Document:

ex101121514

Exhibit 10.1
	
		
	Citibank, N.A.
390 Greenwich Street
New York, New York 10013
	

Execution Copy

		
	Date:
	December 4, 2014 (amended and restated as of December 15, 2014)

		
	To:
	NewStar TRS I LLC 

c/o NewStar Financial, Inc.
500 Boylston Street 
Suite 1250
Boston, MA  02116
Attention:  Operations Group
Facsimile:  12142914344@docs.ldsprod.com

		
	From:
	Citibank, N.A. 
388 Greenwich Street 
11th Floor 
New York, New York 10013 
Attention:  Director Derivative Operations 
Facsimile:  212-615-8594

Transaction Reference Number:     [__________]
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of the Transactions entered into between Citibank, N.A. ("Citibank") and NewStar TRS I LLC, a limited liability company formed under the law of the State of Delaware ("Counterparty"), on the Trade Date specified below (each, a "Transaction" and, collectively, the "Transactions").  This letter constitutes a "Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions (the "Definitions"), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation.  In the event of any inconsistency between the Definitions and this Confirmation, this Confirmation shall govern.  Capitalized terms used but not defined in this Confirmation have the meanings assigned to them in Annex A.  Capitalized terms used but not defined in this Confirmation or in Annex A have the meanings assigned to them in the Definitions.
With effect from and after the Amendment Effective Date specified below, this Confirmation amends and restates the prior Confirmation dated December 4, 2014 between Citibank and Counterparty (the "Original Confirmation") relating to the Transactions described herein, which Original Confirmation (with respect to the period from and after the Amendment Effective Date) is hereby superseded and shall be of no further force or effect.
1.    AGREEMENT
This Confirmation supplements, forms a part of and is subject to, the ISDA 2002 Master Agreement, dated as of December 4, 2014 (as amended, supplemented and otherwise modified and in effect from time to time, the "Master Agreement"), between Citibank and Counterparty.  All provisions contained in the Master Agreement govern this Confirmation except as expressly modified below.

2.    TERMS OF TRANSACTIONS
The terms of the particular Transactions to which this Confirmation relates are as follows:
	
		
	General Terms:
	 

	Trade Date:
	December 4, 2014

	Effective Date:
	December 4, 2014

	Amendment Effective Date:
	December 15, 2014

	Scheduled Termination Date:
	The latest date for the final scheduled payment (or, if there is only one scheduled payment, for the scheduled payment) of principal of any Reference Obligation at any time included in the Reference Portfolio.

	Termination Date:
	The final Scheduled Settlement Date (as defined in the Master Agreement) with respect to all Transactions.  The obligations of the parties to make payments required to be made hereunder shall survive the Termination Date.

	Obligation Termination Date:
	(a) In relation to any Repaid Obligation, the related Repayment Date; and
(b) In relation to any Terminated Obligation, the related Termination Settlement Date.

	Reference Portfolio:
	As of any date of determination, all Reference Obligations with respect to all Transactions outstanding on such date.

	Reference Obligation:
	Each obligation listed on Annex I (as revised from time to time in accordance with this Confirmation) having a Reference Amount equal to the "Reference Amount" indicated on Annex I for such obligation (and, in the case of a Committed Obligation, having an Outstanding Principal Amount equal to the "Outstanding Principal Amount" indicated on Annex I for such Committed Obligation), in each case, subject to adjustment by the Calculation Agent in accordance with the terms of this Confirmation.

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	Counterparty may, by notice to Citibank on any Business Day (each, an "Obligation Trade Date"), on or after the Trade Date designate that any obligation (each, a "Reference Obligation") shall become the subject of a Transaction hereunder.  Any such notice shall specify the proposed Reference Obligation, Reference Entity, Reference Amount and Initial Price in relation to such Transaction.
Notwithstanding the foregoing, no such designation by Counterparty will be effective unless (a) Citibank, in its sole discretion, consents on or prior to the Obligation Trade Date to the relevant Reference Obligation becoming the subject of a Transaction hereunder with effect as set forth in the immediately succeeding paragraph and (b) on the Obligation Trade Date the relevant Reference Obligation satisfies the Obligation Criteria set forth in Annex II.
On the Obligation Trade Date for a Transaction, the Reference Amount of such Transaction shall, for all purposes hereof other than calculating Rate Payments, be increased by the "Reference Amount" specified in such notice from Counterparty.  The "Obligation Settlement Date" for a Transaction shall be the date following the Obligation Trade Date for such Transaction that is customary for settlement of the related Reference Obligation substantially in accordance with the then-current market practice in the principal market for the related Reference Obligation (as determined by the Calculation Agent).  On the Obligation Settlement Date for a Transaction, the Reference Amount of such Transaction shall, solely for the purposes of calculating Rate Payments, be increased by the "Reference Amount" specified in such notice from Counterparty.
Not later than one Business Day after the related Obligation Trade Date, Citibank shall prepare and deliver to Counterparty a revised Annex I reflecting the Reference Portfolio as of the related Obligation Trade Date.
If any payment of interest on a Reference Obligation that would otherwise be made during the period from and including the Obligation Trade Date to but excluding the Termination Trade Date is not made but is capitalized as additional principal (without default), then the amount of interest so capitalized as principal shall become a new Transaction hereunder (a "PIK Transaction") having the same terms and conditions as the Transaction relating to the Reference Obligation in respect of which such interest is capitalized, except that (1) the Initial Price in relation to such PIK Transaction shall be zero, (2) the Obligation Trade Date and Obligation Settlement Date for such PIK Transaction shall be the date on which such interest is capitalized and (3) the Reference Amount of such PIK Transaction will be the amount of interest so capitalized as principal.  Citibank shall give notice to Counterparty after a PIK Transaction becomes outstanding as provided above, which notice shall set forth the information in the foregoing clauses (2) and (3).

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	Reference Entity:
	The borrower of the Reference Obligation identified as such in Annex I (as revised from time to time in accordance with this Confirmation).  In addition, "Reference Entity", unless the context otherwise requires, shall also refer to any guarantor of or other obligor on the Reference Obligation.

	Ramp-Up Period:
	The period from and including the Effective Date and ending on and including the date 90 days after the Effective Date.

	Ramp-Down Period:
	The period from and including the date 30 days prior to the Scheduled Termination Date and ending on and including the Scheduled Termination Date.

	Portfolio Notional Amount:
	As of any date of determination, the sum of the Notional Amounts for all Reference Obligations as of such date.

	Notional Amount:
	(a) In relation to any Transaction (other than in relation to any Terminated Obligation or Repaid Obligation), as of any date of determination, the Reference Amount of the related Reference Obligation as of such date multiplied by the Initial Price in relation to such Reference Obligation; and
(b) In relation to any Terminated Obligation or Repaid Obligation, the amount of the reduction in the Reference Amount of the related Reference Obligation determined, in the case of a Terminated Obligation, pursuant to Clause 3 or, in the case of a Repaid Obligation, pursuant to Clause 5, in each case multiplied by the Initial Price in relation to the related Reference Obligation.

	Outstanding Principal Amount:
	In relation to any Reference Obligation as of any date of determination, the outstanding principal amount of such obligation as shown in the then-current Annex I, as increased pursuant to this Clause 2 (or, in the case of any Committed Obligation, pursuant to any borrowing in respect of such Committed Obligation after the Obligation Settlement Date) and reduced pursuant to Clauses 3 and 5.  Except as otherwise expressly provided below with respect to Counterparty First Floating Amounts, the Outstanding Principal Amount of any Committed Obligation on any date shall include the aggregate stated face amount of all letters of credit, bankers' acceptances and other similar instruments issued in respect of such Committed Obligation to the extent that the holder of such Committed Obligation is obligated on such date to extend credit under any such letter of credit, bankers' acceptance or other similar instrument following any subsequent drawing or other similar payment thereunder.

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	Commitment Amount:
	In relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of determination, the maximum outstanding principal amount of such Reference Obligation that a registered holder thereof would on such date be obligated to fund (including all amounts previously funded and outstanding on such date of determination, whether or not such amounts, if repaid, may be reborrowed).

	Notional Funded Amount:
	In relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of determination, the greater of (a) zero and (b) the sum of (i) the Outstanding Principal Amount of such Reference Obligation as of the Obligation Trade Date multiplied by the Initial Price minus (ii) the product of (x) the excess, if any, of the Commitment Amount of such Reference Obligation as of the Obligation Trade Date over the Outstanding Principal Amount of such Reference Obligation as of the Obligation Trade Date multiplied by (y) 100% minus the Initial Price plus (iii) any increase in the Outstanding Principal Amount of such Reference Obligation during the period from but excluding the Obligation Trade Date to and including such date of determination minus (iv) any decrease in the Outstanding Principal Amount of such Reference Obligation during the period from but excluding the Obligation Trade Date to and including such date of determination.
In relation to any Reference Obligation that is a Term Obligation (and the related Transaction) as of any date of determination, the Notional Amount of such Reference Obligation.

	Portfolio Notional Funded Amount:
	As of any date of determination, the aggregate of all Notional Funded Amounts with respect to all Reference Obligations in the Reference Portfolio on such date of determination.

	Reference Amount:
	In relation to (a) any Term Obligation (and the related Transaction), the Outstanding Principal Amount of such Term Obligation and (b) any Committed Obligation (and the related Transaction), the Commitment Amount of such Committed Obligation.

	Utilization Amount:
	In relation to any Calculation Period, the daily average of the Portfolio Notional Funded Amount during such Calculation Period.

	Maximum Portfolio Notional Amount:
	USD125,000,000, or such greater amount as the parties may agree to in writing.

	Minimum Portfolio Notional Amount:
	On any date of determination, 85% of the Maximum Portfolio Notional Amount in effect on such date.

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	Business Day:
	New York.

	Business Day Convention:
	Following (which shall apply to any date specified herein for the making of any payment or determination or the taking of any action which falls on a day that is not a Business Day).
If any anniversary date specified herein would fall on a day on which there is no corresponding day in the relevant calendar month, then such anniversary date shall be the last day of such calendar month.

	Monthly Period:
	Each period from but excluding the 15th day of any calendar month to and including the same day of the immediately succeeding calendar month.

	Calculation Agent:
	Citibank; provided that, if an Event of Default under Section 5(a)(i) or 5(a)(vii) shall have occurred and be continuing, then a Dealer selected by Counterparty in good faith that is acceptable to Citibank and not an Affiliate of either party shall be the Calculation Agent so long as no Event of Default with respect to Counterparty shall have occurred and be continuing.  Unless otherwise specified, the Calculation Agent shall make all determinations, calculations and adjustments required pursuant to this Confirmation in good faith and on a commercially reasonable basis.

	Calculation Agent City:
	New York

	Initial Price:
	In relation to any Reference Obligation (and the related Transaction), the Initial Price specified in Annex I (as revised from time to time in accordance with this Confirmation).  The Initial Price proposed by Counterparty and agreed by Citibank as provided in the second paragraph opposite "Reference Obligation" above will be determined as of the related Obligation Trade Date exclusive of accrued interest and will be expressed as a percentage of the Outstanding Principal Amount.  The Initial Price will be determined exclusive of expenses that would be incurred by a buyer in connection with any purchase of the Reference Obligation and exclusive of any Delay Compensation.

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	Unrealized Capital Gain:
	With respect to any Reference Obligation on any date of determination, if (a) the Adjusted Notional Funded Amount on such date of determination exceeds (b) the Notional Funded Amount on such date of determination, then an amount equal to such excess; and, otherwise, zero.  For purposes of computing any Unrealized Capital Gain, a Repaid Obligation or Terminated Obligation will be deemed to continue to be outstanding in an amount equal to its Reference Amount until (but excluding) the related Total Return Payment Date (and after the determination of the related Final Price will have a Current Price equal to such Final Price, expressed as a percentage of the related Outstanding Principal Amount).

	Unrealized Capital Loss:
	With respect to any Reference Obligation on any date of determination, if (a) the Notional Funded Amount on such date of determination exceeds (b) the Adjusted Notional Funded Amount on such date of determination, then an amount equal to such excess; and, otherwise, zero.  For purposes of computing any Unrealized Capital Loss, a Repaid Obligation or Terminated Obligation will be deemed to continue to be outstanding in an amount equal to its Reference Amount until (but excluding) the related Total Return Payment Date (and after the determination of the related Final Price will have a Current Price equal to such Final Price, expressed as a percentage of the related Outstanding Principal Amount).

	Adjusted Notional Funded Amount:
	In relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of determination, the greater of (a) zero and (b) the sum of (i) the Outstanding Principal Amount of such Reference Obligation as of such date of determination multiplied by the Current Price minus (ii) the product of (x) the excess, if any, of the Commitment Amount of such Reference Obligation as of such date over the Outstanding Principal Amount of such Reference Obligation as of such date multiplied by (y) 100% minus the Current Price.
In relation to any Reference Obligation that is a Term Obligation (and the related Transaction) as of any date of determination, the Reference Amount of the related Reference Obligation as of such date multiplied by the Current Price in relation to such Reference Obligation.

	 
	 

	Payments by Counterparty
	 

	Counterparty First Floating Amounts:
	 

	First Floating Amount Payer:
	Counterparty

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	First Floating Amount:
	In relation to any First Floating Rate Payer Payment Date, the sum, for each Transaction for which such date is a First Floating Rate Payer Payment Date, of the products of (a) the First Floating Rate Payer Calculation Amount for such Transaction for the related First Floating Rate Payer Calculation Period multiplied by (b) the Floating Rate Option for such Transaction during the related First Floating Rate Payer Calculation Period plus the Spread multiplied by (c) the Floating Rate Day Count Fraction; provided that, for purposes of the foregoing calculation, the percentage specified in the foregoing clause (b) shall be the Spread (and not the Floating Rate Option plus the Spread) with respect to any portion of a First Floating Rate Payer Calculation Amount constituting the undrawn stated face amount of all letters of credit, bankers' acceptances and other similar instruments issued in respect of a related Committed Obligation.
If the Floating Rate Option or the Spread in relation to any Transaction varies during any First Floating Rate Payer Calculation Period, then the Floating Rate Option or the Spread, as the case may be, for such Calculation Period shall be equal to (a) the sum, for each day during such Calculation Period, of the products of the Notional Funded Amount of such Transaction for such day multiplied by the Floating Rate Option or the Spread, as the case may be, in effect on such day divided by (b) the sum of the Notional Funded Amount of such Transaction on each day during such Calculation Period.

	First Floating Rate Payer
Calculation Amount:
	In relation to any First Floating Rate Payer Payment Date and any Transaction, the daily average of the Notional Funded Amount of such Transaction during the related First Floating Rate Payer Calculation Period.

	First Floating Rate Payer
Calculation Period:
	In relation to any Transaction, each period from and including any date upon which a payment of interest is scheduled or otherwise required to be made on the related Reference Obligation to but excluding the next such date, except that (a) the initial First Floating Rate Payer Calculation Period will commence on, and include, the related Obligation Settlement Date and (b) the final First Floating Rate Payer Calculation Period will end on, but exclude, the related Obligation Termination Date.

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	First Floating Rate
Payer Payment Dates:
	(a) In relation to any Transaction (other than in relation to any Terminated Obligation or Repaid Obligation), the fifth Business Day following the last day of any Monthly Period during which any payment of interest is scheduled or otherwise required to be made on the related Reference Obligation, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last such date occurring prior to the related Obligation Termination Date; and
(b) In relation to any Terminated Obligation or Repaid Obligation, the related Total Return Payment Date.

	Floating Rate Option:
	In relation to any Transaction, the floating rate index specified in the term loan agreement, revolving loan agreement or other similar credit agreement governing the related Reference Obligation (the "Reference Obligation Credit Agreement") that is used to determine the rate of interest payable on such Reference Obligation; provided that (a) if more than one interest rate setting is at any time used to determine the rate of interest payable on a Reference Obligation (i.e., an interest rate election for a specific interest period relating to such Reference Obligation), then a separate First Floating Amount shall be calculated for each portion of such Reference Obligation as to which a separate interest rate setting has been effected, (b) any interest that has accrued to a specified date but is permitted under the Reference Obligation Credit Agreement to be capitalized or deferred as of such date (without default) shall be deemed to be scheduled to be paid on such date, (c) any Reference Obligation Credit Agreement that provides for the payment of interest less frequently than quarterly will be deemed to provide for a scheduled quarterly payment of interest on each date specified by Citibank, which date so specified shall be the calendar day of the month corresponding to other payment dates applicable to the related Reference Obligation and (d) notwithstanding the foregoing, (i) if the floating rate index for such Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then the Floating Rate Option for such Reference Obligation (or such portion) shall equal USD-LIBOR-BBA and (ii) if the floating rate index for such Reference Obligation (or any portion thereof) is subject to the payment of a specified minimum rate regardless of the level of the relevant floating rate index, then the Floating Rate Option will be determined without regard to such specified minimum rate. 

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	Designated Maturity:
	In relation to any Transaction and the related Reference Obligation, the Floating Rate Option will have a Designated Maturity and Reset Dates that correspond to the maturity and reset dates specified in the related Reference Obligation Credit Agreement, except that, if the floating rate index specified in the related Reference Obligation Credit Agreement that is used to determine the rate of interest payable on the Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then for purposes of determining USD-LIBOR-BBA the "Designated Maturity" shall be one month and the first day of each First Floating Rate Payer Calculation Period will be a Reset Date. 

	Spread:
	1.60%

	Floating Rate Day
Count Fraction:
	In relation to any Transaction, the Floating Rate Day Count Fraction will be the day count basis for the computation of interest specified in the related Reference Obligation Credit Agreement, except that, if the floating rate index specified in the related Reference Obligation Credit Agreement that is used to determine the rate of interest payable on the Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then the Floating Rate Day Count Fraction will be Actual/360.

	Reset Dates:
	As set forth in "Designated Maturity" above

	Compounding:
	Inapplicable

	 
	 

	Counterparty Second Floating Amounts:
	 

	Second Floating Amount Payer:
	Counterparty

	Second Floating Amount:
	In relation to any Second Floating Rate Payer Payment Date, the product of (a) the Second Floating Rate Payer Calculation Amount for the related Second Floating Rate Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.
No Second Floating Amount shall be payable, and no amount shall be payable under Clause 4(c), on any date occurring on or after the designation of an Early Termination Date pursuant to Section 6(a) of the Master Agreement by reason of an Event of Default under Section 5(a)(i) or 5(a)(vii) of the Master Agreement in relation to Citibank as the Defaulting Party.

	Second Floating Rate Payer
Calculation Amount:
	In relation to any Second Floating Rate Payer Calculation Period, the excess, if any, of (a) the Minimum Portfolio Notional Amount over (b) the Utilization Amount for such Second Floating Rate Payer Calculation Period.

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	Second Floating Rate Payer
Calculation Period:
	Each Monthly Period; provided that (a) the initial Second Floating Rate Payer Calculation Period shall begin on the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Calculation Period shall end on the last Second Floating Rate Payer Payment Date.

	Second Floating Rate
Payer Payment Dates:
	The fifth Business Day following the last day of each Monthly Period; provided that (a) the initial Second Floating Rate Payer Payment Date will be the first such Business Day after the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Payment Date will be the Scheduled Termination Date (whether or not the Termination Date occurs prior to the final Second Floating Rate Payer Payment Date).

	Spread:
	(a) During the Ramp-Up Period, 0% and (b) after the Ramp-Up Period, 1.60%.

	Floating Rate Day
Count Fraction:
	Actual/360.

	Compounding:
	Inapplicable

	 
	 

	Counterparty Third Floating Amounts:
	 

	Third Floating Amount Payer:
	Counterparty

	Third Floating Amount:
	In relation to any Third Floating Rate Payer Payment Date, the product of (a) the Third Floating Rate Payer Calculation Amount for the related Third Floating Rate Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.
No Third Floating Amount shall be payable, and no amount shall be payable under Clause 4(c), on any date occurring on or after the designation of an Early Termination Date pursuant to Section 6(a) of the Master Agreement by reason of an Event of Default under Section 5(a)(i) or 5(a)(vii) of the Master Agreement in relation to Citibank as the Defaulting Party.

	Third Floating Rate Payer
Calculation Amount:
	In relation to any Third Floating Rate Payer Calculation Period, the excess, if any, of (a) the Maximum Portfolio Notional Amount over (b) the greater of (i) the Utilization Amount for such Third Floating Rate Payer Calculation Period and (ii) the daily average Minimum Portfolio Notional Amount for such Third Floating Rate Payer Calculation Period.

	Third Floating Rate Payer
Calculation Period:
	Each Monthly Period; provided that (a) the initial Third Floating Rate Payer Calculation Period shall begin on the last day of the Ramp-Up Period and (b) the final Third Floating Rate Payer Calculation Period shall end on the last Third Floating Rate Payer Payment Date.

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	Third Floating Rate
Payer Payment Dates:
	The fifth Business Day following the last day of each Monthly Period; provided that (a) the initial Third Floating Rate Payer Payment Date will be the first such Business Day after the last day of the Ramp-Up Period and (b) the final Third Floating Rate Payer Payment Date will be the Termination Date.

	Spread:
	(a) During the Ramp-Up Period, 0% and (b) after the Ramp-Up Period, 0.15%.

	Floating Rate Day
Count Fraction:
	Actual/360.

	Compounding:
	Inapplicable

	 
	 

	Counterparty Fourth Floating Amounts
	 

	Fourth Floating Amount Payer:
	Counterparty

	Fourth Floating Amount:
	Each Expense or Other Payment.

	Fourth Floating Rate
Payer Payment Dates:
	In relation to any Transaction, (a) the fifth Business Day following the last day of each Monthly Period, beginning with the first such Business Day after the Obligation Settlement Date for such Transaction, (b) the related Obligation Termination Date and (c) after the related Obligation Termination Date, the fifth Business Day after notice of a Fourth Floating Amount from Citibank to Counterparty; provided that, prior to the fifth Business Day after the related Obligation Termination Date, if Counterparty has received fewer than five Business Days' notice from Citibank that such Fourth Floating Amount is due and payable, such Fourth Floating Rate Payer Payment Date shall be the fifth Business Day following the last day of the next succeeding Monthly Period.  The obligation of Counterparty to pay Fourth Floating Amounts in respect of any Transaction shall survive the related Obligation Termination Date.

	 
	 

	Counterparty Fifth Floating Amounts:
	 

	Fifth Floating Amount Payer:
	Counterparty

	Fifth Floating Amount:
	In relation to any Terminated Obligation or Repaid Obligation, Capital Depreciation, if any.

	Fifth Floating Rate
Payer Payment Dates:
	Each Total Return Payment Date.

	 
	 

	Payments by Citibank:
	 

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	Citibank Fixed Amounts:
	 

	Fixed Amount Payer:
	Citibank

	Fixed Amount:
	In relation to any Transaction, the Interest and Fee Amount with respect to such Transaction for the related Fixed Amount Payer Payment Date.

	Fixed Amount Payer Calculation Periods:
	In relation to each Reference Obligation in the Reference Portfolio, each period from and including any date upon which a payment of interest is made on such Reference Obligation to but excluding the next such date; provided that (a) the initial Fixed Amount Payer Calculation Period shall commence on and include the Obligation Settlement Date for such Reference Obligation and (b) the final Fixed Amount Payer Calculation Period shall end on, but exclude, the related Obligation Termination Date.

	Fixed Amount Payer Payment Dates:
	(a) In relation to any Transaction (other than in relation to any Terminated Obligation or Repaid Obligation), the fifth Business Day following the last day of any Monthly Period during which any payment of interest is made on the related Reference Obligation, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last such date occurring prior to the related Obligation Termination Date; and
(b) In relation to any Terminated Obligation or Repaid Obligation, the related Total Return Payment Date; provided that, in the case of a Terminated Obligation, if the related Obligation Termination Date occurs on a date other than a date on which interest on the related Reference Obligation is scheduled to be paid, the final Fixed Amount Payer Payment Date shall be the next date on which such interest is scheduled to be paid (subject to any applicable grace period).

	 
	 

	Citibank Floating Amounts:
	 

	Floating Amount Payer:
	Citibank

	Floating Amount:
	In relation to any Terminated Obligation or Repaid Obligation, Capital Appreciation, if any.

	Floating Rate Payer Payment Dates:
	Each Total Return Payment Date.

	 
	 

3.    REFERENCE OBLIGATION REMOVAL; ACCELERATED TERMINATION.

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Reference Obligation Removal
(a)    A Transaction may be terminated in whole by either party (or in part by Counterparty) in accordance with this Clause 3 by the giving of notice (an "Accelerated Termination Notice") to the other party (each such termination, an "Accelerated Termination").
		
	(i)
	Counterparty shall be entitled to terminate any Transaction or any portion thereof by delivering an Accelerated Termination Notice to Citibank that is given (i) on the proposed Termination Trade Date and (ii) no more than 30 days, and no fewer than 10 days, prior to the proposed Termination Settlement Date; provided that the Net Collateral Value Percentage would be greater than or equal to the Termination Threshold (in each case, after giving effect to such termination).  The Accelerated Termination Notice shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date.

		
	(ii)
	Following the occurrence of a Credit Event (as determined by the Calculation Agent) with respect to the related Reference Entity (including any guarantor or other obligor referred to in the definition thereof), Citibank shall, at any time after the Obligation Trade Date for the Reference Obligation, be entitled to propose, by notice to Counterparty, an increased Independent Amount Percentage with respect to the related Transaction. If Counterparty does not, by notice to Citibank within five Business Days after such notice from Citibank, agree to such increase, then Citibank may terminate the related Transaction by delivering an Accelerated Termination Notice to Counterparty that is given (i) on the Termination Trade Date and (ii) no fewer than 10 days prior to the proposed Termination Settlement Date. The Accelerated Termination Notice shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the Termination Trade Date and the Termination Settlement Date.

		
	(iii)
	If Counterparty fails to make, when due, any Transfer required under Clause 9 to be made by Counterparty and Citibank gives notice of such failure to Counterparty, then Citibank shall be entitled to terminate each Transaction that is the subject of this Confirmation by delivering an Accelerated Termination Notice to Counterparty that is given, as to any Terminated Obligation, (i) on the Termination Trade Date and (ii) no fewer than 10 days prior to the proposed Termination Settlement Date.  The Accelerated Termination Notice shall specify, as to each Terminated Obligation, the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the Termination Trade Date and the Termination Settlement Date.

Elective Termination by Citibank due to Portfolio Non-Compliance
(b)    If any Reference Obligation fails to satisfy the Obligation Criteria at any time, then Citibank may notify Counterparty in writing of such non-compliance.  If Counterparty fails to correct such non-compliance within 30 days following Counterparty's receipt of such notice (any such failure to correct such non-compliance, a "Portfolio Non-Compliance"), Citibank will then have the right but not the obligation to terminate each Transaction that is the subject of this Confirmation.  Citibank can exercise this termination right with respect to each Terminated Obligation by delivering an Accelerated Termination Notice to Counterparty that is given, as to any Terminated Obligation, (i) on the Termination Trade Date and (ii) no fewer than 10 days prior to the Termination Settlement Date for the related Terminated Obligation.
Early Termination by Citibank with respect to Citibank Call Date

Page 14

(c)    Citibank will have the right, but not the obligation, to terminate any Transaction that is the subject of this Confirmation or any portion thereof, effective on any Business Day occurring on or after the one-year anniversary of the Effective Date (the "Citibank Call Date").  Citibank can exercise this termination right with respect to any Terminated Obligation by delivering an Accelerated Termination Notice to Counterparty that is given no fewer than 30 days prior to the proposed Termination Trade Date specified in the related Accelerated Termination Notice.  The Accelerated Termination Notice shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date.  If Citibank does not exercise its right to terminate a Transaction that is the subject of this Confirmation on or before the date occurring 30 days prior to the Citibank Call Date, then Citibank will have the right, but not the obligation, to propose, by notice to Counterparty, to amend and restate one or more material terms of such Transaction, including, without limitation, the Spread, the Independent Amount Percentage and the application of the Obligation Criteria to such Transaction.  If Citibank provides a notice to Counterparty proposing to amend and restate one or more material terms of a Transaction as provided above and Counterparty does not agree in writing to such amended and restated terms within 30 days after Citibank provides such notice to Counterparty, such Transaction shall terminate, and the Termination Trade Date shall be such 30th day.  In the event of any such termination, Citibank shall deliver an Accelerated Termination Notice to Counterparty, which shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date.  Even if a Termination Trade Date has been designated with respect to a Transaction or portion thereof pursuant to this Clause 3(c), such designation will not prevent Citibank or Counterparty from subsequently designating an earlier Termination Trade Date to the extent Citibank or Counterparty, as the case may be, is entitled to designate such earlier Termination Trade Date pursuant to this Confirmation.  Notwithstanding anything in this Confirmation to the contrary:
		
	(i)
	if Citibank elects to exercise its termination right under this Clause 3(c) with respect to all Transactions that are then the subject of this Confirmation, then each reference to the term "Scheduled Termination Date" in Clauses 4 (other than Clause 4(c)) and 5 and in the definitions of "Ramp-Down Period" and "Termination Trade Date" will instead be a reference to the date 30 days after the Termination Trade Date specified in such notice; and

		
	(ii)
	whether or not Citibank elects to exercise its termination right under this Clause 3(c), each reference to the term "Scheduled Termination Date" in the definition of "Second Floating Rate Payer Payment Date" (and in the provisions of Clause 4(c) dealing with the payment of the discounted present value of Second Floating Amounts) will be a reference to the Citibank Call Date.

Designation of Early Termination Date
(d)    In the event that an Early Termination Date is designated by either party pursuant to Section 6(a) or 6(b) of the Master Agreement, then, with respect to the Transactions to which this Confirmation relates, (i) the "Final Price" in relation to each Reference Obligation (as if each Reference Obligation were a "Terminated Obligation") shall be determined pursuant to Clause 4(b), (ii) such Early Termination Date shall be the "Termination Trade Date" with respect to each Reference Obligation (as if each Reference Obligation were a "Terminated Obligation"), (iii) each amount that becomes payable by reason of the occurrence of the Termination Trade Date shall be an "Unpaid Amount" and (iv) the foregoing shall not limit the effect of Clause 4(c).
Effect of Termination

Page 15

(e)    With respect to any Transaction terminated in whole pursuant to this Clause 3, (i) as of the relevant Termination Trade Date the Reference Amount, for all purposes hereof other than calculating Rate Payments, shall be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal Amount thereof shall be reduced to zero) and (ii) as of the relevant Termination Settlement Date the Reference Amount, for purposes of calculating Rate Payments, shall be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal Amount thereof shall be reduced to zero).  With respect to any Transaction terminated in part pursuant to this Clause 3, (i) as of the relevant Termination Trade Date the Reference Amount, for all purposes hereof other than calculating Rate Payments, shall be reduced by the amount of the reduction of the Reference Amount specified in the Accelerated Termination Notice (and, in the case of a Committed Obligation, the Outstanding Principal Amount shall be reduced by an amount equal to the product of the Outstanding Principal Amount in effect immediately prior to such reduction multiplied by the amount of the reduction of the Reference Amount divided by the Reference Amount in effect immediately prior to such reduction) and (ii) as of the relevant Termination Settlement Date the Reference Amount, for purposes of calculating Rate Payments, shall be reduced by the amount of the reduction of the Reference Amount specified in the Accelerated Termination Notice (and, in the case of a Committed Obligation, the Outstanding Principal Amount shall be reduced by an amount equal to the product of the Outstanding Principal Amount in effect immediately prior to such reduction multiplied by the amount of the reduction of the Reference Amount divided by the Reference Amount in effect immediately prior to such reduction).  Not later than one Business Day after the related Termination Trade Date (other than the Termination Trade Date in respect of the Termination Date), Citibank shall prepare and deliver to Counterparty a revised Annex I.
4.    FINAL PRICE DETERMINATION
Following the termination of any Transaction in whole or in part pursuant to Clause 3 or by reason of the occurrence of the Scheduled Termination Date (other than in connection with a Repayment), the Final Price in relation to the relevant Terminated Obligation will be determined in accordance with this Clause 4.
Determination by Counterparty
(a)    In order to determine the Final Price in relation to any Terminated Obligation then held by or on behalf of Citibank as a hedge for the related Transaction, Counterparty may arrange for the sale of such Terminated Obligation by giving notice of such sale to Citibank; provided that Counterparty shall have no right to arrange a sale of a Terminated Obligation pursuant to this Clause 4(a) in connection with the termination of a Transaction:  (i) in the case of a termination pursuant to Clause 3(a)(iii) or 3(b); (ii) in the case of a termination pursuant to Clause 3(d) in connection with an Early Termination Date designated by reason of an Event of Default or Credit Event Upon Merger as to which Counterparty is the Defaulting Party or an Additional Termination Event as to which Counterparty is the Affected Party; or (iii) if, as a result of such termination and the termination of all other Transactions as to which the Total Return Payment Date has not yet occurred, (x) the aggregate Value (as defined in the Credit Support Annex) of all Posted Credit Support (as so defined) held by Citibank as Secured Party (as so defined) plus the aggregate of all Citibank Floating Amounts payable in connection with such terminations would be less than (y) the aggregate of all Counterparty Fifth Floating Amounts payable in connection with such terminations.  Such notice must be given at least three Business Days prior to the related Termination Settlement Date in the case of any Terminated Obligation and at least 30 days prior to the Scheduled Termination Date if all Transactions are to be terminated in connection with the Scheduled Termination Date.  Any sale (i) must be to (x) an Approved Buyer or (y) another buyer approved in advance of the Termination Trade Date by Citibank (such approval, in the case of a buyer with which Citibank has approved trading lines and that is not a Counterparty Related Person, not to be unreasonably withheld or delayed) and (ii) must be scheduled to occur no later than the 

Page 16

date customary for settlement, substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation (as determined by the Calculation Agent), following the Termination Trade Date and on or prior to the Scheduled Termination Date if all Transactions are to be terminated in connection with the Scheduled Termination Date.  If Counterparty so arranges any sale, the net cash proceeds received from the sale of any Terminated Obligation, net of the related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b), shall be the "Final Price" in relation to that Terminated Obligation.
Determination by Calculation Agent
(b)    If the Final Price in relation to any Terminated Obligation is not determined according to Clause 4(a), the Calculation Agent shall attempt to obtain Firm Bids for such Terminated Obligation with respect to the applicable Termination Trade Date from three or more Dealers.  The Calculation Agent will give Counterparty notice of its intention to obtain Firm Bids pursuant to this Clause 4(b) (such notice to be given telephonically and via electronic mail) not later than two hours prior to the bid submission deadline specified below.  By notice to Citibank not later than one hour after such notice from the Calculation Agent, Counterparty may, but shall not be obligated to, designate a Dealer of credit standing acceptable to Citibank in the exercise of its reasonable discretion to provide a Firm Bid (and the Calculation Agent will seek a Firm Bid from such Dealer if so designated by Counterparty on a timely basis); provided that any such Firm Bid shall be to purchase the entire Reference Amount of each Terminated Obligation at such time.  A "Firm Bid" shall be a good and irrevocable bid for value, to purchase all or a portion of the applicable Terminated Obligation, expressed as a percentage of the Outstanding Principal Amount and exclusive of accrued interest, for scheduled settlement substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation, as determined by the Calculation Agent, submitted by a Dealer as of 11 a.m. New York time or as soon as practicable thereafter.  If there is more than one Terminated Obligation at any time, then the Calculation Agent may in its sole discretion obtain Firm Bids with respect to each separate Terminated Obligation or any group or groups of such Terminated Obligations.  Citibank may, but is not obligated to, sell or cause the sale of any portion of any Terminated Obligation to any Dealer that provides a Firm Bid.
If the Calculation Agent is unable to obtain from Dealers at least one Firm Bid or combination of Firm Bids for all of the Reference Amount of any Terminated Obligation with respect to the relevant Termination Trade Date, the Calculation Agent will attempt to obtain a Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation from three or more Dealers until the earlier of (i) the second Business Day (inclusive) following such Termination Trade Date and (ii) the date a Firm Bid or combination of Firm Bids is obtained for all of the Reference Amount of such Terminated Obligation.
If the Calculation Agent is able to obtain at least one Firm Bid or combination of Firm Bids for all of the Reference Amount of any Terminated Obligation, the Final Price in relation to such Terminated Obligation shall be determined by reference to such Firm Bid or Firm Bids.  If no Firm Bids are obtained on or before such second Business Day for all or a portion of the applicable Terminated Obligation, the Final Price shall be deemed to be zero with respect to such Terminated Obligation (or portion thereof) for which no Firm Bid was obtained.  The Calculation Agent will conduct the bid process in accordance with the procedures set forth in this Clause 4(b) and otherwise in a commercially reasonable manner.
Notwithstanding anything to the contrary herein,
		
	(i)
	the Calculation Agent shall be entitled to disregard any Firm Bid submitted by a Dealer if, in the Calculation Agent's commercially reasonable judgment, (x) such Dealer may be ineligible to accept 

Page 17

assignment or transfer of the related Terminated Obligation or portion thereof, as applicable, substantially in accordance with the then-current market practice in the principal market for the Terminated Obligation, as determined by the Calculation Agent, or (y) such Dealer would not, through the exercise of its commercially reasonable efforts, be able to obtain any consent required under any agreement or instrument governing or otherwise relating to the related Terminated Obligation to the assignment or transfer of the related Terminated Obligation or portion thereof, as applicable, to it; and
		
	(ii)
	if the Calculation Agent determines that the highest Firm Bid obtained in connection with any Termination Trade Date is not bona fide, including, without limitation, due to (x) the insolvency of the bidder, (y) the inability, failure or refusal of the bidder to settle the purchase of the related Terminated Obligation or portion thereof, as applicable, or otherwise settle transactions in the relevant market or perform its obligations generally or (z) the Calculation Agent provides notice to Counterparty specifying Citibank's reasonable grounds for insecurity concerning the bidder's ability to settle the purchase of the related Terminated Obligation or portion thereof, as applicable,

that Firm Bid shall be disregarded and the Calculation Agent shall designate a new Termination Trade Date; provided that the Calculation Agent shall designate a new Termination Trade Date pursuant to this paragraph only once.  If the highest Firm Bid for any portion of the related Terminated Obligation determined in connection with the second Termination Trade Date is disregarded pursuant to this paragraph, the Calculation Agent shall have no obligation to obtain further bids, and the applicable "Final Price" in relation to the portion which was so disregarded shall be deemed to be zero.
If Citibank transfers, or causes the transfer of, the Terminated Obligation to the Dealer or Dealers providing the highest Firm Bid or combination of Firm Bids, the net cash proceeds received from the sale of such Terminated Obligation (which sale shall be scheduled to settle substantially in accordance with the then-current market practice in the principal market for the related Reference Obligation as determined by the Calculation Agent), net of the related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b), shall be the "Final Price" in relation to that Terminated Obligation (or the portion thereof that is sold).
If Citibank determines, in its sole discretion, not to sell or cause the sale of any portion of any Terminated Obligation to the entity or entities providing the highest Firm Bid or combination of Firm Bids, the "Final Price" in relation to such unsold portion shall be equal to the greater of (a) zero and (b) the sum of (i) the Outstanding Principal Amount of such Terminated Obligation as of the Termination Trade Date multiplied by the highest Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation minus (ii) the product of (x) the excess, if any, of the Commitment Amount of such Terminated Obligation as of the Termination Trade Date over the Outstanding Principal Amount of such Terminated Obligation as of the Termination Trade Date multiplied by (y) 100% minus the highest Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation.  The Calculation Agent may perform any of its duties under this Clause 4(b) through any Affiliate designated by it, but no such designation shall relieve the Calculation Agent of its duties under this Clause 4(b).
Early Termination of Facility
(c)    For the avoidance of doubt, if the Termination Date occurs prior to the Scheduled Termination Date, each Counterparty Second Floating Amount shall continue to be payable by Counterparty on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Scheduled Termination Date; provided that, if either party shall so specify in writing to the other party prior to any final Termination Trade Date, 

Page 18

then on such final Termination Trade Date (i) the obligation of Counterparty to continue to pay each Counterparty Second Floating Amount on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Scheduled Termination Date shall terminate and be replaced by the obligation in the following clause and (ii) Counterparty shall pay to Citibank an amount equal to the present value (as calculated by the Calculation Agent with discounting on a continuous basis) of each Counterparty Second Floating Amount payable (without regard to the termination of such obligation under the foregoing clause) on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Scheduled Termination Date, discounted to such final Termination Trade Date at a discount rate per annum equal to the Discount Rate.  For this purpose, the "Discount Rate" means the zero coupon swap rate (as determined by the Calculation Agent) implied by the fixed rate offered to be paid by Citibank under a fixed for floating interest rate swap transaction with a remaining Term equal to the period from such final Termination Trade Date to the Scheduled Termination Date in exchange for the receipt of payments indexed to USD-LIBOR-BBA.
5.    REPAYMENT.
If all or a portion of the Reference Amount of any Reference Obligation is repaid or otherwise reduced (in the case of a Committed Obligation, only if the Reference Amount thereof is permanently reduced)  (including, without limitation, through any exercise of any right of set-off, reduction, or counterclaim that results in the satisfaction of the obligations of such Reference Entity to pay any principal owing in respect of such Reference Obligation) on or prior to the Scheduled Termination Date (the amount of such repayment or other reduction, a "Repayment"; the portion of the related Reference Obligation so repaid or otherwise reduced, a "Repaid Obligation"; and the date of such Repayment, the "Repayment Date"):
		
	(a)
	the Total Return Payment Date with respect to the Repaid Obligation will be the fifth Business Day next succeeding the last day of the Monthly Period in which the Repayment Date occurred;

		
	(b)
	as of the related Repayment Date, the Reference Amount of such Reference Obligation shall be decreased by an amount equal to the principal amount of the Repaid Obligation; and

		
	(c)
	the related Final Price of the Repaid Obligation shall be (i) in the case of a Committed Obligation, the portion of the Reference Amount that is permanently reduced on such Repayment Date and (ii) in the case of a Term Obligation, the amount of principal and premium in respect of principal paid by such Reference Entity on the Repaid Obligation to holders thereof on such Repayment Date.  Not later than one Business Day after the related Repayment Date, Citibank shall prepare and deliver to Counterparty a revised Annex I showing the revised Reference Amount for the related Reference Obligation.

6.    ADJUSTMENTS.
(a)    If any Reference Obligation or any portion thereof is irreversibly converted or exchanged into or for any securities, obligations, cash or other assets or property ("Exchange Consideration"), thereafter such Exchange Consideration will constitute such Reference Obligation or portion thereof, and the Calculation Agent shall in good faith adjust the terms of any Transaction relating to such Reference Obligation as the Calculation Agent determines appropriate to preserve the theoretical value of such Transaction to the parties immediately prior to such exchange or, if such exchange results in a change in value, the proportionate post-exchange value, and determine the effective date of such adjustments; provided that in no event shall any Reference Obligation or portion thereof include any Exchange Consideration that is not a Bank Eligible Investment.

Page 19

(b)    Delay Compensation (as defined below) shall result in an adjustment (i) as contemplated by the definition of "Interest and Fee Amount" in connection with the establishment by the Citibank Holder of a related hedge in respect of a Transaction, if the actual settlement of the purchase of the related hedge occurs after the date scheduled for the settlement of such purchase and (ii) of a Final Price with respect to a Terminated Obligation in connection with the termination by the Citibank Holder of a related hedge, if the actual settlement of the sale of the related hedge occurs after the date scheduled for the settlement of such sale; provided that Delay Compensation shall be payable in connection with any such termination only to the extent the related Final Price does not already reflect such adjustment for Delay Compensation as determined by the Calculation Agent.  "Delay Compensation" shall accrue (x) in the case of clause (i) above, from and including the date scheduled for the settlement of the purchase effected to establish the related hedge to but excluding the actual settlement of such purchase (and, during such period, (A) the Counterparty First Floating Amount shall be calculated by reference to the Spread and not the Floating Rate Option and (B) Interest and Fee Amounts will be determined without regard to payments in respect of the interest rate index used in the Reference Obligation Credit Agreement to calculate interest payments in respect of the related Reference Obligation and in effect during such period) and (y) in the case of clause (ii) above, from and including the date scheduled for the sale effected to terminate the related hedge to but excluding the actual settlement of such sale (and, during such period, (A) the Counterparty First Floating Amount shall be calculated by reference to the Floating Rate Option and not the Spread and (B) Interest and Fee Amounts shall be reduced by interest accrued during such period in excess of the interest rate index used in the Reference Obligation Credit Agreement to calculate interest payments in respect of the related Reference Obligation and in effect during such period).  In connection with any adjustment by reason of Delay Compensation, (i) any initial Payment Date in this Confirmation determined by reference to the "Obligation Settlement Date" shall be determined as if the Obligation Settlement Date were the actual settlement of the purchase of the related hedge and (ii) any final Payment Date in this Confirmation determined by reference to the "Termination Settlement Date" shall be determined as if the Termination Settlement Date were the actual settlement of the termination of the related hedge.
(c)    If (i) Citibank elects to establish a hedge as a result of the addition or increase in the Reference Amount of any Reference Obligation that is the subject of a Transaction and (ii) the Citibank Holder is unable after using commercially reasonable efforts to effect the settlement of such hedge, then, by notice to Counterparty, Citibank may in its sole discretion, specify that such addition or increase in the Reference Amount of such Reference Obligation will not be effective.
(d)    No amendment or other modification may be made on or after July 16, 2015 to a Transaction relating to a Reference Obligation that is not a Bank Eligible Investment.  In the event that any provision of this Confirmation otherwise provides for any such amendment or other modification, then Clause 3(d) shall be applicable to such Transaction on the date on which such amendment or other modification would have been effected pursuant to such provision (provided that the related Early Termination Date occurring on the date of such amendment or other modification shall occur solely with respect to such Transaction).
7.    REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a)    Each party hereby agrees as follows, so long as either party has or may have any obligation under any Transaction:
		
	(i)
	Non-Reliance.  It is acting for its own account, and it has made its own independent decisions to enter into such Transaction and as to whether such Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary.  It is not relying on any communication (written or oral) of the other party as investment advice or as a 

Page 20

recommendation to enter into such Transaction; it being understood that information and explanations related to the terms and conditions of such Transaction shall not be considered investment advice or a recommendation to enter into such Transaction.  It has not received from the other party any assurance or guarantee as to the expected results of such Transaction;
		
	(ii)
	Evaluation and Understanding.  It is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of such Transaction.  It is also capable of assuming, and assumes, the financial and other risks of such Transaction;

		
	(iii)
	Status of Parties.  The other party is not acting as a fiduciary or an advisor for it in respect of such Transaction; and

		
	(iv)
	Reliance on its Own Advisors.  Without limiting the generality of the foregoing, in making its decision to enter into, and thereafter to maintain, administer or terminate, such Transaction, it will not rely on any communication from the other party as, and it has not received any representation or other communication from the other party constituting, legal, accounting, business or tax advice, and it will consult its own legal, accounting, business and tax advisors concerning the consequences of such Transaction.

(b)    Each party acknowledges and agrees that, so long as either party has or may have any obligation under any Transaction:
		
	(i)
	such Transaction does not create any direct or indirect obligation of any Reference Entity or any direct or indirect participation in any Reference Obligation or any other obligation of any Reference Entity;

		
	(ii)
	each party and its Affiliates may deal in any Reference Obligation and may accept deposits from, make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business with any Reference Entity, any Affiliate of any Reference Entity, any other person or entity having obligations relating to any Reference Entity and may act with respect to such business in the same manner as if such Transaction did not exist and may originate, purchase, sell, hold or trade, and may exercise consensual or remedial rights in respect of, obligations, securities or other financial instruments of, issued by or linked to any Reference Entity, regardless of whether any such action might have an adverse effect on such Reference Entity, the value of the related Reference Obligation or the position of the other party to such Transaction or otherwise;

		
	(iii)
	except as provided in Clause 7(d)(iv), each party and its Affiliates and the Calculation Agent may, whether by virtue of the types of relationships described herein or otherwise, at the date hereof or at any time hereafter, be in possession of information regarding any Reference Entity or any Affiliate of any Reference Entity that is or may be material in the context of such Transaction and that may or may not be publicly available or known to the other party.  In addition, except as provided in Clause 7(b)(vii), this Confirmation does not create any obligation on the part of such party and its Affiliates to disclose to the other party any such relationship or information (whether or not confidential);

		
	(iv)
	neither Citibank nor any of its Affiliates shall be under any obligation to hedge such Transaction or to own or hold any Reference Obligation as a result of such Transaction, and Citibank and its Affiliates may establish, maintain, modify, terminate or re-establish any hedge position or any methodology 

Page 21

for hedging at any time without regard to Counterparty.  Counterparty acknowledges and agrees that it is not relying on any representation, warranty or statement by Citibank or any of its Affiliates as to whether, at what times, in what manner or by what method Citibank or any of its Affiliates may engage in any hedging activities;
		
	(v)
	notwithstanding any other provision in this Confirmation or any other document, Citibank and Counterparty (and each employee, representative, or other agent of Citibank or Counterparty) may each disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to them relating to such U.S. tax treatment and U.S. tax structure (as those terms are used in Treasury Regulations under Sections 6011, 6111 and 6112 of the U.S. Internal Revenue Code of 1986, as amended (the "Code")), other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.  To the extent not inconsistent with the previous sentence, Citibank and Counterparty will each keep confidential (except as required by law) all information unless the other party has consented in writing to the disclosure of such information;

		
	(vi)
	if Citibank chooses to hold a Reference Obligation as a result of any Transaction, Citibank shall hold such Reference Obligation directly or through an Affiliate (the "Citibank Holder"). The Citibank Holder may deal with such Reference Obligation as if the related Transaction did not exist, provided that, so long as the Citibank Holder remains the lender of record with respect to such Reference Obligation, upon any occasion permitting the Citibank Holder to exercise any right in relation to such Reference Obligation to give or withhold consent (an "Election") to an action proposed to be taken (or to be refrained from being taken), the Citibank Holder shall, insofar as permitted under (x) applicable laws, rules and regulations and (y) each provision of any agreement or instrument evidencing or governing such Reference Obligation (and, in the case of any participation interest, governing such participation interest), give its consent to the action proposed to be taken (or to be refrained from being taken), unless (A) Counterparty, by timely notice to Citibank, requests (a "Counterparty Election Request") that the Citibank Holder withhold such consent and (B) the Citibank Holder, in its sole discretion, elects to withhold such consent in accordance with the Counterparty Election Request.  Notwithstanding the foregoing: (1) the Citibank Holder shall have no obligation to respond to, or consult with Counterparty in relation to, a Counterparty Election Request (failure to respond to a Counterparty Election Request being deemed a denial); (2) the Citibank Holder shall have no other duties or obligations to Counterparty of any nature with respect to any Election or any Counterparty Election Request; (3) the Citibank Holder shall not be liable to Counterparty or any of its Affiliates for the consequences of any consent given or withheld by the Citibank Holder in connection with such Reference Obligation (whether or not pursuant to a Counterparty Election Request); and (4) if the Citibank Holder elects in its sole discretion to withhold its consent in accordance with a Counterparty Election Request, the Citibank Holder may subsequently determine to give such consent at any time without notice to Counterparty; and

		
	(vii)
	in connection with each Reference Obligation that is held by a Citibank Holder as a result of any Transaction, the Citibank Holder will promptly (and in any event within one Business Day after receipt) deliver or cause to be delivered to Counterparty the following information and documentation, in each case, to the extent actually received by the Citibank Holder from the Reference Entity or its agents under the related Reference Obligation Credit Agreement:  all notices of any borrowings, prepayments and interest rate settings, all amendments, waivers and other modifications (whether final or proposed) in relation to the terms of the Reference Obligation; and 

Page 22

all notices given by the Reference Entity to the lenders or their agent or by the lenders or their agent to the Reference Entity in relation to the exercise of remedies.
(c)    Each of the parties hereby represents that, on each date on which a Transaction is entered into hereunder:
		
	(i)
	it is entering into such Transaction for investment, financial intermediation, hedging or other commercial purposes; and

		
	(ii)
	(x) it is an "eligible contract participant" as defined in the U.S. Commodity Exchange Act, as amended (the "CEA"), (y) the Master Agreement and each Transaction are subject to individual negotiation by each party, and (z) neither the Master Agreement nor any Transaction will be executed or traded on a "trading facility" within the meaning given to such term in the CEA.

(d)    Counterparty hereby represents to Citibank that:
		
	(i)
	its financial condition is such that it has no need for liquidity with respect to its investment in any Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness.  Its investments in and liabilities in respect of any Transaction, which it understands is not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with any Transaction, including the loss of its entire investment in such Transaction;

		
	(ii)
	it understands that no obligations of Citibank to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any Affiliate of Citibank or any governmental agency;

		
	(iii)
	it is not an Affiliate of any Reference Entity;

		
	(iv)
	as of (x) the relevant Obligation Trade Date and (y) any date on which a sale is effected pursuant to Clause 4(a) or on which the Calculation Agent solicits Firm Bids pursuant to Clause 4(b), neither Counterparty nor any of its Affiliates, whether by virtue of the types of relationships described herein or otherwise, is on such date in possession of information regarding any related Reference Entity or any Affiliate of such Reference Entity that is or may be material in the context of such Transaction or the purchase or sale of any related Reference Obligation unless such information either (x) is publicly available or (y) has been made available to each registered owner of such Reference Obligation on a basis that permits such registered owner to disclose such information to any assignee of or participant (whether on a funded or unfunded basis) in, or any prospective assignee of or participant (whether on a funded or unfunded basis) in, any rights or obligations under the related Reference Obligation Credit Agreement;

		
	(v)
	it is wholly owned by NewStar Financial, Inc., a Delaware corporation (the "Sole Owner"), and is a disregarded entity of the Sole Owner for U.S. Federal income tax purposes;

		
	(vi)
	the Sole Owner is a corporation for U.S. Federal income tax purposes;

		
	(vii)
	it has delivered to Citibank on or prior to the date hereof (and it will, prior to any expiration of any such form previously so delivered, deliver to Citibank) a United States Internal Revenue Service Form W-9 (or applicable successor form) with respect to the Sole Owner, properly completed and 

Page 23

signed (which representation shall also be made for purposes of Section 3(f) of the Master Agreement);
		
	(viii)
	it could have received all payments on the Reference Obligation without U.S. Federal or foreign withholding tax if it owned the Reference Obligation (which representation shall also be made for purposes of Section 3(f) of the Master Agreement); and

		
	(ix)
	it is not, for U.S. Federal income tax purposes, a tax-exempt organization.

(e)    Except for disclosure authorized pursuant to Clause 7(b)(v), Counterparty agrees to be bound by the confidentiality provisions of the related Reference Obligation Credit Agreement with respect to all information and documentation in relation to a Reference Entity or a Reference Obligation delivered to Counterparty hereunder. Counterparty acknowledges that such information may include material non-public information concerning the Reference Entity or its securities and agrees to use such information in accordance with applicable law, including Federal and State securities laws.
(f)    Section 2(c)(ii) of the Master Agreement shall not apply to the Transactions to which this Confirmation relates.
(g)    Notwithstanding anything in the Master Agreement to the contrary, Citibank will not be required to pay any additional amount under Section 2(d)(i) of the Master Agreement in respect of any deduction or withholding for or on account of any Tax in relation to any payment under any Transaction that is determined by reference to interest or fees payable with respect to any Reference Obligation.  If Citibank is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding for or on account of any Tax in relation to any payment under any Transaction that is determined by reference to interest or fees payable with respect to any Reference Obligation and Citibank does not so deduct or withhold, then Section 2(d)(ii) of the Master Agreement shall be applicable.
8.    ADJUSTMENTS RELATING TO CERTAIN UNPAID OR RESCINDED PAYMENTS.
(a)    If (i) Citibank makes any payment to Counterparty as provided under Clause 2 and the corresponding Interest and Fee Amount is not paid (in whole or in part) when due or (ii) any Interest and Fee Amount in respect of a Reference Obligation is required to be returned (in whole or in part) by a holder of such Reference Obligation (including, without limitation, the Citibank Holder) to the applicable Reference Entity or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or insolvency law or any other applicable law, then Counterparty will pay to Citibank, upon request by Citibank, such amount (or portion thereof) so not paid or so required to be returned, paid or otherwise rescinded.  If such returned, paid or otherwise rescinded amount is subsequently paid, Citibank shall pay such amount (subject to Clause 8(c)) to Counterparty within five Business Days after the date of such subsequent payment.
(b)    If, with respect to any Repaid Obligation, the corresponding payment of principal of the Repaid Obligation is required to be returned (in whole or in part) by a holder thereof (including, without limitation, the Citibank Holder) to the applicable Reference Entity or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or insolvency law or any other applicable law, then (i) the parties hereto shall be restored severally and respectively to their former positions hereunder and thereafter all rights and obligations of the parties hereunder shall continue as though no Repayment had occurred and (ii) without limiting the generality of the foregoing, if either party has made a payment to the other party in respect of Capital Appreciation or Capital Depreciation related to such Repayment as provided under Clause 2, then the party that received the payment in respect of such Capital Appreciation or Capital Depreciation, as applicable, shall repay such amount (subject to Clause 8(c)) to the other party.  If such returned, paid or 

Page 24

otherwise rescinded amount is subsequently paid by the related Reference Entity or any such other person or entity, then the relevant party shall pay the amount of such Capital Appreciation or Capital Depreciation, as applicable, within five Business Days after the date of such subsequent payment.
(c)    Amounts payable pursuant to this Clause 8 shall be subject to adjustment by the Calculation Agent in good faith and on a commercially reasonable basis, as agreed by Citibank and Counterparty, in order to preserve for the parties the intended economic risks and benefits of the relevant Transaction.
(d)    The payment obligations of Citibank and Counterparty pursuant to this Clause 8 shall survive the termination of all Transactions.
9.    CREDIT SUPPORT.
Notwithstanding anything in the Credit Support Annex (the "Credit Support Annex") to the Schedule to the Master Agreement to the contrary, the following collateral terms shall apply to each Transaction to which this Confirmation relates (capitalized terms used in this Clause 9 but not otherwise defined in this Confirmation have the respective meanings given to such terms in the Credit Support Annex):
		
	(a)
	With respect to each Transaction to which this Confirmation relates, a single "Independent Amount" shall be applicable to Counterparty in an amount equal to the Notional Amount with respect to such Transaction (or, in the case of any increase of the Notional Amount under any Transaction, the amount of such increase) multiplied by the percentage set forth in Clause 9(b) under the caption "Independent Amount Percentage".  Not later than one Business Day after the Obligation Trade Date with respect to any Transaction (or the date of any increase in the related Independent Amount), Counterparty as Pledgor will Transfer to Citibank as Secured Party Eligible Collateral having a Value as of the date of Transfer equal to the related Independent Amount (or increase in the related Independent Amount) determined pursuant this Clause 9(a).

		
	(b)
	With respect to each Transaction to which this Confirmation relates, the "Independent Amount Percentage" applicable to such Transaction will be equal to:

	
		
	Condition
	Independent Amount Percentage

	(i) Except as indicated in clause (ii) or (iii) below, with respect to any Transaction relating to a Reference Obligation identified in Annex IV
	35%

	(i) Except as indicated in clause (iii) below, with respect to any Transaction relating to a Reference Obligation not identified in Annex IV
	Such percentage as Citibank shall specify on or prior to the Obligation Trade Date for such Transaction

	(iii) With respect to any Transaction relating to a Reference Obligation whose Reference Entity is the subject of a Credit Event
	Such percentage as Citibank shall specify from time to time in its sole discretion in a notice to Counterparty

		
	(c)
	In no event shall Citibank as Secured Party be obligated to Transfer Posted Credit Support in respect of a Return Amount to Counterparty as Pledgor if (i) the Value as of any Valuation Date of all Posted Credit Support Transferred to Citibank as secured party pursuant to Clause 9(a) and not returned to 

Page 25

Counterparty would be less than (ii) the aggregate of all Independent Amounts determined pursuant to Clause 9(a).
		
	(d)
	Solely for the purpose of determining any Delivery Amount or Return Amount pursuant to the Credit Support Annex, in no event shall Counterparty as a Secured Party have any positive "Exposure" to Citibank with respect to the Transactions (in aggregate) to which this Confirmation relates.

		
	(e)
	For purposes of calculating "Exposure" with respect to any Transaction to which this Confirmation relates, (i) Citibank shall be the sole Valuation Agent and shall determine any Market Quotation in relation to such Transaction, (ii) such Market Quotation will be determined by the Valuation Agent using its estimate of the amount that would be paid to or by the Secured Party based on the application of Section 6(e)(ii)(1) of the Master Agreement, (iii) such Market Quotation may from time to time be determined by the Valuation Agent without notice to Counterparty solely in respect of payments in respect of Capital Appreciation or Capital Depreciation that would have been required in respect of a Transaction after the relevant Early Termination Date (provided that the Valuation Agent will not thereafter be precluded from making such determination with respect to all payments and deliveries that would have been required after the relevant Early Termination Date, regardless of the absence of notice thereof to Counterparty) and (iv) if Counterparty disputes the calculation of Exposure with respect to such Transaction, the Valuation Agent will recalculate Exposure for such Transaction on the basis that the market value of the related Reference Obligation is equal to its Current Price.

		
	(f)
	Notwithstanding anything in this Confirmation to the contrary (including in Clause 3(e)), if a Termination Trade Date occurs (i) during the Ramp-Down Period, (ii) because all Transactions are being terminated in connection with the occurrence of the Scheduled Termination Date (including pursuant to Clause 3(c)) or (iii) in connection with a termination of all Transactions at a time when Counterparty may not arrange sales of Terminated Obligations pursuant to Clause 4(a) by reason of the proviso therein, then, for purposes of determining the effect on the Return Amount with respect to the related Terminated Obligation, the Reference Amount of such Terminated Obligation shall not be reduced to zero until the Business Day next succeeding the Termination Settlement Date.  In addition, if Citibank elects to sell or cause the sale of any portion of any Terminated Obligation held to hedge its obligations with respect to a Terminated Transaction and the actual settlement of the sale of the related hedge occurs after the date scheduled for the settlement of such sale, then Exposure will vary from the date scheduled for the settlement of such sale until the date of actual settlement (and, for this purpose, Exposure with respect to any Terminated Obligation shall be determined during such period as if no Final Price had been established until the date of settlement of such sale).

		
	(g)
	If Counterparty enters into any Transaction under the Master Agreement other than the Transactions contemplated by this Confirmation (each, a "Separate Transaction"), then the Credit Support Amount with respect to Counterparty as Pledgor shall never be less than the "Credit Support Amount" with respect to Counterparty as Pledgor calculated (i) solely with reference to all Separate Transactions and (ii) without regard to the aggregate of all Independent Amounts applicable to Counterparty as Pledgor under this Confirmation.

		
	(h)
	Any Transfer required to be made pursuant to this Clause 9 shall be a Transfer made under the Credit Support Annex (and not a payment or delivery made under Section 2(a)(i) of the Master Agreement).

10.    NOTICE AND ACCOUNT DETAILS.

Page 26

	
		
	Notices to Citibank:

	 
	Citibank, N.A., New York Branch
390 Greenwich Street, 4th Floor
New York, New York 10013
Tel:  (212) 723-6181
Fax:  (646) 291-5779
Attn:  Mitali Sohoni

with a copy to:

Office of the General Counsel
Fixed Income and Derivatives Sales and Trading
Citibank, N.A., New York Branch
388 Greenwich Street, 17th Floor
New York, New York 10013
Tel:  (212) 816-2121
Fax:  (646) 862-8431
Attn:  Craig Seledee

	Notices to Counterparty:

	 
	NewStar TRS I LLC
c/o NewStar Financial, Inc.
500 Boylston Street
Suite 1250
Boston, MA  02116
Attention:  Operations Group
Facsimile:  12142914344@docs.ldsprod.com

	Payments to Citibank:

	 
	Citibank, N.A., New York
ABA No.:  021-000-089
Account No.:  00167679
Ref:  Financial Futures

	Payments to Counterparty:

	 
	Bank Name: Wells Fargo Bank, N.A.
Address: Charlotte, NC
ABA#: 121-000-248
Acct Name: NewStar Funding Account
Acct #: 2000035306272
Ref: NewStar TRS I LLC

11.    OFFICES.
		
	(a)
	The Office of Citibank for each Transaction:

New York
(b)    The Office of Counterparty for each Transaction:

Page 27

Boston

Page 28

Please confirm that the foregoing correctly sets forth the terms of our agreement by having a duly authorized officer of Counterparty execute this Confirmation and return the same by facsimile to the attention of the individual at Citibank indicated on the first page hereof.
Very truly yours,
CITIBANK, N.A.

By: /s/ DAVID SANTOS    
 
     Name: David Santos
     Title: Authorized Signatory

CONFIRMED AND AGREED 
AS OF THE DATE FIRST ABOVE WRITTEN:
NEWSTAR TRS I LLC

By: /s/ JOHN J. FRISHKOPF    
 
     Name: John J. Frishkopf
     Title: Treasurer

Page 29

ANNEX A
ADDITIONAL DEFINITIONS
"Affiliate", for purposes of this Confirmation only, has the meaning given to such term in Rule 405 under the Securities Act of 1933, as amended.
"Approved Buyer" means (a) any entity listed in Annex III (as such Annex may be amended by mutual written consent of the parties hereto from time to time) so long as its long-term unsecured and unsubordinated debt obligations on the "trade date" for the related purchase or submission of a Firm Bid contemplated hereby are rated at least "A2" by Moody's and at least "A" by S&P and (b) if an entity listed in Annex III is not the principal banking or securities Affiliate within a financial holding company group, the principal banking or securities Affiliate of such listed entity within such financial holding company group so long as such obligations of such Affiliate have the rating indicated in clause (a) above.
"Capital Appreciation" and "Capital Depreciation" mean, for any Total Return Payment Date, the amount determined according to the following formula for the applicable Terminated Obligation or Repaid Obligation:
Final Price – Applicable Notional Amount
where
"Final Price" means (a) in the case of any Terminated Obligation, the amount determined pursuant to Clause 4, and (b) in the case of any Repaid Obligation, the amount determined pursuant to Clause 5, and
"Applicable Notional Amount" means the Notional Funded Amount (determined immediately prior to the related Repayment Date or Termination Trade Date) for such Terminated Obligation or Repaid Obligation, as applicable.
If such amount is positive, such amount is "Capital Appreciation" and if such amount is negative, the absolute value of such amount is "Capital Depreciation".
"Committed Obligation" means (a) any Delayed Drawdown Reference Obligation and (b) any Revolving Reference Obligation.
"Costs of Assignment" means, in the case of any Terminated Obligation, the sum of (a) any actual costs of transfer or assignment paid by the seller under the terms of any Terminated Obligation or otherwise actually imposed on the seller by any applicable administrative agent, borrower or obligor incurred in connection with the sale of such Terminated Obligation and (b) any reasonable expenses incurred by the seller in connection with such sale and, if transfers of the Terminated Obligation are subject to the Standard Terms and Conditions for Distressed Trade Confirmations, as published by the LSTA and as in effect on the Obligation Trade Date, legal costs incurred by the seller in connection with such sale, in each case to the extent not already reflected in the Final Price.
"Credit Event" means the occurrence of a Bankruptcy or Failure to Pay.  For purposes of the determination of whether a Credit Event has occurred, the Obligation Category will be Borrowed Money, the Payment Requirement will be USD1,000,000 and no Obligation Characteristics will be specified.  Capitalized terms 

Page 30

used in this definition but not defined in this Confirmation shall have the meanings specified in the 2014 ISDA Credit Derivatives Definitions.
"Current Price" means, with respect to any Reference Obligation on any date of determination, the Calculation Agent's determination of the net cash proceeds that would be received from the sale on such date of determination of such Reference Obligation, net of the related Costs of Assignment.  If Counterparty disputes the Calculation Agent's determination of the Current Price of any Reference Obligation, then Counterparty may, no later than three hours after Counterparty is given notice of such determination, designate two Dealers of credit standing acceptable to Citibank in the exercise of its reasonable discretion to provide a Firm Bid to Citibank within such one-hour period.  The highest of such two Firm Bids will be the Current Price.  The "Current Price" shall be expressed as a percentage of par and will be determined exclusive of accrued interest.
"Dealer" means (i) a nationally recognized independent dealer in the related Reference Obligation chosen by the Calculation Agent or its designated Affiliate (other than the Calculation Agent or any of its Affiliates), (ii) any Approved Buyer designated by Counterparty pursuant to Clause 4(b) or (iii) any other entity (other than the Calculation Agent or any of its Affiliates) designated by the Calculation Agent or its designated Affiliate in its sole discretion as a "Dealer" for the purposes of this Confirmation.
"Delayed Drawdown Reference Obligation" means a Reference Obligation that (a) requires the holder thereof to make one or more future advances to the borrower under the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates and (c) does not permit the re‐borrowing of any amount previously repaid; provided that, on any date on which all commitments by the holder thereof to make advances to the borrower under such Delayed Drawdown Reference Obligation expire or are terminated or reduced to zero, such Reference Obligation shall cease to be a Delayed Drawdown Reference Obligation.
"Expense or Other Payment" means the aggregate amount of any payments (other than extensions of credit) due from the lender(s) in respect of any Reference Obligation, including, without limitation, (a) any expense associated with any amendment, modification or waiver of the provisions of a credit agreement, (b) any reimbursement of any agents under the provisions of a credit agreement, and (c) any indemnity or other similar payment, including amounts owed on or after the related Obligation Termination Date in respect of amounts incurred or any event that occurred before the related Obligation Termination Date.
"Interest and Fee Amount" means, for any Citibank Fixed Amount Payer Payment Date and any Transaction, the aggregate amount of interest (including interest breakage costs), fees (including, without limitation, amendment, consent, tender, facility, letter of credit and other similar fees) and other amounts (other than in respect of principal and premium paid in respect of principal) paid with respect to the related Reference Obligation (after deduction of any withholding taxes for which the Reference Entities are not obligated to reimburse holders of the related Reference Obligation, if applicable) during the relevant Citibank Fixed Amount Payer Calculation Period; provided that Interest and Fee Amounts:
		
	(a)
	in the case of "Interest and Accruing Fees" (as defined in the "Standard Terms and Conditions for Par/Near Par Trade Confirmations" or "Standard Terms and Conditions for Distressed Trade Confirmations", as applicable to the relevant Reference Obligation, most recently published by the LSTA prior to the Trade Date), shall not include any amounts that accrue prior to the Obligation Settlement Date for the related Reference Obligation or that accrue on or after the Obligation Termination Date for the related Reference Obligation or portion thereof,

Page 31

		
	(b)
	in the case of "Non-Recurring Fees" (as so defined), shall not include any amounts that (i) are paid with respect to any event occurring prior to the Obligation Trade Date, or on or after the Termination Trade Date, for the related Reference Obligation or portion thereof or (ii) are paid with respect to the related Reference Obligation that is not held by or on behalf of Citibank as a hedge for the related Transaction,

		
	(c)
	shall be determined after deducting all customary and reasonable expenses that would be incurred by a buyer in connection with any purchase of the Reference Obligation as a hedge for such Transaction and, in connection with the establishment by the Citibank Holder of a related hedge in respect of such Transaction and shall be adjusted by any Delay Compensation as provided in Clause 6(b); and

		
	(d)
	in the case of any Transaction as to which the related Reference Obligation is a Committed Obligation, shall include only 75% of fees that are stated to accrue on or in respect of the unfunded portion of any Commitment Amount.

"Loan" means any obligation for the payment or repayment of borrowed money that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement.
"LSTA" means The Loan Syndications and Trading Association, Inc. and any successor thereto.
"Portfolio Target Amount" means (a) during the Ramp-Up Period, the Maximum Portfolio Notional Amount, (b) during the Ramp-Down Period, the Portfolio Notional Amount on the day immediately preceding the first day of the Ramp-Down Period and (c) otherwise, the Portfolio Notional Amount.
"Rate Payments" means Counterparty First Floating Amounts, Counterparty Second Floating Amounts, Counterparty Third Floating Amounts, Counterparty Fourth Floating Amounts and Citibank Fixed Amounts.
"Revolving Reference Obligation" means a Reference Obligation that (a) requires the holder thereof to make one or more future advances to the borrower under the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies a maximum aggregate amount that can be borrowed and (c) permits, during any period on or after the date on which the holder thereof acquires such Reference Obligation, the re‐borrowing of any amount previously repaid; provided that, on the date that all commitments by the holder thereof to make advances to the borrower under such Revolving Reference Obligation expire or are terminated or reduced to zero, such Reference Obligation shall cease to be a Revolving Reference Obligation.
"Second Lien Obligation" means a Loan that is secured by collateral, but as to which the beneficiary or beneficiaries of such collateral security agree for the benefit of the holder or holders of other indebtedness secured by the same collateral ("First Lien Debt") as to one or more of the following:  (1) to defer their right to enforce such collateral security either permanently or for a specified period of time while First Lien Debt is outstanding, (2) to permit a holder or holders of First Lien Debt to sell such collateral free and clear of the security in favor of such beneficiary or beneficiaries, (3) not to object to sales of assets by the obligor on such Loan following the commencement of a bankruptcy or other insolvency proceeding with respect to such obligor or to an application by the holder or holders of First Lien Debt to obtain adequate protection in any such proceeding and (4) not to contest the creation, validity, perfection or priority of First Lien Debt.
"Subordinate" means, with respect to an obligation (the "Subordinated Obligation") and another obligation of the obligor thereon to which such obligation is being compared (the "Senior Obligation"), a contractual, trust or similar arrangement (without regard to the existence of preferred creditors arising by operation of 

Page 32

law or to collateral, credit support, lien or other credit enhancement arrangements or provisions regarding the application of proceeds of any of the foregoing) providing that (i) upon the liquidation, dissolution, reorganization or winding up of the obligor, claims of the holders of the Senior Obligation will be satisfied prior to the claims of the holders of the Subordinated Obligation or (ii) the holders of the Subordinated Obligation will not be entitled to receive or retain payments in respect of their claims against the obligor at any time that the obligor is in payment arrears or is otherwise in default under the Senior Obligation.
"Term Obligation" means any Reference Obligation that is not a Committed Obligation.
"Terminated Obligation" means any Reference Obligation or portion of any Reference Obligation with respect to which the related Transaction (or portion thereof) whose Final Price is determined pursuant to Clause 4.
"Termination Settlement Date" means, for any Terminated Obligation, the date customary for settlement, substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation (as determined by the Calculation Agent), of the sale of such Terminated Obligation with the trade date for such sale occurring on the related Termination Trade Date.
"Termination Trade Date" means, with respect to any Terminated Obligation, the date so designated in the related Accelerated Termination Notice or as provided in Clause 3(e); provided that:
		
	(a)
	except as provided in the following clause (b), if the related Final Price is not determined in accordance with Clause 4(a), the "Termination Trade Date" will be the bid submission deadline for the Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation that are to be the basis for determining the Final Price of such Terminated Obligation as designated by the Calculation Agent in order to cause the related Total Return Payment Date to occur as promptly as practicable (in the discretion of the Calculation Agent) after the date originally designated as the "Termination Trade Date" in the related Accelerated Termination Notice; and

		
	(b)
	in respect of the Scheduled Termination Date, if the related Final Price is not determined in accordance with Clause 4(a), the "Termination Trade Date" will be the date so designated by the Calculation Agent in its discretion, occurring during the 30 calendar days preceding the Scheduled Termination Date (or earlier in the case of any Terminated Obligation determined by the Calculation Agent in its sole discretion to be a distressed loan or other obligation) in a manner reasonably likely to cause the final Total Return Payment Date to occur on the Scheduled Termination Date.

The Calculation Agent shall notify the parties of any Termination Trade Date designated by it pursuant to the foregoing proviso.
"Total Return Payment Date" means, with respect to any Terminated Obligation or Repaid Obligation, the fifth Business Day next succeeding the last day of the Monthly Period during which the related Obligation Termination Date occurs.

Page 33

ANNEX I
REFERENCE PORTFOLIO

	
							
	Reference Obligation
	Reference Entity
	Reference Amount
	Outstanding Principal Amount 
	Initial Price (%)
	Obligation Trade Date
	Obligation Settlement Date

	 
	 
	 
	 
	 
	 
	 

Page 34

ANNEX II
OBLIGATION CRITERIA
The "Obligation Criteria" are as follows:
		
	(i)
	The obligation is a Loan.

		
	(ii)
	The obligation is denominated in USD.

		
	(iii)
	The obligation constitutes a legal, valid, binding and enforceable obligation of the applicable Reference Entity, enforceable against such person in accordance with its terms.

		
	(iv)
	If the Obligation Trade Date occurs after July 16, 2015, the obligation is of a type (any such obligation, a "Bank Eligible Investment") that is eligible for investment by a national banking association pursuant to paragraph Seventh of 12 U.S.C. 24, as amended, and the regulations thereunder of the Comptroller of the Currency in Part 1 of Title 12 of the Code of Federal Regulations.

		
	(v)
	Except for any Delayed Drawdown Reference Obligation or Revolving Reference Obligation, the obligation does not require any future advances to be made to the related issuer or obligor on or after the Obligation Trade Date.

		
	(vi)
	The obligation is not Subordinate.

		
	(vii)
	The obligation is secured.

		
	(viii)
	The obligation constitutes indebtedness for U.S. Federal income tax purposes.

		
	(ix)
	Transfers of the obligation on the Obligation Trade Date may be effected pursuant to the Standard Terms and Conditions for Par/Near Par Trade Confirmations and not the Standard Terms and Conditions for Distressed Trade Confirmations, in each case as published by the LSTA and as in effect on the Obligation Trade Date.

		
	(x)
	The obligation is on the Obligation Trade Date part of a fungible class of debt obligations (as to issuance date and all economic terms) of at least USD125,000,000.

		
	(xi)
	Except for any obligation listed in Annex IV hereto, the obligation is on the Obligation Trade Date the subject of at least two bid quotations from nationally recognized independent dealers in the related obligation as reported on a nationally recognized pricing service.

		
	(xii)
	The obligation has an Initial Price as of the Obligation Trade Date of at least 85%.

		
	(xiii)
	The obligation has on the Obligation Trade Date a Moody's Rating of at least B3 and an S&P Rating of at least B-.

		
	(xiv)
	There are at least three Reference Entities in the Reference Portfolio that are not Affiliates of one another.

Page 35

For purposes hereof:
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
"Moody's Rating" means, with respect to a Reference Obligation, as of any date of determination: 
		
	(i)
	if the Reference Obligation itself is rated by Moody's (including pursuant to any credit estimate), such rating,

		
	(ii)
	if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the related Reference Entity has a corporate family rating by Moody's, the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Loan:

	
		
	Loan
	Relevant Rating

	The Loan is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by Moody's that is one rating subcategory above such corporate family rating

	The Loan is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by Moody's that is one rating subcategory below such corporate family rating

	The Loan is Subordinate
	The rating by Moody's that is two rating subcategories below such corporate family rating

		
	(iii)
	if the foregoing paragraphs are not applicable, but there is a rating by Moody's on a secured obligation of the Reference Entity that is not a Second Lien Obligation and is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating assigned by Moody's to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by Moody's that is one rating subcategory below the rating assigned by Moody's to the other obligation

	The Reference Obligation is Subordinate
	The rating by Moody's that is two rating subcategories below the rating assigned by Moody's to the other obligation

		
	(iv)
	if the foregoing paragraphs are not applicable, but there is a rating by Moody's on an unsecured obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Obligation) but is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table 

Page 36

below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:
	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by Moody's that is one rating subcategory above the rating assigned by Moody's to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating assigned by Moody's to the other obligation

	The Reference Obligation is Subordinate
	The rating by Moody's that is one rating subcategory below the rating assigned by Moody's to the other obligation

		
	(v)
	if the foregoing paragraphs are not applicable, but there is a rating by Moody's on an obligation of the Reference Entity that is Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by Moody's that is two rating subcategories above the rating assigned by Moody's to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by Moody's that is one rating subcategory above the rating assigned by Moody's to the other obligation

	The Reference Obligation is Subordinate
	The rating assigned by Moody's to the other obligation

		
	(vi)
	if a rating cannot be assigned pursuant to clauses (i) through (v), the Moody's Rating may be determined using any of the methods below:

(A)    for up to 10% of the Portfolio Target Amount, Counterparty may apply to Moody's for a shadow rating or public rating of such Reference Obligation, which shall then be the Moody's Rating (and Counterparty may deem the Moody's Rating of such Reference Obligation to be "B3" pending receipt of such shadow rating or public rating, as the case may be); provided that (x) a Reference Obligation will not be included in the 10% limit of the Portfolio Target Amount if Counterparty has assigned a rating to such Reference Obligation in accordance with clause (B) below and (y) upon receipt of a shadow rating or public rating, as the case may be, such Reference Obligation will not be included in the 10%  limit of the Portfolio Target Amount; or

Page 37

(B)    for up to 10% of the Portfolio Target Amount, if there is a private rating of an obligor that has been provided by S&P to Citibank and Counterparty, Counterparty may impute a Moody's Rating that corresponds to such private rating; provided that a Reference Obligation will not be included in the 10% limit of the Portfolio Target Amount if Counterparty has applied to Moody's for a shadow rating.
For purposes of the foregoing, a "private rating" shall refer to a rating obtained by Citibank, by Counterparty or by or on behalf of an obligor on a Reference Obligation that is not disseminated publicly; whereas a "shadow rating" shall refer to a credit estimate obtained upon application of Counterparty or a holder of a Reference Obligation.  Any private rating or shadow rating shall be required to be refreshed annually.  If Counterparty applies to Moody's for a shadow rating or public rating of a Reference Obligation, Counterparty shall provide evidence to Citibank of such application and shall notify Citibank of the expected rating.  Counterparty shall notify Citibank of the shadow rating or public rating assigned by Moody's to a Reference Obligation.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, or any successor thereto.
"S&P Rating" means, with respect to a Reference Obligation:
		
	(i)
	if the Reference Obligation itself is rated by S&P (including pursuant to any credit estimate), such rating,

		
	(ii)
	if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the related Reference Entity has a corporate issuer rating by S&P, the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Loan:

	
		
	Loan
	Relevant Rating

	The Loan is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by S&P that is one rating subcategory above such corporate issuer rating

	The Loan is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by S&P that is one rating subcategory below such corporate issuer rating

	The Loan is Subordinate
	The rating by S&P that is two rating subcategories below such corporate issuer rating

		
	(iii)
	if the foregoing paragraphs are not applicable, but there is a rating by S&P on a secured obligation of the Reference Entity that is not a Second Lien Obligation and is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

Page 38

	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating assigned by S&P to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation

	The Reference Obligation is Subordinate
	The rating by S&P that is two rating subcategories below the rating assigned by S&P to the other obligation

		
	(iv)
	if the foregoing paragraphs are not applicable, but there is a rating by S&P on an unsecured obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Obligation) but is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating assigned by S&P to the other obligation

	The Reference Obligation is Subordinate
	The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation

		
	(v)
	if the foregoing paragraphs are not applicable, but there is a rating by S&P on an obligation of the Reference Entity that is Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

	
		
	Reference Obligation
	Relevant Rating

	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate
	The rating by S&P that is two rating subcategories above the rating assigned by S&P to the other obligation

	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate
	The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation

	The Reference Obligation is Subordinate
	The rating assigned by S&P to the other obligation

Page 39

		
	(vi)
	if the foregoing paragraphs are not applicable, then the S&P Rating shall be "CC"; provided that (x) if application has been made to S&P to rate a Reference Obligation and such Reference Obligation has a Moody's Rating, then the S&P Rating with respect to such Reference Obligation shall, pending the receipt of such rating from S&P, be equal to the S&P Rating that is equivalent to such Moody's Rating and (y) Reference Obligations in the Reference Portfolio constituting no more, by aggregate Notional Amount, than 10% of the Portfolio Target Amount may be given a S&P Rating based on a rating given by Moody's as provided in clause (x) (after giving effect to the addition of the relevant Reference Obligation, if applicable).

Page 40

ANNEX III
Approved Buyers
Bank of America, NA
The Bank of Montreal
The Bank of New York Mellon, N.A.
Barclays Bank plc
BNP Paribas
Canadian Imperial Bank of Commerce
Citibank, N.A.
Credit Agricole S.A.
Credit Suisse
Deutsche Bank AG
Goldman Sachs & Co.
HSBC Bank
JPMorgan Chase Bank, N.A.
Morgan Stanley & Co.
Natixis
Northern Trust Company
Royal Bank of Canada
The Royal Bank of Scotland plc
Scotia Capital
Societe Generale
The Toronto-Dominion Bank
UBS AG
U.S. Bank, National Association
Wells Fargo Bank, National Association

Page 41

ANNEX IV

Page 42Exhibit 10364

		

			 

		

		

			Exhibit 10.364

		

		
			SEPARATION AGREEMENT, GENERAL RELEASE AND WAIVER OF CLAIMS
		

		
			 
		

		
			This Separation Agreement, General Release and Waiver of Claims (“Agreement”) is entered into by and between John Clendening (“Mr. Clendening”), on the one hand, and The Charles Schwab Corporation and Charles Schwab & Co., Inc., their respective affiliates and the predecessors, successors and assigns of each of the foregoing (collectively “Schwab” or the “Company”), on the other hand, dated as of the date by which both parties have executed the Agreement (the “Execution Date”) and effective upon the expiration of the Revocation Period described in Paragraph 25 (g), below (“Effective Date”).  Together, Mr. Clendening and the Company shall be referred to herein as the “Parties.”  
		

		
			 
		

		
			RECITALS
		

		
			 
		

		
			WHEREAS, Mr. Clendening stepped down from his position as Executive Vice-President, Schwab Investor Services of The Charles Schwab Corporation, effective November 18, 2014, and will step down from his remaining officer positions with Schwab on December 31, 2014 and the employment relationship will end effective March 31, 2015.
		

		
			 
		

		
			WHEREAS, the Parties now desire to definitively resolve, fully and finally, all differences, disputes and claims Mr. Clendening might have against the Company and anyone connected with it through and including the Execution Date, including, but not limited to, those arising out of or relating to Mr. Clendening’s employment relationship with Schwab and the termination thereof.
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Company and Mr. Clendening hereby agree as follows:
		

		
			 
		

		
			AGREEMENT
		

		
			 
		

			
	
			
				 1.
			Resignation of Positions.  Mr. Clendening will step down from his remaining positions as an officer of Schwab, from any and all Schwab directorships he holds, in each case effective as of December 31, 2014 and will be deemed to have resigned his employment on the earlier of March 31, 2015 or the business day before he commences employment as set forth in Paragraph 9 (“Separation Date”).  Mr. Clendening acknowledges and agrees that with the exception of his accrued vacation or floating holidays and his paychecks for the pay periods after he signs this Agreement through March 31, 2015, he has received all earned wages due to him as a result of his employment as Executive Vice President, Schwab Investor Services with, and services as an officer and director of, the Company.   

		
			 
		

			
	
			
				 2.
			Consideration.  Subject to and upon satisfaction by Mr. Clendening of the terms and conditions set forth in this Agreement, Schwab agrees to provide Mr. Clendening the following consideration, to which he is not otherwise entitled:

			
	
			
				 (i)
			

			
	
			
			Schwab will continue to employ Mr. Clendening, which it is not otherwise obligated to do, subject to the terms and conditions of this Agreement.  Except as 
		

		 

		

			188450 1.

		

		

			 

		

 

			otherwise provided in this Agreement and while he remains employed by Schwab, Schwab will continue to provide Mr. Clendening with his base salary, annual bonus for 2014, reimbursement of business expenses incurred in accordance with Company policy, and employee benefits at the same level as provided prior to the Separation Date.  Mr. Clendening will continue to use the services of Schwab’s executive coach through the end of December 2014.   Mr. Clendening’s employment with Schwab will end on the earlier of: 1) his Separation Date or 2) a date resulting from a violation by Mr. Clendening of his obligations set forth in this Agreement.   The date Mr. Clendening’s employment ends will be his Separation Date.  During the period commencing on December 31, 2014 and ending on his Separation Date, Mr. Clendening shall perform such duties as are assigned to him by Walt Bettinger, Chief Executive Officer and shall report solely to Mr. Bettinger regarding those duties.  Mr. Clendening agrees to comply with all Company policies (including but not limited to human resources, information security, compliance, the Code of Business Conduct, and all Compliance policies on outside business activities), up through and including his Separation Date.  In the event Mr. Clendening fails to comply with any material Company policy or violates the material terms of this Agreement, the Company will notify him of such failure to comply or violation of this Agreement, and his employment will be deemed terminated immediately upon such notice.  In such event, all remaining payments and benefits due to Mr. Clendening under this Agreement shall cease immediately and he will not receive any payments under Paragraph 2 (ii) or the Additional Consideration set forth in Paragraph 4.   

			
	
			
				 (ii)
			

			
	
			
			Schwab will pay Mr. Clendening a payment of Five Million One Hundred Sixty Seven Thousand Dollars and No Cents ($5,167,000.00), less usual and customary taxes, withholding, and authorized deductions as long as Mr. Clendening does not commence employment with  or otherwise begin to act in any capacity with a company or entity that is a Competitor Business (“Competitor Business” is defined for purposes of this Agreement as the business entities listed or described in Exhibit A)  on or before December 31, 2015.  Schwab will advance one payment of $2,583,500.00 (less applicable taxes) payable on or before March 15, 2015.  If Mr. Clendening commences employment with or otherwise begins to act in any capacity with a Competitor Business on or before December 31, 2015, he will be required to repay Schwab the gross amount of this payment because he does not earn this payment until December 31, 2015, as long as he has not worked for a Competitor Business.    Mr. Clendening agrees to notify Schwab’s Chief Executive Officer and Chief Administrative Officer before accepting and commencing any employment opportunity prior to January 1, 2016.  Schwab will timely confirm whether such employment opportunity will constitute employment or other association with a Competitor Business, and Schwab will not unreasonably withhold its determination that such opportunity will not be with a Competitor Business.      

		
			 
		

			
	
			
				 (iii)
			

			
	
			
			Schwab will provide outplacement services through Schwab’s vendor under the terms of the outplacement program, which must be initiated within 30 days from the Separation Date (the Company will not pay cash in lieu of services).

		

		

		 

		

			188450 2.

		

		

			 

		

 

		 
		

			
	
			
				 3.
			Entire Consideration.  Mr. Clendening acknowledges that Schwab is under no obligation to provide the consideration to him pursuant to Paragraph 2 and will do so only subject to his agreement to, and compliance with, the terms of this Agreement.  Mr. Clendening agrees that the amount and promises set forth in Paragraph 2 shall constitute the entire consideration provided to him under this Agreement, and that Mr. Clendening shall not seek any further compensation or other consideration for any other claimed damage, costs, or attorneys’ fees in connection with the matters encompassed in this Agreement.  Mr. Clendening expressly agrees that he waives any such rights or benefits in exchange for the rights and benefits provided under this Agreement.  Mr. Clendening acknowledges and agrees that he is not eligible for or entitled to any severance benefits under The Charles Schwab Severance Pay Plan or under any other severance or termination pay or benefits arrangement with Schwab.  

			
	
			
				 4.
			Additional Consideration.  If Mr. Clendening executes (and does not revoke) the Supplemental Waiver and Release Agreement attached as Exhibit B to the Agreement on or within seven (7) business days after his Separation Date and has not commenced employment with, or acted in any capacity with a Competitor Business on or before December 31, 2015, he will receive a lump sum payment of $2,583,500.00 (less applicable taxes) on December 31, 2015 (“Additional Consideration”).  

		
			 
		

			
	
			
				 5.
			No Other Employee Benefits.  Mr. Clendening is not eligible for any other benefits or payments not specifically provided for in this Agreement.  Upon reaching the Separation Date, in accordance with federal and state regulations, Mr. Clendening will be offered the opportunity to continue receiving certain insured group benefit coverage, such as medical benefits, for a period of time not to exceed eighteen (18) additional months, provided Mr. Clendening pays the appropriate premiums for the coverage and returns the necessary paperwork.

		
			 
		

			
	
			
				 6.
			Retirement Savings and Investment Plan.  Mr. Clendening’s active participation in The SchwabPlan Retirement Savings & Investment Plan shall cease as of the Separation Date.  Mr. Clendening will not receive matching contributions or any discretionary profit sharing for 2015 but will receive matching contributions and discretionary profit sharing, to the extent provided, for 2014.  Mr. Clendening’s vested interest in Company contributions (other than matching contributions, which are automatically fully vested) will be determined based on his service through the Separation Date.  

		
			 
		

			
	
			
				 7.
			The Charles Schwab Corporation Stock Incentive Plans.  Mr. Clendening will continue to vest in any stock options previously granted until his Separation Date, in accordance with the terms and conditions of the applicable Plan documents.  Under the provisions of The Charles Schwab Corporation stock incentive plans, Mr. Clendening retains the right to exercise vested options for a specific period of time after his Separation Date.  Any stock options that are not vested as of his Separation Date are immediately canceled.  The applicable Stock Option Agreement(s) and Plan documents govern the vesting and exercising of stock options.  Mr. Clendening will continue to vest in any performance-based restricted stock units granted to him until the Separation Date in accordance with the terms and conditions of the applicable Plan documents.  Performance-based restricted stock units not vested as of Mr. Clendening’s 
		

		 

		

			188450 3.

		

		

			 

		

 

			Separation Date will be forfeited as provided by the applicable Plan documents.  The Award Agreement(s) and Plan documents govern the performance-based restricted stock units.   

		
			 
		

			
	
			
				 8.
			Tax Treatment.  Each of the payments to be made under Paragraph 2(ii) and Paragraph 4 are designated as separate payments for Internal Revenue Code Section 409A purposes.  Mr. Clendening understands and agrees that Schwab is providing no tax or legal advice, and makes no representations regarding tax obligations or consequences, if any, related to any part of this Agreement.  Mr. Clendening further agrees that, to the extent that Schwab makes all payments of “deferred compensation” as defined in and under Section 409A at the times provided in this Agreement, he will assume any such tax obligations or consequences that may arise from this Agreement, and he shall not seek any indemnification from Schwab in this regard.  Mr. Clendening further agrees to indemnify and hold Schwab harmless from any claims, demands, deficiencies, levies, assessments, executions, judgments, penalties, taxes, attorneys’ fees or recoveries by any governmental entity against Schwab for any failure by Mr. Clendening to pay taxes due and owing, if any, as a result of any payments under this Agreement, to the extent that Schwab makes all payments of “deferred compensation” as defined in and under 409A at the times provided in this Agreement.    

		
			 
		

			
	
			
				 9.
			Early Separation Date.  Mr. Clendening understands and agrees that if he accepts a position as an employee, acts as an independent contractor, consultant or sole proprietor, or acts as an officer, director, or partner in another public or privately held company at any time prior to March 31, 2015, he will notify Jay Allen, EVP and Chief Administrative Officer at (415) 667-9510 immediately.  If Mr. Clendening commences employment or otherwise begins to act in any such capacity with a company or entity that is not a Competitor Business then Mr. Clendening’s Separation Date will be deemed to be the earlier of March 31, 2015 or the business day prior to the commencement of employment or other act in any such capacity,, and his salary and benefits as an active employee shall cease as of such date.  Mr. Clendening will then be eligible to receive payments set forth under Paragraphs 2(ii) and 4, less usual and customary taxes, withholding and authorized deductions, on the dates set forth therein, provided he meets any eligibility requirements applicable to such payments hereunder.  If Mr. Clendening commences employment or otherwise begins to act in any capacity with a Competitor Business at any time on or prior to December 31, 2015, his Separation Date will be deemed to be the earlier of March 31, 2015 or the business day prior to commencement of employment or other act in any such capacity and all remaining payments (including the Additional Consideration) and benefits under this Agreement shall cease immediately.  In addition, any payments made pursuant to Paragraph 2(ii) will be required to be repaid to Schwab in their entirety because Mr. Clendening has not earned the payments until December 31, 2015 (if it has not already occurred), as long as he has not worked for a Competitor Business.   

		
			 
		

			
	
			
				 10.
			No Filings.  Mr. Clendening represents that as of the Execution Date, he has not filed any action, claim, charge, or complaint against Schwab or any Schwab Affiliate (as defined in Paragraph 11) or any other Releasee identified in Paragraph 11 below, with any local, state, or federal agency, self-regulatory organization (“SRO”), or court and that he will not make such a filing at any time hereafter based upon any events or omissions occurring prior to and up to the Execution Date.  In the event that any agency or court assumes jurisdiction of any lawsuit, claim, charge or complaint, or purports to bring any legal or regulatory proceedings against Schwab or 
		

		 

		

			188450 4.

		

		

			 

		

 

			any other Releasee identified in Paragraph 11 below on Mr. Clendening’s behalf, he promptly will request that the agency, SRO, or court withdraw from or dismiss the lawsuit, claim, charge, or complaint with prejudice, and in any event, waives his right to any form of recovery or relief in any such proceedings, including legal fees.

		
			 
		

			
	
			
				 11.
			Complete Release by Mr. Clendening.  Mr. Clendening – for himself and for his heirs, representatives, attorneys, executors, administrators, successors, and assigns – releases Schwab, and all of its affiliates, subsidiaries, divisions, parent corporations, and employee welfare and retirement plans (collectively “Schwab Affiliates”), and its stockholders, officers, directors, partners, servants, agents, employees, representatives, attorneys, plan administrators and fiduciaries, past, present, and future, all persons acting under, by, through, or in concert with any of them, and each of them (all of whom are hereinafter referred to as “Releasees”), from any and all actions, causes of action, grievances, obligations, costs, expenses, damages, losses, claims, liabilities, suits, debts, demands, and benefits (including attorneys’ fees and costs actually incurred), of whatever character, in law or in equity, known or unknown, suspected or unsuspected, matured or unmatured, of any kind or nature whatsoever, based on any act, omission, event, occurrence, or nonoccurrence from the beginning of time up to and including the Execution Date of this Agreement, including but not limited to any claims or causes of action arising out of or in any way relating to Mr. Clendening’s employment relationship with Schwab or any other Releasee.

		
			 
		

		
			This release of claims includes, but is not limited to, claims for breach of any implied or express contract or covenant; claims for promissory estoppel; claims of entitlement to any pay (other than the payments promised in Paragraph 2); claims of wrongful denial of insurance and employee benefits, or any claims for wrongful termination, public policy violations, defamation, invasion of privacy, fraud, misrepresentation, unfair business practices, emotional distress or other common law or tort matters; claims of harassment, retaliation or discrimination under federal, state, or local law; claims based on any federal, state or other governmental statute, regulation or ordinance, including, without limitation, Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended, the Older Worker Benefit Protection Act, the Genetic Information and Discrimination Act, the National Labor Relations Act, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, the Employee Retirement Income Security Act, as amended, and any all related federal and state laws, and the state constitution, including, without limitation, the California Fair Employment and Housing Act, the California Family Rights Act, the California Labor Code, the California Government Code, and the California Constitution.   It is expressly understood by Mr. Clendening that among the various rights and claims being waived by Mr. Clendening in this Agreement are those for age discrimination arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. sec. 621, et seq.), as amended.  Mr. Clendening understands and agrees that, notwithstanding any provisions and covenants in this Paragraph, nothing in this Agreement is intended to constitute an unlawful release or waiver of any of his rights under any laws and/or to prevent, impede, or interfere with his ability and/or right to challenge the validity of this release.  Nothing in this Agreement shall be construed to prohibit Mr. Clendening from filing or proceeding with a charge with or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or any other comparable federal, state, or local agency charged with the investigation and 
		

		 

		

			188450 5.

		

		

			 

		

 

		enforcement of any employment laws, although by signing this Agreement, he agrees and understands that he is waiving his right to individual relief based on claims asserted in such a charge or complaint.  This Paragraph is not intended to limit Mr. Clendening from pursuing an action for the sole purpose of enforcing this Agreement, or to waive any rights that arise under, or are preserved by, other paragraphs of this Agreement.
		

		
			 
		

			
	
			
				 12.
			Release of Unknown Claims.  For the purpose of implementing a full and complete release, Mr. Clendening expressly acknowledges that the releases he gives in this Agreement are intended to include, without limitation, claims that he did not know or suspect to exist in his favor at the time of the effective date of this Agreement, regardless of whether the knowledge of such claims, or the facts upon which they might be based, would materially have affected the settlement of this matter; and that the consideration given under the Agreement was also for the release of those claims and contemplates the extinguishment of any such unknown claims despite the fact that California Civil Code Section 1542 may provide otherwise.  Mr. Clendening waives any right or benefit available to him in any capacity under the provisions of Section 1542, which provides as follows:

		
			 
		

		
			A GENERAL RELEASE DOES NOT EXTEND TO ALL CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
		

		
			 
		

		
			In making this waiver, Mr. Clendening acknowledges that he may hereafter discover facts in addition to or different from those which he now believes to be true with respect to the subject matter released herein, but agrees that he has taken that possibility into account in reaching this Agreement and that, notwithstanding the discovery or existence of any such additional or different facts, Mr. Clendening fully, finally, and forever settles and releases any and all such claims.
		

		
			 
		

			
	
			
				 13.
			Successors.  This Agreement shall be binding upon the Parties, and their heirs, representatives, executors, administrators, successors, insurers, and assigns, and shall inure to the administrators, predecessors, successors, and assignees of each of the Parties.  In the event of his death or a judicial determination of his incapacity, references to Mr. Clendening in this Agreement shall, where appropriate, be deemed to be references to his estate, beneficiar(ies), executor(s), or other legal representative(s).  

		
			 
		

			
	
			
				 14.
			Indemnification.Nothing in this Agreement (including the release contained herein) shall be construed to limit Mr. Clendening’s rights to indemnification, contribution, or advancement of expenses pursuant to Delaware or California law or the Company’s bylaws arising from actions taken in the scope of his employment with the Company.

		
			 
		

			
	
			
				 15.
			No Attorney’s Fees and Costs.  The Parties will bear their own respective costs and fees, including attorney’s fees, incurred in connection with negotiation and execution of this Agreement.  

		
			 
		

		 

		

			188450 6.

		

		

			 

		

 

			
	
			
				 16.
			Non-Disparagement.   Mr. Clendening agrees that he will not make any disparaging or defamatory statements, either orally or in writing (and, for the purposes of this Agreement, the term “writing” includes but is not limited to electronic communications) to any third party (a) concerning Schwab, Schwab Affiliate, or any other person or entity known by him to be a Releasee,  or officers, directors, employees or agents of Schwab, (b) concerning the services, products, offerings, quantitative or other research, or methods of communicating such services, products or offerings, or its or their technology, operations processes, methods of doing business, or employment practices of Schwab or Schwab Affiliate, or (c) that may tend to disrupt, impair, or otherwise interfere with the Schwab’s or any Releasee’s business, reputation, or relationships with its employees, clients, agents, representatives, or vendors.  Mr. Clendening further agrees to refrain from acting as a source (attributable or otherwise) or engaging in any formal or informal dialogue with the press or media regarding his experiences with or at the Company or any Releasee, or its or their past or present directors, officers, or employees, or regarding any information he may have acquired (first hand or otherwise) concerning operations, technology, marketing or advertising strategies or plans, financial performance, salary or incentive compensation practices, recruitment or retention strategies, employment practices, negotiation strategies, vendors, current or former employees, internal or external investigations, or internal policies and procedures of the Company or any Releasee.  Nothing in this paragraph is intended to interfere with Mr. Clendening’s ability to provide truthful testimony pursuant to paragraph 17 below.    

		
			    
		

			
	
			
				 17.
			    Cooperation.  Mr. Clendening agrees not to encourage or assist in any litigation against Schwab or Schwab Affiliate or provide testimony in any matter in which Schwab or any Schwab Affiliate has an interest unless he is required by law to do so.  Notwithstanding the foregoing, Mr. Clendening agrees that he will cooperate fully with Schwab or any Schwab Affiliate (including any attorneys retained by Schwab or a Schwab Affiliate) in connection with any pending or future matter (including but not limited to any audit, tax proceeding, litigation, arbitration, external or internal investigation, or government proceeding) in which or to the extent Schwab or any Schwab Affiliate reasonably deems his cooperation necessary.  Specifically excluded from this paragraph is any dispute arising out of the interpretation of or performance of this Agreement.  Mr. Clendening acknowledges and agrees that such cooperation may include, but shall in no way be limited to, being available for interviews with Schwab, Schwab Affiliate,  or any attorneys or agents retained by Schwab or any Schwab Affiliate, providing to Schwab or any Schwab Affiliate any documents in his possession or under his control relating to the matter, and providing sworn statements and/or testimony in connection with the matter.  Mr. Clendening agrees to appear and give testimony as a witness in any judicial, administrative, quasi-governmental, or investigatory proceeding as requested by Schwab or a Schwab Affiliate.  Mr. Clendening also agrees, upon request by Schwab or a Schwab Affiliate to provide information that he learned during the course of the employment relationship with the Company.  Mr. Clendening further agrees to travel if necessary to give testimony in any regulatory proceeding, arbitration, or litigation.  The Company will reimburse him for reasonable travel expenses (including reasonable out-of-pocket expenses) in accordance with the Company’s travel expense policies then in effect.  To the extent permitted by the respective matter, Schwab or any Schwab Affiliate will attempt, in good faith, to accommodate and minimize the disruption to Mr. Clendening’s post-Company employment obligations.  In the event Mr. Clendening provides a sworn statement or testimony, either as required by legal 
		

		 

		

			188450 7.

		

		

			 

		

 

			process or at Schwab’s or any Schwab Affiliate’s request, Mr. Clendening agrees to do so in good faith and fully, accurately and truthfully, to the best of his ability. Mr. Clendening agrees and understands that nothing in this Agreement is intended to prevent, impede, or interfere with his (or his attorney’s) ability to initiate communications directly with, respond to any inquiry from,  provide testimony about the settlement or its underlying facts and circumstances before, or participate in any investigation or proceeding conducted by the Securities and Exchange Commission (SEC), the Equal Opportunity Employment Commission (“EEOC”), the Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization, or any other federal or state governmental agency or regulatory authority. Mr. Clendening further agrees to notify the Company promptly of any demand or legal process that seeks to cause him to disclose: confidential information about Schwab, Schwab Affiliate, any employee, officer, or director, , including any information covered by his Confidentiality, Non-Solicitation and Intellectual Property Ownership Agreement, and further agrees to cooperate fully with Schwab or any Schwab Affiliate  if it decides to challenge the demand or legal process seeking such disclosure.   If Mr. Clendening is served with a subpoena, court order, or other legal process concerning any of the matters referenced above or in any proceeding in which Schwab or any Schwab Affiliate is a party or has an interest, he agrees to notify the Company within two (2) business days after receipt of such process and, in any event, no less than ten (10) business days in advance of any required appearance or production.  

		
			 
		

			
	
			
				 18.
			Confidential Information.    Mr. Clendening agrees that he remains bound by the Confidentiality, Non-Solicitation and Intellectual Property Ownership Agreement that he signed or electronically acknowledged as a condition of his employment and which is attached hereto as Exhibit C and is incorporated herein as if fully set forth herein.  In exchange for the valuable consideration offered herein, he agrees and reconfirms his obligation to abide by the Confidentiality, Non-Solicitation and Intellectual Property Ownership Agreement.          

		
			 
		

			
	
			
				 19.
			Injunctive Relief.  Mr. Clendening acknowledges and agrees that the restrictions contained in Paragraphs 16, 17, and 18 are material inducements to the Company’s willingness to enter into this Agreement and necessary to protect the good will, trade secrets, and confidential and proprietary information of the Company.  Mr. Clendening further acknowledges that the restrictions contained in these Paragraphs are reasonable in scope and duration, will not prevent him from earning a livelihood during the applicable period of restriction, are necessary to protect the legitimate interests of the Company, and that any breach by Mr. Clendening of any provision contained in Paragraphs 16, 17, or 18 will result in immediate irreparable injury to the Company for which a remedy at law will be inadequate.  Accordingly, Mr. Clendening acknowledges that the Company shall be entitled to seek permanent injunctive relief against him in the event of any breach or threatened breach by Mr. Clendening of the provisions of Paragraphs 16, 17, or 18 in addition to any other remedy that may be available to the Company, whether at law or in equity.  The provisions of Paragraphs 16, 17, and 18 shall remain unmodified and in full force and effect following the Separation Date.  It is the intention of the Parties to this Agreement that the covenants and restrictions set forth in Paragraphs 16, 17, and 18 be given the broadest interpretation permitted by law.  

		
			 
		

			
	
			
				 20.
			Return of Confidential and Proprietary Information.  Mr. Clendening acknowledges that he will return by his Separation Date to Schwab any and all property, files, 
		

		 

		

			188450 8.

		

		

			 

		

 

			materials, records, manuals, written communications, or other items (including hard copy and electronic documents, disks, and files) that he received, obtained and/or created as part of his employment (excluding information Mr. Clendening received about insured benefits, welfare plans, equity grants (including the plan under which those awards are granted), retirement plan information, payroll information regarding Mr. Clendening, and special awards) or that are in his possession or control belonging to Schwab or any of the Releasees, including but not limited to company sponsored credit cards or calling cards, pagers, handheld devices, computer software or hardware (including iPads), keys, and identity badges.  Mr. Clendening agrees that in the event he later locates any such document or materials, he will return it to Schwab immediately. Specifically excluded from this paragraph is the Company-provided printer that is located in Mr. Clendening’s residence, which he shall be permitted to keep in his possession.  In addition, Mr. Clendening agrees that to the extent he seeks to retain any files (including hard copy and electronic documents) that he believes are not Company property, he will obtain the prior approval of Jay Allen, EVP and Chief Administrative Office.

		
			 
		

			
	
			
				 21.
			Breach of Agreement.  If Mr. Clendening undertakes any activities in material violation of Paragraphs 2 (ii), 9, 16, 17, or 18 or otherwise materially breaches any of his obligations under this Agreement, his Separation Date will be accelerated immediately and all payments and other benefits conferred under this Agreement (with the exception of his final paycheck and any accrued but unused vacation and floating holidays) shall cease; provided, however, that such material breach by Mr. Clendening and/or cessation of payments and benefits by the Company will not affect the validity or enforceability of the Parties’ commitments under this Agreement (including but not limited to Mr. Clendening’s general release and waiver of claims contained herein).

		
			 
		

			
	
			
				 22.
			Company Policies.  Mr. Clendening confirms that, as of the date he executes this Agreement, to the best of his knowledge, there is no commission or omission of any act by any employee or agent of the Company that constitutes, or might reasonably constitute, a violation of the Company’s Code of Business Conduct and Ethics, Compliance Manual, or the Company’s legal obligations of which he is aware (or reasonably should have been aware), that has not already been brought to the Company’s attention or that Mr. Clendening can reasonably expect to have been brought to the Company’s attention.  Mr. Clendening agrees that he will as promptly as reasonably possible notify the Company of any such acts or omissions to act that occurred during and relating to Mr. Clendening’s employment with the Company and or come to his attention after the date he executes this Agreement.

		
			 
		

			
	
			
				 23.
			Employment Verification.  Mr. Clendening agrees that he will direct all inquiries from prospective employers or others seeking verification of employment to the current Chief Administrative Officer (presently Jay Allen).  Mr. Clendening agrees that in the event he directs an inquiry to someone other than the current Chief Administrative Officer to respond to requests for reference and employment verifications for Schwab, Schwab will not be liable for any disclosures made in response to that inquiry.  .  

		
			 
		

			
	
			
				 24.
			Corporate Approvals.    This Agreement is subject to approval by the Compensation Committee of the Board of Directors of The Charles Schwab Corporation (the “Compensation Committee”) and shall not be effective until such approval is obtained.

		
			

		

		 

		

			188450 9.

		

		

			 

		

 

		
		

			
	
			
				 25.
			Agreement is Knowing and Voluntary.  Mr. Clendening understands and agrees that he:

		
			 
		

			
	
			
				 a.
			

			
	
			
			has had 21 days within which to consider this Agreement before executing it;

		
			 
		

			
	
			
				 b.
			

			
	
			
			has carefully read and fully understands all of the provisions of this Agreement;

		
			 
		

			
	
			
				 c.
			

			
	
			
			is, through this Agreement, releasing Schwab and the other Releasees from any and all claims he may have against Schwab and the other Releasees, to the extent stated herein, that have arisen up to the date of execution of this Agreement;

		
			 
		

			
	
			
				 d.
			

			
	
			
			knowingly and voluntarily agrees to all of the terms set forth in this Agreement;

		
			 
		

			
	
			
				 e.
			

			
	
			
			knowingly and voluntarily intends to be legally bound by the same;

		
			 
		

			
	
			
				 f.
			

			
	
			
			was advised, and hereby is advised in writing, to consider the terms of this Agreement and consult with an attorney of his choice prior to executing this Agreement;

		
			 
		

			
	
			
				 g.
			

			
	
			
			has seven (7) days after signing this Agreement to revoke it; the Agreement will not become effective or enforceable until the seven-day revocation period has passed.  Revocation can be made by delivering written notice of revocation to Schwab in accordance with Paragraph 36.   For this revocation to be effective, written notice must be delivered to Jay Allen no later than 5:00 p.m. (California time) on the seventh (7th) calendar day after Mr. Clendening signs this Agreement.  If Mr. Clendening revokes this Agreement, it shall not be effective or enforceable and Mr. Clendening will not receive the benefits provided herein; and   

			
	
			
				 h.
			

			
	
			
			is receiving under this Agreement consideration that is in addition to anything to which he is already entitled.

		
			 
		

			
	
			
				 26.
			Full and Independent Knowledge.  The Parties represent that they have discussed thoroughly all aspects of this Agreement with their respective attorneys, fully understand all of the provisions of the Agreement, and are voluntarily entering into this Agreement.

		
			 
		

		 

		

			188450 10.

		

		

			 

		

 

			
	
			
				 27.
			No Representations.  The Parties acknowledge that, except as expressly set forth herein, no representations of any kind or character have been made to induce the execution of this Agreement.

		
			 
		

			
	
			
				 28.
			Ownership of Claims.  Mr. Clendening represents that he has not transferred or assigned, or purported to transfer or assign, any claim released by this Agreement.  Mr. Clendening further agrees to indemnify and hold harmless each and all of the Releasees against any and all claims based upon, arising out of, or in any way connected with any such actual or purported transfer or assignment.

		
			 
		

			
	
			
				 29.
			Non-Admission of Liability.  Mr. Clendening acknowledges that the execution of this Agreement and the payment of consideration hereunder are not and shall not be construed in any way as an admission of wrongdoing or liability on the part of Schwab, or any other person or business entity.  Mr. Clendening further acknowledges that Schwab denies any and all such liability and denies it has engaged in any wrongful act.

		
			 
		

			
	
			
				 30.
			Other Representations.  Mr. Clendening represents that he has no pending claim for any work-related injury, and that he is not aware of any existing injury that would give rise to such a claim, whether under applicable workers’ compensation laws or otherwise.  He further represents that he has been afforded all rights available to him under the Family Medical Leave Act, the Fair Labor Standards Act, and the Uniformed Services Employment and Reemployment Rights Act, if applicable, and has not been retaliated in any manner for doing so.  Mr. Clendening understands that Schwab relied on this representation in entering into this Agreement with him.

		
			 
		

			
	
			
				 31.
			Governing Law.  This Agreement shall be governed by and interpreted under the laws of the State of California applicable to contracts made and to be performed within California, without regard to its conflict of laws principles.

		
			 
		

			
	
			
				 32.
			Arbitration.  Except with respect to judicial injunctive relief as provided in Paragraph 19 above, any dispute or breach arising out of the interpretation or performance of this Agreement shall be settled by arbitration before a single arbitrator in accordance with the Commercial Arbitration Rules  of the American Arbitration Association in San Francisco, California, to be administered by the American Arbitration Association, and judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  With the exception of initial filing fees, the Company shall bear all costs imposed by the American Arbitration Association to administer the arbitration including arbitrator’s fees.  The parties shall be allowed to conduct such discovery as permitted by the arbitrator.  At the conclusion of arbitration, the arbitrator shall issue an award in writing setting forth the basis for the award.  The decision of the arbitrator shall be final and binding, and the Parties waive the right to trial de novo or appeal.  Further, the prevailing party shall be entitled to recover its reasonable costs and attorney’s fees.  Excepted from this paragraph is a complaint with the EEOC, including a challenge to the validity of this Agreement under the Age Discrimination in Employment Act, to the extent such an exception is required by law, any claims required to be arbitrated with FINRA, and any claims brought pursuant to Section 806 of the Sarbanes Oxley Act of 2002.  Claims for unemployment insurance benefits and workers’ compensation benefits shall be resolved pursuant 
		

		 

		

			188450 11.

		

		

			 

		

 

			to the claims procedures under applicable state laws.  Claims for benefits under any ERISA-governed employee benefit plan(s) shall be resolved pursuant to claims procedures under such benefit plans.  

		
			 
		

			
	
			
				 33.
			Waiver.  The failure of any Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

		
			 
		

			
	
			
				 34.
			Miscellaneous.

		
			 
		

			
	
			
				 a.
			Both parties have participated in the drafting of this Agreement.  The language of all parts in this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for or against either party.

		
			 
		

			
	
			
				 b.
			Should any provision in this Agreement be declared or determined to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby, and the illegal or invalid part, term, or provision shall be deemed not to be part of this Agreement, and all remaining provisions shall remain valid and enforceable.

		
			 
		

			
	
			
				 c.
			This Agreement sets forth the entire agreement between the Parties and fully supersedes any and all prior agreements and understandings, written or otherwise, between the Parties pertaining to the subject matter of this Agreement, except as specifically set forth herein.  The provisions of this Agreement may be amended or modified only by a writing signed by the Parties and, if applicable, approved by the Compensation Committee, that specifically identifies the provisions being modified.  

		
			 
		

			
	
			
				 d.
			The headings used herein are for reference only and shall not affect the construction of this Agreement.

		
			 
		

			
	
			
				 35.
			Counterparts.  This Agreement may be executed in one or more counterparts, by facsimile (including PDF) or original signature, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

		
			 
		

		
			36. Notification.   Any notice or other communication given under this Agreement to Schwab shall be in writing and shall be delivered by fax, electronic mail, or physical delivery to Jay Allen, EVP and Chief Administrative Officer, Charles Schwab & Co., Inc., 211 Main Street, SF211MN-201, San Francisco, CA  94105-1905 (email address:  jay.allen@schwab.com; fax: (415) 667-9731).  Any notice or written communication given under this Agreement to Mr. Clendening shall be given to him at his principal residence as reflected in the Company’s records with a copy, which shall not constitute notice, to Morrison Cohen LLP, 909 3rd Avenue, 27th Floor, New York, NY 10022, Attention: Robert M. Sedgwick, Esq. (email address: rsedgwick@morrisoncohen.com). 
		

		
			 
		

		
			PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES THE 
		

		
			//
		

		

		

		 

		

			188450 12.

		

		

			 

		

 

		RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						JOHN CLENDENING

					
					
						CHARLES SCHWAB & CO., INC.

				
	
					
						 

					
					
						 

				
	
					
						/s/ John Clendening                     

					
					
						By: /s/ Jay Allen                               

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Its: EVP and Chief Administrative Officer    

				
	
					
						 

					
					
						 

				
	
					
						Date: December 9, 2014                 

					
					
						Date: December 9, 2014                      

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THE CHARLES SCHWAB CORPORATION

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: /s/ Jay Allen                              

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Its: EVP and Chief Administrative Officer  

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Date: December 9, 2014                      

				
	
					
						 

					
					
						 

				

		
			 
		

		
			 
		

		

		

		 

		

			188450 13.

		

		

			 

		

 

		
		

		
			EXHIBIT A—COMPETITOR BUSINESSES
		

		
			 
		

		
			 
		

		
			Except as otherwise agreed to in writing by the Chief Executive Officer and the Executive Vice President and Chief Administrative Officer of the Company, a Competitor Business will be defined as follows:  1) E*Trade Financial Corporation; E*Trade Financial Corporate Services, Inc.; E*Trade Access, Inc.; E*Trade Brokerage Holdings, Inc.; TD Ameritrade Holdings Co.; Fidelity Brokerage Services, LLC; Fidelity Investments Institutional Services Company, Inc.; Morgan Stanley; Merrill Lynch; Wells Fargo Advisors; UBS; Edward Jones; Raymond James; Ameriprise Financial; LPL Financial; Vanguard; JP Morgan Wealth Management; Interactive Brokers; RBC Dain Raussher; and Scottrade; 2) any other company that is a financial institution regulated or registered by the federal banking regulators, the Securities Exchange Commission, the Commodity Futures Trading Commission, the Financial Industry Regulatory Authority, or any equivalent state law that allows individuals or institutions to place or process orders for securities and/or other financial instruments (including, but not limited to banking functions and instruments) through any medium now known or later developed; or 3) any business that is determined in Schwab’s sole and reasonable discretion to be competitive with the business activities of the Company or its affiliates or subsidiaries, and such determination shall be made timely. 
		

		

		

		 

		

			188450 14.

		

		

			 

		

 

		
		

		
			EXHIBIT B TO SEPARATION AGREEMENT, GENERAL RELEASE AND WAIVER OF CLAIMS
		

		
			 
		

		
			 
		

		
			Supplemental Waiver and Release Agreement
		

		
			 
		

		
			John Clendening entered into a Separation Agreement, General Release and Waiver of Claims (“Agreement”) with The Charles Schwab Corporation and Charles Schwab & Co., Inc. (“Schwab”).    
		

		
			 
		

		
			Mr. Clendening hereby acknowledges that:
		

		
			 
		

			
	
			
				 1.
			

			
	
			
			A blank copy of this Supplemental Waiver and Release Agreement (“Supplemental Agreement”) was attached as an Exhibit to the Agreement when it was given to him for review.  He has had more time to consider signing this Supplemental Agreement than the ample time he was given to consider signing the Agreement.  He may revoke this Supplemental Agreement within seven (7) days after he signs it in accordance with Paragraph 25 (g) of the Agreement.  He was advised to discuss the Agreement, including this Supplemental Agreement, with an attorney before executing either document.

		
			 
		

			
	
			
				 2.
			

			
	
			
			Schwab will provide the Additional Consideration as set forth in the Agreement at Paragraph 4 only if he signs this Supplemental Agreement, does not revoke it within seven (7) days after he signs it, and does not work for a Competitor Business on or before December 31, 2015.  

		
			 
		

			
	
			
				 3.
			

			
	
			
			In exchange for the consideration set forth in Paragraph 2 of this Supplemental Agreement (Paragraph 4 of the Agreement), he hereby agrees that this Supplemental Agreement will be a part of his Agreement and that his Agreement is to be construed and applied as if he signed it on the day he signed this Supplemental Agreement.  This extends his release of claims under Paragraphs 11 and 12 of the Agreement to any claims that may have arisen during the remainder of his employment through the last day of his employment on March 31, 2015 until the date of execution of this Supplemental Agreement, and this Supplemental Agreement becomes effective by its terms.    

		
			 
		

			
	
			
				 4.
			

			
	
			
			Nothing in this Supplemental Agreement is intended to restrict or does restrict the scope or application of the releases and waivers, or any other provision, set forth in the Agreement.

		
			 
		

			
	
			
				 5.
			

			
	
			
			He understands and agrees that this Supplemental Agreement is not to be signed until after the Separation Date (as defined in the Agreement).    If the Supplemental Agreement is signed earlier than the last day of his employment, he understands that it will not be effective and that to receive the consideration set forth in Paragraph 2 of this Supplemental Agreement he must sign another copy of the Supplemental Agreement 

		
			//
		

		 

		

			188450 15.

		

		

			 

		

 

		after the Separation Date.      
		

		
			 
		

		
			This Supplemental Agreement must be signed after the Separation Date but no later than April 9, 2015.      
		

		
			 
		

		
			 
		

		
			 
		

		
			_____________________________________Dated:   April ___, 2015
		

		
			John Clendening
		

		
			 
		

		
			 
		

		
			 
		

		
			_____________________________________Dated:   ______________________
		

		
			Jay Allen
		

		
			EVP and Chief Administrative Officer
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			188450 16.

		

		

			 

		

 

		

			EXHIBIT C

		

		

			 

		

		CHARLES SCHWAB CONFIDENTIALITY, NONSOLICITATION, AND INTELLECTUAL PROPERTY OWNERSHIP AGREEMENT 2008 (Simplified Confidentiality Agreement - Rev. 3/08) 
		

		
			CONFIRMATION PAGE
		

		
			

Confirmation of Agreement to and Signature on Confidentiality, Nonsolicitation and Assignment Agreement.

This is your Confirmation of your electronic agreement to the Confidentiality, Nonsolicitation and Assignment Agreement. You may print this copy and record of our agreement and retain it for your records.

To PRINT this page, simply click the PRINT BUTTON on your browser.

Employee: John Clendening
Employee ID: 
Employee Logon: us\john.clendening
Employee Email: 
Employee Telephone: (XXX) XXX-XXXX
Employee Manager: Walt Bettinger

Date of Electronic Signature: 06/03/2008 23:47:00 PM EST

I AM ENTERING INTO THIS AGREEMENT IN CONSIDERATION FOR my initial or continued at-will employment with Charles Schwab & Co., Inc., its parent company and/or its subsidiaries, affiliates, joint venturers, and successors (collectively, “Schwab”), and the compensation and other benefits I receive from Schwab, including my participation in bonus and incentive compensation plans for which I am eligible. Acknowledging the receipt and adequacy of this consideration, and intending to be legally bound, I agree as follows:
		

			
	
			
				 a.
			

			
	
			
			that I will maintain the confidentiality of all Confidential Information and Intellectual Property, as defined below, that I develop or obtain while I work at Schwab;

			
	
			
				 b.
			

			
	
			
			that Schwab owns all Confidential Information and Intellectual Property, and that I will not assert any claim to the Confidential Information and/or Intellectual Property; and

			
	
			
				 c.
			

			
	
			
			that I will not solicit or encourage Schwab’s employees or Schwab’s current or prospective clients to leave Schwab.

		
			The scope of these obligations, and some of the possible consequences for breaching them, are described in more detail below.
		

			
	
			
				 1.
			

			
	
			
			Protection of Schwab’s Confidential Information and Intellectual Property. While working at Schwab, I will develop and/or have access to Schwab’s Confidential Information and/or Intellectual Property, as defined in Paragraph 2. I acknowledge that Confidential Information and Intellectual Property is the exclusive property of Schwab, its business partners, licensors, and/or clients, and I agree not to assert any claim to it. Except as permitted in Paragraph 7, I agree not to use or disclose any Confidential Information and/or Intellectual Property during or after my employment with Schwab.

			
	
			
				 2.
			

			
	
			
			What is Schwab Confidential Information and Intellectual Property? “Confidential Information” is all information learned during my employment that is not generally known to the public at the time it is made known to me. It includes, but is not limited to: “Trade Secrets” and 
		

		 

		

			1.

		

 

			“Developments,” as defined below; names, addresses, phone numbers, email addresses, account numbers or financial information pertaining to Schwab clients or prospective clients; proprietary software designs and hardware configurations; proprietary technology; business methods or strategies; new product and service ideas; marketing, financial, research and sales data; information sufficient to identify clients, vendors, or personnel; client, vendor or personnel lists, contact, account and related information; and all information Schwab treats or is obligated to treat as confidential, privileged, or for internal use only, whether or not owned by Schwab. “Trade Secrets” is any information that (i) has economic value from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its use; and (ii) Schwab takes reasonable steps to protect as secret. “Intellectual Property” is Schwab’s copyrighted materials, trademarks, service marks, logos, patents, Trade Secrets, and other intellectual property and proprietary rights.

			
	
			
				 3.
			

			
	
			
			Agreement Not to Solicit. While I work for Schwab and for 18 months after my employment ends, I will not directly or indirectly solicit or induce: (a) any existing or prospective Schwab clients I serviced or about whom I gained Confidential Information (other than those listed in Exhibit A) in an attempt to divert, transfer, or otherwise take away business or prospective business from Schwab; and/or (b) any Schwab employee or contingent worker to leave his or her employment or engagement with Schwab.

			
	
			
				 4.
			

			
	
			
			Removal and Return of Schwab Property. I will not remove any Schwab property, including any Confidential Information and/or Intellectual Property, in original or copied form, in either electronic or hardcopy form, except as required for me to carry out my job duties while employed by Schwab. Upon termination of my employment with Schwab for any reason, my acceptance of other employment, or at Schwab’s request, I will immediately return to Schwab all Schwab property and documents, including but not limited to Confidential Information and/or Intellectual Property; any Schwab-issued credit cards, security badges, keys and Secure ID tokens; and all Schwab-issued electronic and telephonic equipment including but not limited to computers, mobile phones, personal data assistants, CD-ROMs, DVDs, floppy disks, Zip drives, USB storage devices, flash drives, memory cards, or other electronic devices (“Electronic Devices”).

			
	
			
				 5.
			

			
	
			
			Obligation to Protect Confidential Information and Intellectual Property. I will promptly notify Schwab if I become aware of or suspect any unauthorized use or disclosure of Confidential Information and/or Intellectual Property by me or anyone else, whether intentional or accidental.

			
	
			
				 6.
			

			
	
			
			Schwab’s Ownership of Intellectual Property “Developments.”

			
	
			
				 a.
			

			
	
			
			Disclosure of Developments While Employed by Schwab. I will promptly disclose in confidence to Schwab all inventions, improvements, designs, original works of authorship, and processes, including but not limited to all computer software programs and databases, whether or not protected or capable of protection under intellectual property or other laws, as well as all works based upon, derived from, reduced from, collecting, containing or making use of any of the foregoing or of any other Confidential Information or Intellectual Property of Schwab (collectively, “Developments”) that I create, make, conceive, implement, or first reduce to practice, either alone or with others, while I am employed by Schwab, and: (a) result from any work I perform for Schwab, whether or not in the normal course of my employment or during normal business hours; (b) reasonably relate to the actual or anticipated business, research or development of Schwab; or (c) are developed with the use of Schwab resources, facilities, Confidential Information and/or Intellectual Property.

			
	
			
				 b.
			

			
	
			
			Help in Confirming Ownership. I must promptly disclose Developments to Schwab whether or not the Developments are patentable, copyrightable, or protectable as Trade 
		

		 

		

			2.

		

 

			Secrets. I agree all Developments will be the exclusive property of Schwab, and I irrevocably assign to Schwab all rights, title, and interest I may have or acquire in and to the Developments and the right to secure registrations, renewals, reissues, and extensions in the Developments. I will sign any documents and do all things necessary, whether during my employment or after, to assist Schwab to register, perfect, maintain and enforce Schwab’s rights in any Developments, without any additional compensation. If I fail or refuse for any reason to sign any document Schwab requires to perfect its ownership of the Developments, I appoint Schwab as my attorney-in-fact (this appointment to be irrevocable and to be a power coupled with an interest) to act on my behalf and to execute all such documents.

			
	
			
				 c.
			

			
	
			
			State Laws Relating to Ownership of Developments. I understand if I am or become a California resident while employed by Schwab, then this Paragraph 6 will not apply to any Developments which fully qualify under Section 2870 of the California Labor Code, attached as Exhibit B to this Agreement. To the extent other similar laws may apply to residents of other states, the terms of Paragraph 6 shall be limited solely to the extent provided by the applicable laws of such states.

			
	
			
				 d.
			

			
	
			
			Pre-Existing Intellectual Property. To the extent I have any pre-existing patent, trademark, or copyright registrations, I have listed them in Exhibit C. I understand Schwab does not want to use any other person’s intellectual property unlawfully. I agree to indemnify and hold Schwab harmless against any liability, and pay any loss or expense Schwab incurs, arising out of any claim that I misappropriated or infringed proprietary rights of a former employer or any other third party.

			
	
			
				 7.
			

			
	
			
			Permissible Disclosure of Confidential Information and/or Intellectual Property. I can only use or disclose Confidential Information and/or Intellectual Property to the extent: (a) necessary to perform my job duties at Schwab; (b) I receive advance written permission from an authorized senior or executive officer of Schwab; (c) I am legally compelled by subpoena or other legal process to disclose the Confidential Information and/or Intellectual Property, subject to the procedures in Paragraph 9; or (d) disclosure is sought by a government entity, regulatory agency, or self regulatory organization, subject to the procedures in Paragraph 9. I understand that Schwab’s policy prohibits departing employees from taking client lists and account information.

			
	
			
				 8.
			

			
	
			
			Questions About Confidential Information and/or Intellectual Property. If I am unsure whether information is Confidential Information and/or Intellectual Property, I will treat it as Confidential Information and/or Intellectual Property unless I receive advance written permission from an authorized senior or executive officer of Schwab.

			
	
			
				 9.
			

			
	
			
			Subpoenas and Other Legal Requests for Disclosure. I will give Schwab prompt notice in writing before disclosing any Confidential Information and/or Intellectual Property under Paragraph 7 subsections (c) and (d). If Schwab does not obtain an order preventing the disclosure, I agree to disclose only that Confidential Information and/or Intellectual Property that I am legally compelled to disclose and to exercise reasonable efforts to ensure that the Confidential Information and/or Intellectual Property will be treated confidentially.

			
	
			
				 10.
			

			
	
			
			Discovery and Injunctive Relief. In the event I violate, or Schwab reasonably believes I am about to violate, this Agreement, I agree Schwab is entitled to injunctive relief to prevent the violation(s) and/or preserve the status quo. I agree that in any proceeding alleging breach of this Agreement, each party shall have the right to engage in deposition and document discovery, and Schwab shall have the right to conduct forensic examination(s) of Electronic Devices in my possession or control, if Schwab reasonably believes such devices contain Confidential Information and/or Intellectual Property. I further agree that in connection with any application for injunctive relief, discovery shall be conducted on an expedited basis. If any dispute under this 
		

		 

		

			3.

		

 

			Agreement is arbitrable, then I understand my agreement to engage in discovery as outlined in this paragraph is an essential term of my arbitration agreement with Schwab, and these provisions are intended to supplement and modify any applicable arbitration rules.

			
	
			
				 11.
			

			
	
			
			Liquidated Damages. If I solicit clients or employees in violation of Paragraph 3, and/or use or disclose Confidential Information relating to clients and/or their accounts in violation of Paragraph 1, I understand Schwab will suffer damages that may be difficult to quantify at the time of the violation, including, but not limited to: costs associated with investigating, monitoring, or remedying the misuse of Confidential Information; costs associated with maintaining, restoring or repairing Schwab’s relationship with current and prospective clients; revenue lost from client assets diverted or transferred; costs associated with replacing employees, including recruiting, hiring and training replacement employees, and lost productivity. Therefore, if I violate Paragraph 3, and/or Paragraph 1 relating to clients and/or their accounts, I agree to pay Schwab the following liquidated damages: (a) four percent (4%) of any client assets diverted from Schwab for any client who was solicited and/or whose Confidential Information was used or disclosed; and/or, (b) seventy-five percent (75%) of the most recent full year’s total annual compensation paid by Schwab to each employee solicited or induced to leave his or her employment. I agree that these formulas represent reasonable estimates of the compensatory damages that Schwab will incur as a result of violations of Paragraph 3 and/or Paragraph 1 relating to clients and/or their accounts, and are not a penalty. These liquidated damages are in addition to any other non-compensatory relief that Schwab may be entitled to, including but not limited to injunctive relief and/or punitive damages.

			
	
			
				 12.
			

			
	
			
			General Provisions. I agree that if Schwab or I bring an action to enforce any provision of this Agreement, the prevailing party shall be entitled to attorneys’ fees and costs to enforce such claim. If any provision of this Agreement is found to be invalid or unenforceable, I agree that such provision should be deemed modified to the extent necessary to make it enforceable. If a court or arbitration panel declines to amend the provision to make it enforceable, then the remaining provisions of this Agreement shall remain in full force and effect. The terms of this Agreement and any disputes arising out of it shall be governed by, and construed in accordance with, the laws of the state in which I was last employed by Schwab, without giving effect to such state’s conflict of law principles. I agree that this Agreement supplements any prior agreements I have with Schwab, all of which remain in full force and effect.

		
			EXHIBIT A
List of family members and other relatives (identified by familial status) and individuals or entities to whom I provided financial services prior to joining Schwab:

X click here to electronically inital Exhibit A
		

		
			 
		

		
			EXHIBIT B
California Labor Code Section 2870 
		

			
	
			
				 a.
			

			
	
			
			Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

		 

		

			4.

		

 

			
	
			
				 1.
			

			
	
			
			Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

			
	
			
				 2.
			

			
	
			
			Result from any work performed by the employee for the employer.

			
	
			
				 b.
			

			
	
			
			To the extent that a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

		
			X click here to electronically inital Exhibit B 
		

		
			 
		

		
			EXHIBIT C
Pre-Existing Intellectual Property Registrations:

X click here to electronically inital Exhibit C
		

		
			Signature
I represent that I am the individual indicated in the “Work Contact Information” section in the upper left hand corner of this screen, that I accessed this screen by logging in to the Schwab network and using my unique password, and that I have not shared my password with anyone.

By clicking “I Agree” below I am creating a binding contract with Schwab, just as enforceable as if it were a handwritten signature.
		

		
			I Agree
		

		
			 
		

		 

		

			5.

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