 	 
	Date	 	EXECUTIVE

 

 

 

A-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]