Exhibit 10.1

November 9, 2007

BY HAND AND U.S. MAIL

Mr. Phillip R. Burnaman

222 Nod Hill Road

Wilton, Connecticut 06897

Dear Mr. Burnaman:

This letter confirms our agreement relating to your separation from employment
with NewStar Financial, Inc. (the “Company”).

1. In consideration of the terms of this agreement, the Company is terminating
your employment without “Cause” (as such term is defined under the employment
agreement between you and the Company dated December 8, 2006 (the “Employment
Agreement”)) and your employment with the Company shall end effective as of the
close of business, December 1, 2007 (the “Separation Date”). Any position you
hold as an officer or director of the Company or any of its subsidiaries or
affiliates, and/or any position as a member of any committees of the Board of
the Company or any of its subsidiaries or affiliates shall end by your
resignation effective as of the Separation Date. You agree to sign such
documents as the Company may reasonably request to effectuate such resignations.

2. In addition to any salary payments owing for the final payroll period through
the Separation Date and whatever vested rights you may have under the Company
401(k) plan, you shall receive the following payment(s) and benefits for the
periods indicated, less any payroll deductions required by law, which shall be
in lieu of any other payments or benefits (including vacation or other paid
leave time) to which you otherwise might be entitled:

a. Continuation of your annual base salary, payable in accordance with the
Company’s regular payroll practices, commencing after the Separation Date and
not less than ten (10) days after the Second Release (as defined in Paragraph 4
below) is signed and returned to the Company, and continuing until one year from
the Separation Date (the “Severance Period”), which each such payment hereby
designated as a separate payment;

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b. Payment of a one-time lump sum amount of $450,000, to be paid on June 2,
2008;

c. Accrued but unused vacation time and any unreimbursed expenses incurred by
you through the Separation Date which would be owing in accordance with Company
policies, to be paid within 10 days of the Separation Date;

d. Continuation of your eligibility and your dependents’ eligibility (to the
extent they participated immediately prior to the Separation Date) to
participate in the Company’s health care benefits plan (subject to the same
terms and conditions as other employees of the Company including all employee
contributions, co-pays and deductibles) until the earlier of (i) the expiration
of the Severance Period or (ii) the date on which you commence other employment
and become eligible to participate in that employer’s health care benefits
plans; and

e. Reimbursement by the Company for up to $10,000 for the cost of outplacement
services during the Severance Period, to be paid in a lump sum during the first
payroll period after the Separation Date and not less than ten (10) days after
the Second Release is signed and returned to the Company;

f. Accelerated vesting of the Restricted Stock and RSA Options (each as defined
in the Amended and Restated RSA) granted to you pursuant to the Amended and
Restated Restricted Stock Agreement dated December 13, 2006 (the “Amended and
Restated RSA”), such that all Restricted Stock and RSA Options granted under
that agreement shall be deemed, respectively, Non-Forfeitable Shares (as defined
in the Amended and Restated RSA) and fully vested as of the Separation Date; and

g. Accelerated vesting of the Restricted Stock (as defined in the IPO RSA)
granted to you pursuant to the Restricted Stock Agreement dated December 13,
2006 (the “IPO RSA”), such that thirty percent (30%) of the Restricted Stock
granted pursuant to that agreement shall be deemed Non-Forfeitable Shares (as
defined in the IPO RSA) as of the Separation Date; and

h. A period of ninety (90) days following the expiration of the Severance Period
to exercise any vested options (or, if earlier, up to the original term of the
vested options).

Unless otherwise expressly provided herein, any payment of compensation by the
Company to you, whether pursuant to this letter agreement or otherwise, shall be
made within two and one-half months (2 1/2 months) after the later of the end of
the calendar year or the Company’s fiscal year in which your right to such
payment vests (i.e., is not subject to a “substantial risk of forfeiture” for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”)). To the extent that any amounts come within the definition of
“involuntary separation” under Code Section 409A, such amounts up to the lesser
of two times your annual compensation for the year preceding the year of
termination or two times the 401(a)(17) limit for the year of termination, shall
be excluded from “deferred compensation” as allowed under Code Section 409A, and
shall not be subject to the Code Section 409A compliance requirements set forth

 

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herein. Neither party individually or in combination with each other (or any
other party) may accelerate any such deferred payment, except in compliance with
Code Section 409A, and no amount shall be paid prior to the earliest date on
which it is permitted to be paid under Code Section 409A. In the event that you
are determined by the Company (such determination to be conclusive and binding
as between the parties) to be a “specified employee” (as defined in Code
Section 409A(a)(2)(B)(i) and determined in accordance with Code Section 416(i)
(without regard to paragraph (5) thereof)) of the Company at a time when its
stock is deemed to be publicly traded on an established securities market,
payments determined to be “nonqualified deferred compensation” payable following
termination of employment shall be made no earlier than the earlier of (i) the
first day of the seventh (7th) month following such termination of employment,
or (ii) your death, consistent with the provisions of Code Section 409A. Any
payment delayed by reason of the prior sentence shall be paid out in a single
lump sum at the end of such required delay period and any other payments shall
be paid in accordance with the original payment schedule.

3. Upon expiration of the Severance Period during which you and your covered
dependents will continue to be eligible to participate in the Company’s health
care benefits plan, or such earlier date when you become eligible to participate
in the health care benefits plans of a new employer, the Company will afford you
and your covered dependents the opportunity, at your own expense, to receive
“continuation coverage” under COBRA, continuing for so long as required by law.
The Company shall provide you and your covered dependents with a separate notice
describing your rights under COBRA.

4. In consideration of the terms hereof, you have agreed to and do waive any
claims you may have for employment by the Company and have agreed not to seek
such employment or reemployment by the Company in the future. You have further
agreed to and do release and forever discharge the Company, its parent,
subsidiaries and affiliates and their respective past and present officers,
directors, shareholders, employees and agents from any and all claims and causes
of action, known or unknown, arising out of or relating to your employment by
the Company or the termination thereof, including, but not limited to wrongful
discharge, breach of contract, tort, fraud, defamation, and any rights or claims
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Employee Retirement
Income Security Act, the Family Medical Leave Act, the Connecticut Fair
Employment Practices Act, the Connecticut Human Rights and Opportunities Act,
the Massachusetts Fair Employment Practices Act, the Massachusetts Civil Rights
Act, and any other federal, state or local law relating to employment,
discrimination in employment, termination of employment, wages, benefits or
otherwise. This release does not include (i) your right to enforce the terms of
this agreement, (ii) any right you may have to indemnification by the Company
for actions taken prior to the Separation Date, and (iii) any right you have
under any Company employee benefit plan (as such term is defined under
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended). As a condition to the commencement of the payments and benefits
described in Paragraph 2 above, you agree to execute a general release of claims
co-extensive with the release set forth above in this Paragraph 4, but updated
to include the period between the effective date of this letter and the
Separation Date (the “Second Release”). The Second Release shall be in the form
attached hereto as Exhibit A.

 

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5. You agree to return to the Company on or prior to the Separation Date all
Company property and documents in your possession, custody or control,
including, without limitation, automobiles, credit cards, computers and
telecommunication equipment, keys, instructional and policy manuals, mailing
lists, computer software, financial and accounting records, reports and files,
and any other physical or personal property which you obtained in the course of
your employment by the Company, and you further agree not to retain copies of
any such Company documents, excluding publicly available documents and documents
relating directly to your own compensation and employee benefits.

6. You acknowledge that your contractual obligations set forth in Section 7 of
the Employment Agreement regarding Confidential Information, as defined therein,
shall continue in full force and effect after the Separation Date. You
acknowledge that in the course of your employment with the Company, you acquired
Confidential Information and you agree that you will keep such Confidential
Information confidential at all times after your employment terminates, and you
will not make use of such Confidential Information on your own behalf, or on
behalf of any third party.

7. You acknowledge and confirm that you have continuing obligations to the
Company that survive the termination of your employment pursuant to Sections 7
and 8(a) of the Employment Agreement, the Amended and Restated RSA (other than
Section 6(a)(A) of such agreement), the IPO RSA (other than Section 6(a)(A) of
such agreement) and the Lock Up Agreement dated December 13, 2006 (the “Lock Up
Agreement”). The Company acknowledges and confirms that it has continuing
obligations to you that survive the termination of your employment pursuant to
Sections 9 and 20(c) of the Employment Agreement to the extent that a claim
arises for actions taken prior to the Separation Date.

8. You agree that following your execution of this agreement, not to disparage
or induce or encourage others to disparage the Company, its services, its
products or any of its current or former affiliates, members, offices,
directors, employees or agents. The Company agrees that following your execution
of this agreement, not to disparage or induce or encourage others to disparage
you.

9. You agree to maintain the terms of this agreement confidential unless
otherwise required by law; provided, however, that you may disclose the terms of
this agreement to your immediate family members and to your attorneys,
accountants, financial or tax advisors.

10. You agree that following your execution of this agreement, at the Company’s
reasonable request, you shall assist and advise the Company in any investigation
which may be performed by the Company or any governmental agency and any
litigation in which the Company may become involved. Such assistance shall
include you making yourself reasonably available for interviews by the Company
or its counsel, deposition and/or court appearances at the Company’s request.
The Company shall attempt to schedule such assistance at mutually convenient
times and places, taking into account any employment constraints that you may
have. The Company shall promptly reimburse you for reasonable expenses, such as
telephone, travel, lodging and meal expenses, incurred by you at the Company’s
request, consistent with the Company’s generally applicable policies for
employee expenses. To the maximum extent permitted by law, you agree that you
will notify Head of Human Resources if you are contacted by any governmental
agency, or by any person contemplating or maintaining any claim or legal action
against the Company, or by any agent or attorney of such person, within three
business days of such contact.

 

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11. Neither by offering to make nor by making this agreement does either party
admit any failure of performance, wrongdoing, or violation of law. In addition,
you shall not have any duty to find new employment following the Separation Date
and, other than with respect to the continuation of your health care benefits
pursuant to paragraph 2(d), any payment made to you by the Company under this
agreement shall not be reduced by any compensation or benefits received by you
from a third party for the providing of personal services (whether by employment
or by functioning as an independent contractor) following the Separation Date.

12. This agreement, including the Second Release, sets forth the entire
understanding of the parties and supersedes any and all prior agreements, oral
or written, relating to your employment by the Company or the termination
thereof; provided, however, that Sections 7 and 8(a) of the Employment
Agreement, regarding Confidential Information and Restrictive Covenants,
respectively, the Amended and Restated RSA (other than Section 6(a)(A) of such
agreement), the IPO RSA (other than Section 6(a)(A) of such agreement), and the
Lock Up Agreement shall continue in full force and effect. This agreement may
not be modified except by a writing, signed by you and by a duly authorized
officer of the Company. This agreement shall be binding upon your heirs and
personal representatives, and the successors and assigns of the Company.

13. This agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without regard to its choice of law
rules.

14. You agree that any controversy or claim arising out of or relating to this
letter agreement, the employment relationship between you and the Company, or
the breach thereof, including the arbitrability of any controversy or claim,
which cannot be resolved amicably after a reasonable attempt to negotiate such a
resolution, shall be submitted to arbitration in the Commonwealth of
Massachusetts in accordance with the Commercial Dispute Resolution Rules of the
American Arbitration Association, as such rules may be amended from time to
time. The award of the arbitrator shall be final and binding upon you and the
Company, and judgment may be entered with respect to such award in any court of
competent jurisdiction. All references to judicial enforcement or relief in the
Amended and Restated RSA, the IPO RSA and the Lock Up Agreement shall be deemed
to reference enforcement or relief in arbitration.

15. You acknowledge that before entering into this agreement, you have had the
opportunity to consult with any attorney or other advisor of your choice, and
you are hereby advised to do so if you choose. You further acknowledge that you
have entered into this agreement of your own free will, and that no promises or
representations have been made to you by any person to induce you to enter into
this agreement other than the express terms set forth herein. You further
acknowledge that you have read this agreement and understand all of its terms,
including the waiver and release of claims set forth in Paragraph 4 above.

 

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If the foregoing is acceptable to you, please sign the annexed copy of this
agreement and return it to me. You may take up to twenty-one (21) days from
today to consider, sign and return this agreement. In addition, you may revoke
the agreement after signing it, but only by delivering a signed revocation
notice to me within seven (7) days of your signing this agreement. This
agreement shall not become effective or enforceable until this seven day
revocation period expires without you having revoked this agreement.

 

Very truly yours, /s/ Colleen M. Banse Colleen M. Banse Vice President, Human
Resources

 

Accepted and Agreed: /s/ Phillip R. Burnaman Phillip R. Burnaman November 11,
2007 Date

 

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Exhibit A

Second Release Agreement

WHEREAS, NewStar Financial, Inc. (the “Company”) and Phillip R. Burnaman (the
“Executive”) entered into an agreement dated November 9, 2007 (the “Separation
Agreement”);

WHEREAS, this Second Release formed a part of the Separation Agreement, was
expressly incorporated therein, and was attached as Exhibit A to the Separation
Agreement, and whereas this Second Release served as consideration for the
Company to enter into the Separation Agreement;

NOW THEREFORE, in consideration of the mutual promises and mutual covenants
contained herein and in the Separation Agreement, the parties agree as follows:

1. In consideration of the payments and benefits set forth in the Separation
Agreement, Executive agrees to and does waive any claims he may have for
employment by the Company and agrees not to seek such employment or reemployment
by the Company in the future. Executive further agrees to and does release and
forever discharge the Company, its parent, subsidiaries and affiliates and their
respective past and present officers, directors, shareholders, employees and
agents from any and all claims and causes of action, known or unknown, arising
out of or relating to his employment by the Company or the termination thereof,
including, but not limited to wrongful discharge, breach of contract, tort,
fraud, defamation, and any rights or claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act, the Family
Medical Leave Act, the Connecticut Fair Employment Practices Act, the
Connecticut Human Rights and Opportunities Act, the Massachusetts Fair
Employment Practices Act, the Massachusetts Civil Rights Act, and any other
federal, state or local law relating to employment, discrimination in
employment, termination of employment, wages, benefits or otherwise. This
release does not include (i) Executive’s right to enforce the terms of the
Separation Agreement, (ii) any right Executive may have to indemnification by
the Company for actions taken prior to the Separation Date, and (iii) any right
Executive may have under any Company employee benefit plan (as such term is
defined under Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended).

 

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2. Executive acknowledges that before signing this Second Release, he has had
the opportunity to consult with any attorney or other advisor of his choice, and
has been advised by the Company (through this document) to do so if he chooses.
The Executive further acknowledges that he has signed this Second Release of his
own free will, and that no promises or representations have been made to him by
any person to induce him to sign this Second Release other than the express
terms set forth herein and in the Separation Agreement. Executive further
acknowledges that he has read this Second Release and understands all of its
terms, including the waiver and release of claims set forth in paragraph 1
above.

3. Executive acknowledges that he has had twenty-one days from receipt thereof
to consider, sign and return this Second Release to the Company, although he may
do so earlier at his discretion. The Executive may revoke this Second Release
after signing and delivering it to the Company, but only by delivering a signed
revocation notice to the Company (Attention: Colleen M. Banse at 500 Boylston
Street Suite 1600 Boston MA 02116) within seven days of the date he signed the
Second Release as indicated below. This Second Release is not effective and
enforceable until the seven-day revocation period has expired without Executive
having revoked. If Executive revokes this Second Release after Executive
receives any payment described in Paragraph 2 of the Separation Agreement,
Executive shall return to the Company the entire amount paid to Executive under
the terms of the Separation Agreement within seven calendar days of the
revocation, and shall not be entitled to any further payments under the
Separation Agreement.

IN WITNESS WHEREOF, Executive has executed this Second Release as of the date
below.

 

   Phillip R. Burnaman

Date: __________________________

 

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