Document:

Exhibit

Exhibit 10.37

Execution Copy
SEVERANCE AGREEMENT
 SEVERANCE AGREEMENT (the “Agreement”) dated as of September 25, 2017, by and between PQ Corporation, a Pennsylvania corporation (the “Company”), a wholly-owned subsidiary of PQ Group Holdings Inc., a Delaware corporation (“Holdings), and Joseph S. Koscinski (the “Executive”).
WHEREAS, the Executive currently serves as Vice President, Secretary and General Counsel of the Company;
WHEREAS, the Executive is party to that certain Offer of Employment between the Executive and the Company dated September 18, 2015 (the “Offer Letter”); and
WHEREAS, the Agreement is intended to help retain the Executive and provide financial security to the Executive under circumstances entitling him to separation pay as provided herein; and
NOW, THEREFORE, in consideration of the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS

Section 1.01    Definitions. Capitalized terms used in the Agreement shall have the following respective meanings, except as otherwise provided or as the context shall otherwise require:
“Accrued Obligations” shall have the meaning set forth in Section 3.01(a).
“Affiliate’’ shall mean any company or other entity controlled by, controlling or under common control with Holdings.
“Annual Bonus” shall mean an annual bonus paid to the Executive under the Company’s (or Holdings’) annual incentive bonus plans or programs based upon the achievement of performance objectives established by the Board or Compensation Committee each year.
 “Base Salary” shall mean the base salary (inclusive of any amounts deferred on a pre-tax basis pursuant to Code Sections 125, 132 or 401(k)) paid to the Executive immediately prior to the Termination Date on an annual basis (or, in the case of a termination for Good Reason due to prong (i) of section (B) of such definition, as in effect immediately prior to the reduction of the such Base Salary), exclusive of any Annual Bonus or other bonus payments or additional payments under any Benefit Plan.
“Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
“Benefit Plan” shall mean any “employee benefit plan” (including any employee benefit plan within the meaning of Section 3(3) of ERISA), program, arrangement or practice maintained, sponsored or provided 

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by the Company or Holdings, including but not limited to those relating to compensation, bonuses, profit-sharing, stock option, or other stock related rights or other forms of incentive or deferred compensation, paid time off benefits, insurance coverage (including any self-insured arrangements), health or medical benefits, disability benefits, life insurance benefits, workers’ compensation, supplemental unemployment benefits, travel reimbursements, car allowances, moving expenses, taxable fringe benefits, gross-up payments to neutralize tax effects, separation pay and post-employment or retirement benefits (including compensation, pension, health, medical or life insurance or other benefits).
“Benefits” shall mean benefits the Executive may is entitled to due to his coverage or participation in the Benefit Plans.
“Board” shall mean the Board of Directors of Holdings.
 “Cause” shall mean:
(A)the Executive’s failure to perform such lawful duties reasonably requested by the CEO or Board, which failure, if susceptible of cure, remains uncured or continues or recurs thirty (30) days after the Executive’s receipt of written notice from the Board specifying in reasonable detail the nature of such failure, provided, however, that it is understood that this clause (A) shall not permit the Company to terminate the Executive’s employment for Cause because of dissatisfaction with the quality of services provided by or disagreement with the actions taken by the Executive in the good faith performance of the Executive’s duties to the Company;

(B)the Executive’s failure to observe any material written policies of Holdings, the Company or their Affiliates of which the Executive has notice;

(C)the Executive’s gross negligence, willful disregard or willful misconduct in the performance of Executive’s duties;

(D)the Executive’s conviction, guilty plea or plea of nolo contendere of a felony or his commission of any act that the Board determines is involving moral turpitude, fraud or theft;

(E)the Executive materially breaching a fiduciary duty with respect to Holdings, the Company or their Affiliates;

(F) a material breach of this Agreement by the Executive; or

(G) any acts of dishonesty undertaken by the Executive with respect to the Company, Holdings or their Affiliates and intended to result in substantial enrichment, at the Company’s, Holdings’ or their Affiliates’ expense.
“Change in Control” shall mean the first to occur of any of the following events:
(A) Any Person, becomes the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the combined voting power, excluding any Person who holds fifty percent (50%) or more of the voting power on the Effective Date (the “Initial Owners”), of the then outstanding voting securities of Holdings entitled to vote generally in the election of its directors (the “Outstanding Holdings Voting Securities”) including by way of merger, consolidation or otherwise; provided, 

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however, that for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (i) any acquisition of voting securities of Holdings directly from Holdings, including without limitation, a Public Offering of securities; (ii) any acquisition by Holdings or any of its Subsidiaries of Outstanding Holdings Voting Securities, including an acquisition by any employee benefit plan or related trust sponsored or maintained by Holdings or any of its Subsidiaries; or (iii) any acquisition after which the Initial Owners and their Affiliates remain the Beneficial Owners of more Outstanding Holdings Voting Securities than any other Person.
(B) Consummation of a reorganization, merger, or consolidation to which Holdings is a party or a sale or other disposition of all or substantially all of the assets of Holdings (a “Business Combination”), unless, following such Business Combination: (i) any individuals and entities that were the Beneficial Owners of Outstanding Holdings Voting Securities immediately prior to such Business Combination are the Beneficial Owners, directly or indirectly, of more than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (or election of members of a comparable governing body) of the entity resulting from the Business Combination (including, without limitation, an entity which as a result of such transaction owns all or substantially all of Holdings or all or substantially all of Holdings’ assets either directly or through one or more Subsidiaries) (the “Successor Entity”) in substantially the same proportions as their ownership immediately prior to such Business Combination; (ii) no Person (excluding any Successor Entity or any employee benefit plan or related trust of Holdings, such Successor Entity, or any of their Subsidiaries) is the Beneficial Owner, directly or indirectly, of more than fifty percent (50%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or comparable governing body) of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors (or comparable governing body) of the Successor Entity were incumbent directors (including persons deemed to be incumbent directors) at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination.
Notwithstanding the foregoing, to the extent necessary to comply with Section 409A with respect to the payment of “nonqualified deferred compensation,” “Change in Control” shall be limited to a “change in control event” as defined under Section 409A.  For the avoidance of doubt, neither a Public Offering nor any changes to the size or members of the Board in connection with or as a result of a Public Offering shall constitute or be deemed to result in a Change in Control.
For purposes of this definition of “Change in Control” the terms “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
“COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

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“Code Section 409A” shall mean Section 409A of the Code and the Treasury regulations and other interpretive rulings and guidance issued thereunder.
“Common Stock” means Holdings’ common stock, par value $0.01 per share, as the same may be reclassified, exchanged or recapitalized.
“Compensation Committee” shall mean the Compensation Committee of the Board.
 “Confidential Information” shall mean information that is not generally known to the public and that is or was used, developed or obtained by Holdings, the Company, or any of their Affiliates, including, but not limited to the following: (i) information, observations, procedures and data known by the Executive as a consequence of his employment with, or direct or indirect services as agent, employee or consultant, to or on behalf of, the Company or Holdings or any Affiliates of either of them concerning the business or affairs of Holdings, the Company or any of their Affiliates; (ii) products or services; (iii) costs and pricing structures; (iv) analyses; (v) drawings, photographs and reports; (vi) computer software, including operating systems, applications and program listings; (vii) flow charts, manuals and documentation; (viii) data bases; (ix) accounting and business methods; (x) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice; (xi) customers, vendors, suppliers and customer, vendor and supplier lists; (xii) other copyrightable works; (xiii) all production methods, processes, technology and trade secrets and (xiv) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public prior to the date the Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.
“Disability” shall mean the inability to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of no less than 12 months as within the scope of the Company’s long term disability plan, as in effect from time to time, or if no such plan is in effect, “Disability” means “permanent and total disability” as defined in Code Section 22(e)(3).
“Effective Date” shall mean August 31, 2017.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder from time to time.
“Good Reason” shall mean, when used with reference to the Executive, any of the following actions or failures to act, but in each case only if it occurs while the Executive is employed by the Company and then only if it is not consented to by the Executive in writing:
(A)a material reduction in Executive’s title, authority, duties or responsibilities, excluding isolated or immaterial actions;
(B)    a material reduction in: (i) the Executive’s Base Salary or (ii) the target bonus opportunity with respect to his Annual Bonus, other than an across-the-board reduction in Base Salary or bonus opportunity for all of the members of the Company’s management team;

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(C)    a demand by the Company that the Executive must relocate from his primary residence unless the Executive and the Company are in mutual agreement regarding such relocation; or
(D)    a material breach by the Company of this Agreement.
The foregoing notwithstanding, for purposes of this definition, none of the actions described in clauses (A) through (D) above shall constitute “Good Reason” with respect to the Executive if it was an isolated and inadvertent action not taken in bad faith by the Company and if it is remedied by the Company within 30 days after receipt of written notice thereof given by the Executive as provided in the paragraph below. In the case of a demand from the Company that the Executive must relocate from his primary residence, as described in clause (C), the Executive must give the Company written notice within 30 days of the time the Company makes such relocation request. In the case of the actions described in clauses (A) through (D), if the matter is not capable of being remedied within 30 days, then such remedy needs to occur within a reasonable period of time following such 30-day period, provided that the Company has commenced such remedy within said 30-day period.
If the Executive believes that an event constituting Good Reason has occurred, the Executive must notify the Company in writing of that belief within 30 days of the occurrence of the Good Reason event, which notice will set forth the basis for that belief. The Company will have 30 days after receipt of such notice (or, if the matter is not capable of remedy within 30 days, then within a reasonable period of time following such 30-day period, provided that the Company has commenced such remedy within said 30- day period) (the “Determination Period”) in which to rectify such event, determine that an event constituting Good Reason does not exist, or determine that an event constituting Good Reason exists. If the Company does not take any of such actions within the Determination Period, the Executive may terminate his employment with the Company for Good Reason within the 30 day period following the end of the Determination Period by giving written notice to the Company in accordance with the provisions of Section 2.01, which termination will be effective on the Termination Date; if the Executive does not so terminate his employment within such time period his ability to terminate employment for Good Reason shall cease to exist upon the end of such period. If the Company determines that Good Reason does not exist, then (A) the Executive will not be entitled to rely on or assert such event as constituting Good Reason, and (B) the Executive may pursue his remedies under this Agreement within 30 days after the Executive’s receipt of written notice of the Company’s determination.
“Person,” except as otherwise provided in this Agreement,  shall be construed broadly and shall include, without limitation, an individual, a partnership, an investment fund, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
“Public Offering” means the sale of shares of the Common Stock to the public pursuant to an effective registration statement (other than a registration statement on Form S-4 or S-8 or any similar or successor form) filed under the Securities Act in connection with an underwritten offering.
“Severance Continuation Period” shall mean the 24-month period following the Termination Date.
“Subsidiary” means any corporation, partnership, limited liability company or other entity, a majority of whose outstanding voting securities are owned, directly or indirectly, by Holdings.

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“Target Bonus Payment” shall mean, for any given year, an amount equal to the Executive’s target bonus opportunity (expressed as a percentage of Base Salary) with respect to his Annual Bonus (without proration).
“Termination Date” shall mean the date on which the Executive is no longer employed by, and has a “separation from service” (within the meaning of Code Section 409A) from, the Company and its Affiliates.
“Termination Notice” shall mean, as appropriate, written notice from (a) the Executive to the Company purporting to terminate the Executive’s employment for or without Good Reason in accordance with Section 2.01 or (b) the Company to the Executive purporting to terminate the Executive’s employment for Cause or Disability in accordance with Section 2.02.
“Termination Year” shall mean the calendar year during which the Termination Date occurs.
“Work Product” shall mean all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, tradenames, logos and all similar or related information (whether patentable or unpatentable) which relates to the Company’s, Holdings’ or any of its or their Subsidiaries’ actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by the Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other Person) while employed by the Company together with all patent applications, letters patent, trademark, tradename and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.
Section 1.02    Interpretation. In the Agreement (a) the words “herein,” “hereof’ and “hereunder” refer to the Agreement as a whole and not to any particular Article, Section or other subdivision, (b) reference to any Article or Section, means such Article or Section hereof and (c) the words “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
ARTICLE II
ELIGIBILITY AND BENEFITS
Section 2.01    Termination Notices from Executive for Good Reason. For purposes of the Agreement, in order for the Executive to terminate his employment for Good Reason, the Executive must give a Termination Notice to the Company in accordance with the requirements specified under the definition of Good Reason in Section 1.01, which notice shall be signed by the Executive, shall be dated the date it is given to the Company, shall specify the Termination Date and shall state that the termination is for Good Reason and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Good Reason. In the event that the Executive voluntarily terminates his employment without Good Reason, the Executive must give a Termination Notice to the Company, which shall specify the Termination Date, which date shall not be less than 30 days from the date the Termination Notice is given.  In such cases, the Board may, in its discretion, accelerate the effective date of such termination of employment and pay the Executive Base Salary in lieu of such notice.
Section 2.02    Termination Notices from Company for Cause or Disability. For purposes of the Agreement, in order for the Company to terminate the Executive’s employment for Cause, the Company must give a Termination Notice to the Executive, which notice shall be in writing and dated the date it is 

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given to the Executive, shall specify the Termination Date and shall state that the termination is for Cause and shall set forth in reasonable detail the particulars thereof. For purposes of the Agreement, in order for the Company to terminate the Executive’s employment for Disability, the Company must give a Termination Notice to the Executive, which notice shall be dated the date it is given to the Executive, shall specify the Termination Date and shall state that the termination is for Disability and shall set forth in reasonable detail the particulars thereof. Any Termination Notice given by the Company that does not comply, in all material respects, with the foregoing requirements shall be invalid and ineffective for purposes of the Agreement. Any Termination Notice purported to be given by the Company to the Executive after the death or retirement of such Executive shall be invalid and ineffective. Executive and his/her representative(s) will cooperate fully in providing all evidence that the Board needs to determine Disability.
ARTICLE III
SEVERANCE AND RELATED TERMINATION BENEFITS
Section 3.01    Termination of Employment.

(a)Voluntary Termination by Executive. In the event that the Executive’s employment is terminated by the Executive other than for Good Reason, then the Executive shall be paid, within 30 days following the Termination Date (unless applicable state law requires sooner payment), the following (with the benefits set forth in (1) and (2) collectively referred to as the “Accrued Obligations”):

		
	(1)
	the Base Salary through the Termination Date, to the extent not already paid, and any amounts due for paid time off or vacation bank through the Termination Date; and

		
	(2)
	reimbursement for any unreimbursed business expenses properly incurred by the Executive, in accordance with the Company’s applicable policy, prior to the Termination Date, to the extent such reimbursements are submitted to the Company within 30 days following the Termination Date.

Following the Executive’s termination of employment other than for Good Reason, except as set forth in this Section 3.01(a), the Executive shall have no further rights to any compensation or any other benefits in the nature of severance or termination pay or in connection with the termination of his employment.
(b)For Cause. In the event that the Executive’s employment is terminated by the Company for Cause, then the Executive shall be paid, within 30 days following the  Termination Date (unless applicable state law requires sooner payment), the Accrued Obligations through the Termination Date.
Following the Executive’s termination of employment by the Company for Cause, except as set forth in this Section 3.01(b), the Executive shall have no further rights to any compensation or any other benefits in the nature of severance or termination pay or in connection with the termination of his employment.
(c)Disability or Death. In the event that the Executive’s employment is terminated (i) by the Company by reason of the Executive’s Disability or (ii) as a result of the Executive’s death, then in either case, the following benefits shall be paid to the Executive or the Executive’s estate, as applicable:
		
	(1)
	the Accrued Obligations (at the time set forth in Section 3.01(a)); and

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	(2)
	within 60 days following the Termination Date, a lump-sum cash payment equal to the product of (i) the Target Bonus Payment and (ii) a fraction, the numerator of which is the number of days during which the Executive was employed by the Company in the Termination Year and the denominator of which is 365.

Following the Executive’s termination of employment due to death or Disability, except as set forth in this Section 3.01(c), the Executive shall have no further rights to any compensation or any other benefits in the nature of severance or termination pay or in connection with the termination of his employment.
(d)Without Cause or for Good Reason Before a Change in Control. In the event that the Executive’s employment is terminated before a Change in Control (i) by the Company without Cause (other than due to Disability or death) or (ii) by the Executive for Good Reason, then, subject to the provisions of Section 3.02 and Section 5.02(a) and (b) (under certain circumstances requiring a six month suspension of payments) hereof, in either case, the following benefits shall be paid to the Executive:
		
	(1)
	the Accrued Obligations (at the time set forth in Section 3.01(a));

		
	(2)
	a continuation of the Executive’s Base Salary during the Severance Continuation Period, which shall be paid at the same time and in the same manner as if the Executive had remained employed by the Company during such period; provided, however, that the payments normally payable during the 60-day period following the Termination Date shall be accrued and paid in a lump sum within five days following the end of such 60-day period;

		
	(3)
	a pro rata amount of the Annual Bonus, if any, which would have been payable for the calendar year in which such termination occurs, determined at the same time and in the same manner as would have occurred if the Executive’s employment had not been terminated during such calendar year and equal to the amount which would have been payable to the Executive if the Executive’s employment had not been terminated during such calendar year multiplied by a fraction, the numerator of which is the number of days the Executive was employed by the Company during such calendar year and the denominator of which is 365. Any pro rata Annual Bonus payable under this subsection shall be paid in a lump sum at the same time the Annual Bonus amounts would have been paid if the Executive’s employment had continued until the normal Annual Bonus payment date;

		
	(4)
	a cash payment equal to two (2) times the Target Bonus Payment for the year in which the Termination Date occurs (or, in the case of a termination for Good Reason due to prong (ii) of section (B) of such definition, based on the target bonus opportunity immediately prior to any reduction of it), payable in as nearly equal installments as possible over the Severance Continuation Period, provided, however, that the payments normally payable during the 60-day period following the Termination Date shall be accrued and paid in a lump sum within five days following the end of such 60-day period; and

		
	(5)
	during the Severance Continuation Period, the Executive and his eligible dependents as of the Termination Date shall continue to be covered by all medical, vision and dental Benefit Plans (excluding disability and life 

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insurance) maintained by the Company, and at the same single / family / spouse only / other option, under which the Executive was covered immediately prior to the Termination Date (collectively, the “Continued Health Benefits’’) at the same active Executive premium cost as a similarly situated active executive; provided, however, in any case such Benefits shall cease if the Executive becomes entitled to medical benefits, dental and vision benefits from a new employer as provided in Section 3.03(a). The Company may provide such medical, vision and dental benefits by reimbursing Executive for his cost for COBRA (or, if the Company determines it is possible, by making other arrangements to relieve Executive of such cost) in an amount equal to what the Company was previously paying on behalf of Executive for such benefits through such Severance Continuation Period and comparable amounts if the COBRA continuation period expires prior to the expiration of the Severance Continuation Period.
Following the Executive’s termination of employment by the Company without Cause or by the Executive for Good Reason, except as set forth in this Section 3.01(d), the Executive shall have no further rights to any compensation or any other benefits in the nature of severance or termination pay or in connection with the termination of his employment.
(e)Without Cause or For Good Reason Following a Change in Control. In the event that the Executive’s employment is terminated within one year following a Change in Control either (i) by the Executive for Good Reason or (ii) by the Company without Cause (other than due to Disability or death), then, subject to provisions of Section 3.02 and Section 5.02(a) and (b) (under certain circumstances requiring a six month suspension of payments) hereof, in either case, the following benefits shall be paid to the Executive:
		
	(1)
	the Accrued Obligations (at the time set forth in Section 3.01(a));

		
	(2)
	a continuation of the Executive’s Base Salary during the Severance Continuation Period, which shall be paid at the same time and in the same manner as if the Executive had remained employed by the Company during such period; provided, however, that the payments normally payable during the 60-day period following the Termination Date shall be accrued and paid in a lump sum within five days following the end of such 60-day period;

		
	(3)
	a pro rata amount of the Annual Bonus, if any, which would have been payable for the calendar year in which such termination occurs, determined at the same time and in the same manner as would have occurred if the Executive’s employment had not been terminated during such calendar year and equal to the amount which would have been payable to the Executive if the Executive’s employment had not been terminated during such calendar year multiplied by a fraction, the numerator of which is the number of days the Executive was employed by the Company during such calendar year and the denominator of which is 365. Any pro rata Annual Bonus payable under this subsection shall be paid in a lump-sum at the same time the Annual Bonus amounts would have been paid if the Executive’s employment had continued until the normal Annual Bonus payment date;

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	(4)
	a cash payment equal to two (2) times the Target Bonus Payment for the year in which the Termination Date occurs (or, in the case of a termination for Good Reason due to prong (ii) of section (B) of such definition, based on the target bonus opportunity immediately prior to any reduction of it), payable in as nearly equal installments as possible over the Severance Continuation Period, provided, however, that the payments normally payable during the 60-day period following the Termination Date shall be accrued and paid in a lump sum within five days following the end of such 60-day period; and

		
	(5)
	during the Severance Continuation Period, the Executive and his eligible dependents as of the Termination Date shall continue to receive the Continued Health Benefits at the same active Executive premium cost as a similarly situated active executive; provided, however, in any case such Continued Health Benefits shall cease if the Executive becomes entitled to medical benefits, dental and vision benefits from a new employer as provided in Section 3.03(a). The Company may provide such medical, vision and dental benefits by reimbursing Executive for his cost for COBRA (or, if the Company determines it is possible, by making other arrangements to relieve Executive of such cost) in an amount equal to what the Company was previously paying on behalf of Executive for such benefits through such Severance Continuation Period and comparable amounts if the COBRA continuation period expires prior to the expiration of the Severance Continuation Period.

Following the Executive’s termination of employment within one year following a Change in Control either (i) by the Executive for Good Reason or (ii) by the Company without Cause, except as set forth in this Section 3.01(e), the Executive shall have no further rights to any compensation or any other benefits in the nature of severance or termination pay or in connection with the termination of his employment.
(f)Vested Benefits. Following the Executive’s termination of employment under Section 3.01(a), (b), (c), (d), or (e) he shall be entitled to payment or distribution of such vested Benefits, if any, as to which the Executive may be entitled under the Benefit Plans pursuant to the terms of the applicable plans then in effect. Notwithstanding the foregoing, nothing in this Agreement shall provide accelerated or enhanced vesting beyond the terms, conditions and provisions set forth in the Benefit Plans. With respect to entitlement to vested Benefits, in the event of conflict between this Agreement and the Benefit Plans, the Benefit Plans shall control.
(g)Treatment of Continued Health Benefits. The premium cost to the Company of providing any Continued Health Benefits which are medical, dental or vision benefits on a self-insured basis, will be timely reported to the Executive as taxable income, unless the Company determines that applicable law permits some other treatment. Any continued medical, dental or vision benefits provided to Executive and his dependents pursuant to Section 3.01(d) or (e) are provided concurrently with any rights the Executive and such dependents may have to continue such coverages under COBRA. The provisions of this Section 3.01 will not prohibit the Company from changing the terms of such Continued Health Benefits provided that any such changes apply to all similarly situated executives of the Company and its Affiliates (e.g., the Company may switch insurance carriers or preferred provider organizations).
Section 3.02    Condition to Receipt of Separation Pay. As a condition to receipt (or retention, as applicable) of any payment or amounts under Section 3.01(d) and (e), the Executive must (a) enter into a General Release and Waiver of Claims (“Release Agreement”) with the Company and its Affiliates in substantially the form attached as Exhibit A and (b) continue to comply with his obligations under Article 

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IV of this Agreement. The Executive must execute and return the Release Agreement to the Company no later than the time period established by the Company which shall be no longer than 45 days from the date Executive receives the Release Agreement, followed by a seven (7)-day revocation period following the date the Release Agreement is executed (“Revocation Period”). The Executive’s failure to timely execute and return the Release Agreement in accordance with the previous sentence, or the Executive’s revocation of the Release Agreement during the Revocation Period, will result in a forfeiture of all benefits payable to the Executive under the terms of the Agreement other than the Accrued Obligations and any vested Benefits described under Section 3.01(f).
Section 3.03    Limitation of Benefits.
(a)Anything in the Agreement to the contrary notwithstanding, the Company’s obligation to provide the Continued Health Benefits shall cease if and when the Executive becomes employed by a third party that provides such Executive with substantially comparable health and welfare benefits, subject to the Executive’s right to elect to continue coverage under COBRA at his own cost.
(b)Any amounts payable under the Agreement shall be in lieu of and not in addition to any other severance or termination payment under any other plan or agreement with the Company. As a condition to receipt of any payment under the Agreement, the Executive shall waive any entitlement to any other severance or termination payment by the Company, including any severance or termination payment set forth in an individual employment agreement with the Company. Notwithstanding the foregoing and subject to Section 3.01(f), nothing in this Section 3.03(b) shall abridge the Executive’s rights with respect to vested benefits under any Benefit Plan.
Section 3.04    Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if the Executive is a “disqualified individual” (as defined in Code Section 280G(c)), and the payments and benefits provided for in this Agreement, together with any other payments and benefits which the Executive has the right to receive from the Company or any of its Affiliates, would constitute a “parachute payment”(as defined in Code Section 280G(b)(2)), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by the Executive from the Company and its Affiliates will be one dollar ($1.00) less than three (3) times Executive’s “base amount”(as defined in Code Section 280G(b)(3)) and so that no portion of such amounts and benefits received by the Executive shall be subject to the excise tax imposed by Code Section 4999 or (b) paid in full, whichever produces the better net after tax position to the Executive (taking into account any applicable excise tax under Code Section 4999 and any other applicable taxes). The reduction of payments and benefits mentioned hereunder, as applicable, shall be made by reducing such payments and benefits first, to the extent of any severance payments due pursuant to Article 3 paid in cash, with later payments being reduced first. Thereafter, the reduction shall be made by: (A) the waiver of accelerated vesting of equity awards, with awards having a later vesting date being reduced first; (B) next, cutting back on the benefit continuation pursuant to Section 3; and (C) lastly, reducing all other payments or benefits, with later payments being reduced first. The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by Holdings in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its Affiliates) used in determining if a parachute payment exists, exceeds one dollar ($1.00) less than three (3) times the Executive’s base amount, then the Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. In the event any reduction under this Agreement is disputed by the Executive, then determinations required to be made under this Section 3.04, including the assumptions to be utilized in arriving at such determination, shall be made by an outside nationally recognized accounting or consulting firm selected by Holdings or the Board, in its reasonable discretion (the “Accounting Firm”), which shall provide detailed supporting 

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calculations both to Holdings and the Executive within 15 business days of the receipt of notice from the Executive that there has been a payment hereunder, or such earlier time as is requested by Holdings. In no event shall the Accounting Firm be an accounting firm that was, or is, serving as accountant or auditor for the individual, entity or group affecting the change of ownership or effective control of Holdings. Nothing in this Section 3.04 shall require the Company or Holdings (or any of their respective Affiliates) to be responsible for, or have any liability or obligation with respect to, the Executive’s excise tax liabilities under Code Section 4999.
Section 3.05     Unfunded; Executive’s Rights Unsecured. The Company shall not be required to establish any special or separate fund or make any other segregation of funds or assets to assure the payment of any benefit hereunder. The right of the Executive to receive the benefits provided for herein shall be an unsecured obligation against the general assets of the Company.
ARTICLE IV
CERTAIN AGREEEMENTS
Section 4.01    Nondisclosure and Nonuse of Confidential Information. The Executive will not disclose or use at any time, either during his employment with the Company or its Affiliates or thereafter, any Confidential Information of which the Executive is or becomes aware, except to the extent that (i) such disclosure or use is directly related to and required by the Executive’s performance of duties assigned to the Executive by the Company; (ii) to the extent that such disclosure is required in connection with any action by the Executive to enforce rights under this Agreement or (iii) such disclosure is required by a court of law, governmental agency, or by any administrative or legislative body with jurisdiction to order the Executive to divulge or disclose such Confidential Information; provided, that, the Executive shall provide ten (10) days prior written notice to the Company of any such requirement or order to disclose Confidential Information so that the Company may seek a protective order or similar remedy; and, provided, further, that, in each case set forth above, the Executive informs the recipients that such information or communication is confidential in nature. In addition, nothing in this Agreement limits, restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity. The Executive cannot be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (a) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed under seal in a lawsuit or other proceeding. Notwithstanding this immunity from liability, the Executive may be held liable if Executive unlawfully accesses trade secrets by unauthorized means.
Section 4.02    Inventions and Patents.  The Executive agrees that all Work Product belongs to the Company.  The Executive will promptly disclose such Work Product to the Board and perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including, without limitation, the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product.
Section 4.03    Non-Compete and Non-Solicitation. The Executive acknowledges and agrees with the Company that during the course of the Executive’s employment with the Company, the Executive will have the opportunity to develop relationships with existing employees, customers and other business associates of Holdings, the Company and their Subsidiaries (collectively, “PQ”) which relationships 

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constitute goodwill of PQ, and PQ would be irreparably damaged if the Executive were to take actions that would damage or misappropriate such goodwill.  Accordingly, the Executive agrees as follows:
(a)The Executive acknowledges that PQ currently conducts its business throughout the world (the “Territory”). Accordingly, during the Executive’s employment with the Company and during the 24-month period following the Termination Date (the “Non-Compete Period”), the Executive shall not, directly or indirectly, enter into, engage in, assist, give or lend funds to or otherwise finance, be employed by or consult with, or have a financial or other interest in, any Person that offers one or more products or services or engages in a business, in each case, that is directly competitive with a product or service or the business of PQ, as conducted or in active planning (a “Competitor”), whether for or by himself or in any other capacity.  To the extent that the covenant provided for in this Section 4.03(a) may later be deemed by a court to be too broad to be enforced with respect to its duration or with respect to any particular activity or geographic area, the court making such determination shall have the power to reduce the duration or scope of the provision, and to add or delete specific words or phrases to or from the provision.  The provision as modified shall then be enforced.  Notwithstanding the foregoing restriction, it shall not be a violation of this Section 4.03(a) for the Executive to work for a Competitor if: (i) the Executive works in a separate legal subsidiary or Affiliate that offers products or services or conducts a business, in each case, that is not directly competitive with PQ, (ii) the Executive informs Holdings in writing prior to accepting the position how such position complies with the terms of this subsection, and (iii) Holdings consents to Executive’s employment with such entity, which consent shall not be unreasonably withheld.
(b)Notwithstanding the foregoing, the aggregate ownership by the Executive of no more than two percent (on a fully-diluted basis) of the outstanding equity securities of any Person, which securities are traded on a national or foreign securities exchange, quoted on the NASDAQ stock market or other automated quotation system, and which Person competes with PQ (or any part thereof) within the Territory, shall not be deemed to be a violation of Section 4.03(a). In the event that any Person in which the Executive has any financial or other interest directly or indirectly enters into a line of business during the Non-Compete Period that competes with PQ or engages in the business of PQ within the Territory, the Executive shall divest all of his interest (other than as permitted to be held pursuant to the first sentence of this Section 4.03(b)) in such Person within 15 days after such Person enters into such line of business that competes with PQ or engages in such business within the Territory; provided that, in the event that such equity interest is not publicly traded, the Executive will divest such interest as promptly as practicable and, pending such divestiture, will recuse himself from any and all activities that would be in competition, whether directly or indirectly, with PQ or that would otherwise be precluded under Section 4.03(a).  For the avoidance of doubt, the immediately preceding sentence shall not be construed as an amendment, waiver or modification to any other term or provision of this Agreement, or to any restrictive covenant or other provision contained in any agreement between the Executive, Holdings, the Company or any Affiliate of any of them and in the event that the Executive does not promptly divest such interest and recuse himself from competitive activities with such non-public entity while attempting to divest his interest in such entity or engages in any activity that would otherwise be precluded under Section 4.03(a), the Executive’s termination shall be immediately deemed a termination of employment for Cause pursuant to the terms of this Agreement.
(c)The Executive covenants and agrees that during the Executive’s employment with the Company and during the 24‐month period following the Termination Date, except as expressly provided herein, the Executive will not, directly or indirectly, either for himself or for any other Person (i) solicit or attempt to induce any employee or consultant of PQ to terminate his employment; (ii) employ any employee or consultant of PQ during the period of his employment or consulting relationship with PQ; (iii) solicit any customer of PQ to purchase or distribute information, products or services of or on behalf of the Executive or such other Person that are competitive with the information, products or services provided by PQ or 

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(iv) take any action that may cause injury to or interfere with the relationships between PQ  or any of their employees and any lessor, lessee, vendor, supplier, customer, distributor, employee, consultant or other business associate of PQ or any of its Subsidiaries as such relationship relates to PQ’s conduct of its business.
(d)The Executive understands that the foregoing restrictions may limit his ability to earn a livelihood in a business similar to the business of the Company and any of its Affiliates, but he nevertheless believes that he has received and will receive sufficient consideration and other benefits as an employee of PQ and as otherwise provided hereunder or as described in the recitals hereto to clearly justify such restrictions which, in any event (given his education, skills and ability), the Executive does not believe would prevent him from otherwise earning a living.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01    Cumulative Benefits. Except as provided in Section 3.03(b), the rights and benefits provided to the Executive under the Agreement are in addition to and shall not be a replacement of, all of the other rights and benefits provided to such Executive under any Benefit Plan or any agreement between such Executive and the Company.
Section 5.02    Code Section 409A.
(a)It is intended that the payments and benefits provided under the Agreement shall be exempt from or comply with the application of the requirements of Code Section 409A.
(b)This Agreement shall be construed, administered and governed in a manner that affects such intent. For purposes of Code Section 409A, each payment made under this Agreement is intended to be a separate payment. Any taxable benefits or payments provided under the Agreement are intended to qualify for the “short-term deferral” exception to Code Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation (severance) pay exceptions to Code Section 409A, to the maximum extent possible. To the extent that none of these exceptions (or any other available exception) applies, then notwithstanding anything contained herein to the contrary, and to the extent required to comply with Code Section 409A, if the Executive is a “specified employee,” as determined by the Company in accordance with Code Section 409A, as of the Termination Date, then all amounts due under the Agreement that constitute a “deferral of compensation” within the meaning of Code Section 409A, that are provided as a result of a “separation from service” within the meaning of Code Section 409A, and that would otherwise be paid or provided during the first six months following the Termination Date, shall be accumulated through and paid or provided on the first business day that is more than six months after the date  of the Termination Date (or, if the Executive dies during such six -month period, within 90 days after the Executive’s death). In no event shall the Executive be permitted, directly or indirectly, to designate the taxable year of payment.
(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (iii) such payments shall be made on or before the last day of the Executive’s calendar year following the calendar year in which the expense occurred, or such earlier date as required hereunder. The payments and benefits provided under the Agreement may not be deferred, accelerated, extended, paid out or modified in a manner 

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that would result in the imposition of an additional tax, interest, penalties or other monetary amounts under Code Section 409A upon the Executive. Although the Company will use its best efforts to avoid the imposition of taxation, interest, penalties or other monetary amounts under Section 409A of the Code, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. None of the Company, Holdings or their Affiliates, or their respective directors, officers, executives or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Executive (or any other individual claiming a benefit through the Executive) as a result of the Agreement.
Section 5.03    No Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in the Agreement by seeking or accepting other employment following a termination of his employment with the Company or otherwise. Except as otherwise provided in Section 3.03, the amount of any payment provided for in the Agreement shall not be reduced by any compensation or benefit earned by the Executive as the result of employment by another employer or by retirement benefits. Except as set forth in Section 5.18 or as otherwise set forth herein, the Company’s obligations to make payments to the Executive required under the Agreement shall not be affected by any set off, counterclaim, recoupment, defense or other claim, right or action that the Company may have against such Executive.
Section 5.04    No Employment Rights Conferred. This Agreement shall not be deemed to create a contract of employment between the Executive and the Company and/or its Affiliates. Nothing contained in the Agreement shall (a) confer upon the Executive any right with respect to continuation of employment with the Company or (b) subject to the rights and benefits of the Executive hereunder, interfere in any way with the right of the Company to terminate the Executive’s employment at any time and for any reason.
Section 5.05    Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
Section 5.06    Notices. All notices, requests, demands, claims and other communications hereunder shall be in writing and sufficient if (i) delivered personally, (ii) delivered by certified United States Post Office mail, return receipt requested, (iii) telecopied or (iv) sent to the recipient by a nationally-recognized overnight courier service (charges prepaid) and addressed to the intended recipient as set forth below:
if to the Executive, to him at his most recent address in the Company’s records,
	
		
	if to Holdings or the Company:
	PQ Corporation
300 Lindenwood Drive
Valleybrooke Corporate Center
Malvern, PA 19355-1740

	 
	Attention: William J. Sichko, Jr.,
Chief Administrative Office
Facsimile: 610-651-4273;

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or such other address as the recipient party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall deemed to have been delivered and received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of delivery by mail, on the third business day following such mailing, (c) if telecopied, on the date telecopied, and (d) in the case of delivery by nationally-recognized, overnight courier, on the business day following dispatch.
Section 5.07    Enforcement. Because the Executive’s services are unique and because the Executive has access to Confidential Information and Work Product, the parties hereto agree that money damages would be an inadequate remedy for any breach of this Agreement.  Therefore, in the event of a breach or threatened breach of this Agreement, the Company or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof (without posting a bond or other security).
Section 5.08    Entire Agreement. This Agreement, the agreements and documents referenced herein, including but not limited to the Benefit Plans, and the General Release and Waiver of Claims embody the complete agreement and understanding among the parties and supersede and preempt any prior or contemporaneous understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including but not limited to, the Offer Letter and any other employment agreement or offer letter.  As of the Effective Date, the Offer Letter shall terminate and be of no further force or effect.
Section 5.09    Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The parties hereto agree to accept a signed facsimile copy of this Agreement as a fully binding original.
Section 5.10    Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Executive and the Company and their respective successors, assigns, heirs, executors, administrators, legal representatives and estate, as the case may be, provided, however, that the obligations of the Executive under this Agreement shall not be assigned without the prior written consent of the Company.
Section 5.11    Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement or any provision hereof.
Section 5.12    Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the Commonwealth of Pennsylvania without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the Commonwealth of Pennsylvania.
Section 5.13    Descriptive Headings; Nouns and Pronouns. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa.
Section 5.14    Taxes. The Company shall have the power to withhold, or require the Executive to remit to the Company, as the case may be, promptly upon notification of the amount due, an amount sufficient to satisfy the amount of all Federal, state, local and foreign withholding tax requirements with respect to any 

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payment of cash, or issuance or delivery of any other property hereunder to the Executive or any third party, and the Company may defer any such payment of cash or issuance or delivery of such other property until such requirements are satisfied.
Section 5.15    Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. Each party certifies and acknowledges that (i) no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver, (ii) each such party understands and has considered the implications of this waiver, (iii) each such party makes this waiver voluntarily, and (iv) each such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 5.15.
Section 5.16    Arbitration. The parties agree that any dispute, controversy, or claim arising out of or related in any way to this Agreement or any breach of this Agreement, or to any matter relating to Executive’s employment with the Company and his separation therefrom, including but not limited to any disputes between Executive and employees and/or agents of Holdings, the Company and their affiliates, shall be submitted to and decided by binding arbitration in (i) at the election of Holdings, Philadelphia, PA or the county in which Holdings’ or the Company’s headquarters are then located or (ii) if the Executive and Holdings mutually agree in writing, any other location. Arbitration shall be administered under the laws of the American Arbitration Association in accordance with Commercial Arbitration Rules (“AAA”) in effect at the time the arbitration is commenced. The arbitration will be held before a panel of three arbitrators, unless the parties agree to have a single arbitrator hear the case. To the extent not provided for in the AAA, the Arbitrator has the power to order discovery upon a showing that discovery is necessary for a party to have a fair opportunity to present a claim or defense. This Agreement to arbitrate covers all grievances, disputes, claims, or causes of action that otherwise could be brought in a federal, state, or local court or agency under applicable federal, state, or local laws, arising out of or relating to Executive's severance with, including claims Executive may have against Holdings, the Company, their Affiliates or against their officers, directors, supervisors, managers, employees, or agents in their capacity as such or otherwise, or that Holdings or the Company may have against Executive, provided however, that nothing in this Section 5.16 or otherwise shall prohibit Holdings, the Company or its Affiliates from enforcing any matter set forth in Article IV in a court of competent jurisdiction. Except as related to matters set forth in Article IV hereof, any arbitral award determination shall be final and binding upon the parties. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. All proceedings and communications will be kept confidential by the parties, their counsel and other agents, as well as by the arbitrator. If any provision of this agreement to arbitrate is adjudged to be void or otherwise unenforceable, in whole or in part, the void or unenforceable provision shall be severed and such adjudication shall not affect the validity of the remainder of this agreement to arbitrate. This agreement to arbitrate shall survive the termination of Executive's employment. It can only be revoked or modified in writing signed by both parties that specifically states an intent to revoke or modify this agreement to arbitrate.
Section 5.17    Further Assurances. Each party hereto agrees with the other party hereto that it will cooperate with such other party and will execute and deliver, or cause to be executed and delivered, all such other instruments and documents, and will take such other actions, as such other parties may reasonably request from time to time to effectuate the provisions and purposes of this Agreement.
Section 5.18    Clawback. If Holdings is required to prepare an accounting restatement due to the material noncompliance of Holdings, as a result of misconduct, with any financial reporting requirement under the securities laws, then, if the Executive is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, Executive will reimburse Holdings or the Company for the 

17

amount required to be reimbursed under the Sarbanes-Oxley Act of 2002. Holdings also may seek to recover by the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other clawback, forfeiture or recoupment provision required by applicable law. In addition, this Agreement and the payments and benefits hereunder are subject to forfeiture or other penalties pursuant to any clawback or forfeiture policy of Holdings or the Company, as in effect from time to time.
Section 5.19    Legal Review. The Executive hereby represents that the Executive has had the opportunity to review this Agreement carefully and to consult with counsel prior to the execution of this Agreement and that the Executive does fully understand all the terms of this Agreement.
****************

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

PQ CORPORATION

By: /s/ William J. Sichko, Jr.
Name: William J. Sichko, Jr.
Title: Chief Administrative Officer

EXECUTIVE

/s/ Joseph S. Koscinski

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EXHIBIT A
FORM OF GENERAL RELEASE AND WAIVER OF CLAIMS
This General Release and Waiver of Claims (hereafter “Agreement”) is entered into by and between PQ Corporation, a Pennsylvania corporation (the “Company”), and __________ (the “Executive”) on ____________.
In consideration of the mutual promises and covenants contained herein and the Severance Agreement dated August __, 2017 (the “Severance Agreement”), and other good and valuable consideration, the receipt of which hereby is acknowledged, the parties agree as follows:
Section 1.    Release and Waiver of Claims. Effective as of __________________, in consideration of the payments, benefits, and other considerations provided to the Executive under the Severance Agreement, the Executive, for the Executive and the Executive’s family, heirs, executors, administrators, legal representatives, and their respective successors and assigns (the “Related Parties”), hereby releases and forever discharges the Company, and all of its parents, affiliates, subsidiaries, divisions and joint ventures, and their respective officers, directors, Executives, agents, parents, stockholders, representatives, employee benefit plans and their successors and assigns (collectively, “Company Entities”), from all rights, claims, demands, suits, causes of action of any kind or nature whatsoever, known or unknown, in law or in equity the Executive ever had, has or may have or which the Related Parties may have, arising at any time on or before the date hereof, based on or arising out of the Executive’s dealings with any Company Entity, including but not limited to any claims arising out of the Executive’s employment with any Company Entity or the termination of that employment, including without limitation any claims under the Severance Agreement, or based on any services provided to any Company Entity by the Executive other than pursuant to an employment relationship with any Company Entity. This includes a release of any and all rights, claims or demands the Executive may have, whether known or unknown, under the Age Discrimination in Employment Act (“ADEA”), which prohibits age discrimination in employment; Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; or under any other federal, state or local laws or regulations regarding employment discrimination or termination of employment. This also includes a release by the Executive of any claims for wrongful discharge or discrimination under any statute, rule, regulation or under the common law, including, without limitation, the Sarbanes-Oxley Act.
Section 2.    Rights Not Released or Waived. This release is intended to be a general release and excludes only those claims under any statute or common law that Executive is legally barred from releasing. Executive understands that the release does not include and the parties hereto expressly reserve: (i) any claim that cannot be released or waived as a matter of law; (ii) any claim for or right to vested benefits in accordance with the Company’s employee benefit plans and equity arrangements, including but not limited to any pension or retirement account benefits, but specifically excluding, among other plans, any other severance plan or policy; (iii) any right to enforce any term of this Agreement and any surviving provisions of the Severance  Agreement; (iv) any claims based on acts or events occurring after Executive signs this Agreement, except for claims arising from Executive’s employment or termination of employment with Company, up to and through the date Executive signs this Agreement; (v) any claims with respect to indemnification or coverage under directors’ and officers’ liability insurance or any challenge to the validity of the Agreement; (vi) any prohibition on the filing of a charge or complaint with, or testimony, assistance or participation in, any investigation, proceeding or hearing conducted by any federal, state or local governmental agency, including but not limited to the Equal Employment Opportunity Commission (“EEOC”) and to report violations of any law administered by the Occupational 

Safety and Health Administration (“OSHA”), or make other disclosures protected under the whistleblower provisions of state or federal law or regulation; or (vii) receive any financial awards from OSHA or the SEC for reporting possible violations of federal law or regulation in cases where the law prohibits employees from waiving their rights to receive such payments.
Section 3.    Affirmations. (a) Executive represents and agrees by signing this Agreement that he has not been denied any leave or benefit requested, has received the appropriate pay for all hours worked for Company and has no known workplace injuries or occupational diseases.
(b) Executive further affirms that he has been paid and/or has received all leave (paid or unpaid), compensation, wages, bonuses and/or commissions to which Executive may be entitled and that no other leave (paid or unpaid), compensation, wages, bonuses and/or commissions are due to Executive, except as provided under Article III of the Severance Agreement.
(c) If any administrative agency or court assumes jurisdiction of any charge, complaint, proceeding or action including a claim or course of action released in Section 1 of this Agreement, Executive agrees not to accept, recover or receive any monetary damages or other relief from or in connection with such claim or cause of action, including but not limited to from charges filed with the EEOC.
(d) The separation pay being received by Executive is compensation that Executive is not entitled to receive in the absence of this Agreement.
(e) Executive has returned to the Company all property and information belonging to the Company, including, but not limited to the following (where applicable): computers (desktop and laptop); phone; tablet; iPad; devices (including usb, external hard drives, etc.); handheld devices; keys, access cards, passwords, and/or ID cards; all electronically stored and paper copies of all financial data, customer information, business plans and reports, and Company files; and all records, customer lists, written information, forms, plans, and other documents, including electronically stored information. Executive shall search Executive's electronic devices, device back-ups, residence, and automobile and agrees that by signing below, Executive represents that Executive has returned all such property in his possession or control.
(f) Executive acknowledges and agrees that he remains bound by the restrictions contained in Article IV of the Severance Agreement.
Section 4.    Release and Waiver of Claims Under the Age Discrimination in Employment Act. Executive acknowledges that the Company has encouraged the Executive to consult with an attorney of the Executive’s choosing, at Executive’s expense, and, through this Agreement, encourages the Executive to consult with an attorney with respect to any possible claims the Executive may have, including claims under the ADEA, as well as under the other federal, state and local laws described in Section 1 hereof. Executive understands that by signing this Agreement Executive is in fact waiving, releasing and forever giving up any claim under the ADEA, as well as all other federal, state and local laws described in Section 1 hereof that may have existed on or prior to the date hereof.
Section 5.    Waiting Period and Revocation Period. The Executive hereby acknowledges that the Company has informed the Executive that the Executive has up to “x” days to consider this Agreement and the Executive may knowingly and voluntarily waive that “x” day period by signing this Agreement earlier. Executive also understands that Executive shall have seven (7) days following the date on which Executive signs this Agreement within which to revoke it by providing a written notice of revocation to 

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the Company by hand delivering or mailing it to ______________, 300 Lindenwood Drive, Valleybrooke Corporate Center, Malvern, PA, 19355-1740, post-marked within the seven day period.
Section 6.    Acceptance. To accept this Agreement, the Executive shall execute and date this Agreement on the spaces provided and return a copy to the Company at any time during the “x” day period commencing on the date hereof, without extension of any kind (including by mutual agreement of the parties). This Agreement shall take effect on the eighth day following the Executive’s execution of this Agreement unless the Executive’s written revocation is delivered to the Company within seven (7) days after such execution.
Section 7.    Confidentiality. To the extent this Agreement and its terms are not otherwise subject to public disclosure, Executive will keep this Agreement and its terms (other than the fact that Executive was terminated on the Termination Date) confidential and will not disclose such information to anyone other than Executive’s immediate family and professional advisors, each of whom must, as a condition to the disclosure, agree to keep the information confidential. Executive will be responsible for any breach of this Section by Executive’s immediate family members and professional advisors. Notwithstanding the foregoing, this Agreement does not prohibit Executive from (a) providing truthful testimony in response to compulsory legal process, (b) participating or assisting in any investigation or inquiry by a governmental agency acting within the scope of its statutory or regulatory jurisdiction, or (c) making truthful statements in connection with any claim permitted to be brought by Executive under Section 1. In addition, nothing in this Agreement limits, restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.
Section 8.    No Disparagement. Executive has not from the date Executive was given this Agreement and will not in the future make any defamatory or disparaging statements to any third parties regarding the Company Entities, or any of their employees, officers, or board members, as well as the Company’s products, services and methods of operations. Notwithstanding the foregoing, this Agreement does not prohibit Executive from (a) providing truthful testimony in response to compulsory legal process, (b) participating or assisting in any investigation or inquiry by a governmental agency acting within the scope of its statutory or regulatory jurisdiction, or (c) making truthful statements in connection with any claim permitted to be brought by Executive under Section 1. In addition, nothing in this Agreement limits, restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to the governmental agency or entity.
Section 9.    No Admissions. Neither the execution of this Agreement nor the performance of its terms and conditions shall be construed or considered by any party or by any other person as an admission of liability or wrongdoing by either party.
Section 10.    Counterparts. This Agreement may be executed in one or more counterparts, each of which will be considered an original instrument and all of which together will be considered one and the same agreement and will become effective when all executed counterparts have been delivered to the respective parties.  Delivery of executed pages by facsimile transmission or e-mail will constitute binding execution of this Agreement.
Section 11.    Assignment. This Agreement shall be binding upon and shall inure to the benefit of the Company and its respective successors and assigns, and any such successors and assigns shall be 

3

considered third-party beneficiaries of this Agreement. Executive may not assign or transfer any payment obligations under this Agreement.
Section 12.    Severability. If any term, provision or paragraph of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable for any reason, such determination shall be limited to the narrowest possible scope in order to preserve the enforceability of the remaining portions of the term, provision or paragraph, and such determination shall not affect the remaining terms, provisions or paragraphs of this Agreement, which shall continue to be given full force and effect.
Section 13.    Further Assurances. Executive agrees to execute and deliver, after the date hereof, without additional consideration, any additional documents, and to take any further actions, as may be necessary to fulfill the intent of this Agreement and the transactions contemplated hereby.
Section 14.    Cooperation. Executive will (i) cooperate with the Company in all reasonable respects concerning any transitional matters which require Executive's assistance, cooperation or knowledge, including communicating with persons inside or outside the Company as directed by the Company, and (ii) in the event that the Company (or any of its affiliates or other related entities) becomes involved in any legal action relating to events which occurred during Executive's employment with the Company, cooperate to the fullest extent possible in the preparation, prosecution or defense of their case, including, but not limited to, the execution of affidavits or documents, testifying or providing information requested by the Company.  To the extent that Executive incurs (i) travel-related expenses, (ii) out-of-pocket expenses, and/or (iii) loss of wages as a result of Executive's cooperation with the Company as contemplated by this Section, the Company will reimburse Executive for such expenses, provided they are reasonable and were approved by the Company in advance.
Section 15.    Entire Agreement. This Agreement constitutes the complete and final agreement between the parties and supersedes and replaces all prior or contemporaneous agreements, negotiations, or discussions relating to the subject matter of this Agreement. All provisions and portions of this Agreement are severable.  If any provision or portion of this Agreement or the application of any provision or portion of this Agreement shall be determined to be invalid or unenforceable to any extent or for any reason, all other provisions and portions of this Agreement shall remain in full force and shall continue to be enforceable to the fullest and greatest extent permitted by law.
Section 16.    Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, and with the intention of being legally bound hereby, the Executive has executed this General Release and Waiver of Claims.

____________________________________        Date:____________________________                

4EX-4.10

 Exhibit 4.10 

DESCRIPTION OF SECURITIES 

Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Annual Report on
Form 10-K to which this Description of Securities is an exhibit. 
  

	 	A.	 Common Stock, $0.001 par value per share 

The authorized capital stock of Fidus Investment Corporation (the “Company,” “we,” “our” or “us”)
consists of 100,000,000 shares of common stock, par value $0.001 per share, of which 24,463,119 were outstanding as of December 31, 2019. Our common stock trades on the Nasdaq Global Select Market under the ticker symbol “FDUS.” There
are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plan. Under Maryland law, our stockholders generally are not personally liable for our debts or obligations. 

Under our charter, our board of directors is authorized to classify and reclassify any unissued shares of stock into other classes or series
of stock without obtaining stockholder approval. As permitted by the Maryland General Corporation Law, our charter provides that the board of directors, without any action by our stockholders, may amend the charter from time to time to increase or
decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. 

All shares of our common stock have equal rights as to earnings, assets, voting, and distributions and, when they are issued, will be duly
authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our board of directors and declared by us out of assets legally available therefor. Shares of our
common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. In the event of our liquidation, dissolution or winding up,
each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock,
if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or
series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our
directors, and holders of less than a majority of such shares will be unable to elect any director. 
 Provisions of the Maryland General Corporation Law
and our Charter and Bylaws 
 The Maryland General Corporation Law and our charter and bylaws contain provisions that could make it more
difficult for a potential acquiror to acquire us by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to
acquire control of us to negotiate first with our board of directors. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation
of such proposals may improve their terms. 
 Classified Board of Directors 

Our board of directors is divided into three classes of directors serving staggered three-year terms. The terms of the first, second and third
classes expire in 2021, 2019 and 2020, respectively, and in each case, those directors will serve until their successors are elected and qualify. Directors of each class will be elected to serve for three-year terms and until their successors are
duly elected and qualify and each year one class of directors will be elected by the stockholders. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer
time required to elect a majority of a classified board of directors will help to ensure the continuity and stability of our management and policies. 

 Election of Directors 

Our charter and bylaws provide that the affirmative vote of the holders of a plurality of the outstanding shares of stock entitled to vote in
the election of directors cast at a meeting of stockholders duly called and at which a quorum is present is required to elect a director. Pursuant to our bylaws our board of directors may amend the bylaws to alter the vote required to elect
directors. 
 Number of Directors; Vacancies; Removal 

Our charter provides that the number of directors will be set only by the board of directors in accordance with our bylaws. Our bylaws provide
that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than one nor more than eight. Except as may be provided
by the board of directors in setting the terms of any class or series of preferred stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the
remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies, subject to any
applicable requirements of the 1940 Act. 
 Our charter provides that a director may be removed only for cause, as defined in our charter,
and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors. 

Action by Stockholders 
 Under the
Maryland General Corporation Law, stockholder action can be taken only at an annual or special meeting of stockholders or (unless the charter provides for stockholder action by less than unanimous written consent, which our charter does not) by
unanimous written consent in lieu of a meeting. These provisions, combined with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying
consideration of a stockholder proposal until the next annual meeting. 
 Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

 Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of
directors and the proposal of business to be considered by stockholders may be made only (a) pursuant to our notice of the meeting, (b) by the board of directors or (c) by a stockholder who was a stockholder of record both at the time
of giving notice and at the time of the annual meeting and who is entitled to vote at the meeting and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in
our notice of the meeting may be brought before the meeting. Nominations of persons for election to the board of directors at a special meeting may be made only (a) pursuant to our notice of the meeting, (b) by the board of directors or
(c) provided that the board of directors has determined that directors will be elected at the meeting, by a stockholder who was a stockholder of record both at the time of giving notice and at the time of the annual meeting and who is entitled
to vote at the meeting and who has complied with the advance notice provisions of the bylaws. 
 The purpose of requiring stockholders to
give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent
deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our
bylaws do not give our board of directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of (a) precluding a contest for the election of directors
or the consideration of stockholder proposals if proper procedures are not followed and (b) discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal
without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders. 

 Calling of Special Meetings of Stockholders 

Our bylaws provide that special meetings of stockholders may be called by the chairman of our board of directors, our President and our board
of directors. Additionally, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called by the secretary of
the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting. 

Approval of Extraordinary Corporate Action; Amendment of Charter and Bylaws 

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets,
engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds of
the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our
charter provides that certain charter amendments, any proposal for our conversion, whether by charter amendment, merger or otherwise, from a closed-end company to
an open-end company and any proposal for our liquidation or dissolution requires the approval of the stockholders entitled to cast at least 80.0% of the votes entitled to be cast on such matter.
However, if such amendment or proposal is approved by a majority of our continuing directors (in addition to approval by our board of directors), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a
matter. The “continuing directors” are defined in our charter as (a) our current directors, (b) those directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by
a majority of our current directors then on the board of directors or (c) any successor directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of continuing
directors or the successor continuing directors then in office. 
 Our charter and bylaws provide that the board of directors has the
exclusive power to make, alter, amend or repeal any provision of our bylaws. 
 No Appraisal Rights 

Except with respect to appraisal rights arising in connection with the Control Share Act discussed below, as permitted by the Maryland General
Corporation Law, our charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of the board of directors shall determine such rights apply. 

Control Share Acquisitions 
 The Maryland
General Corporation Law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of
the votes entitled to be cast on the matter (the “Control Share Act”). Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares
are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would
entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power: 
  

	 	•	 	 one-tenth or more but less than one-third;

  

	 	•	 	 one-third or more but less than a majority; or 

 

	 	•	 	 a majority or more of all voting power. 

The requisite stockholder approval must be obtained each time an acquiror crosses one of the thresholds of voting power set forth above.
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions.

 A person who has made or proposes to make a control share acquisition may compel the board
of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain
conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. 

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the
statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and
limitations, including, as provided in our bylaws compliance with the 1940 Act. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or
of any meeting of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares
entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share
acquisition. 
 The Control Share Act does not apply (a) to shares acquired in a merger, consolidation or share exchange if the
corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Control Share Act any and all acquisitions by any person of our
shares of stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future. However, we will amend our bylaws to be subject to the Control Share Act only if the board of directors determines that it
would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the 1940 Act. 

Business Combinations 
 Under Maryland
law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an
interested stockholder (the “Business Combination Act”). These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity
securities. An interested stockholder is defined as: 
  

	 	•	 	 any person who beneficially owns 10.0% or more of the voting power of the corporation’s outstanding voting
stock; or 

  

	 	•	 	 an affiliate or associate of the corporation who, at any time within
the two-year period prior to the date in question, was the beneficial owner of 10.0% or more of the voting power of the then outstanding voting stock of the corporation. 

A person is not an interested stockholder under this statute if the board of directors approved in advance the transaction by which the
stockholder otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions
determined by the board. 
 After the five-year prohibition, any business combination between the Maryland corporation and an interested
stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: 
  

	 	•	 	 80.0% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

  

	 	•	 	 two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. 

 These super-majority vote requirements do not apply if the corporation’s common
stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. 

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before
the time that the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution, subject to the provisions of the 1940 Act, that any business combination between us and any other person is exempted from
the provisions of the Business Combination Act, provided that the business combination is first approved by the board of directors, including a majority of the directors who are not interested persons as defined in the 1940 Act. This resolution may
be altered or repealed in whole or in part at any time; however, our board of directors will adopt resolutions so as to make us subject to the provisions of the Business Combination Act only if the board of directors determines that it would be in
our best interests and if the SEC staff does not object to our determination that our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the board of directors does not otherwise
approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. 

Conflict with 1940 Act 
 Our bylaws
provide that, if and to the extent that any provision of the Maryland General Corporation Law, including the Control Share Act (if we amend our bylaws to be subject to such Act) and the Business Combination Act, or any provision of our charter or
bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control. 
 B. Debt Securities

  

	 	•	 	 5.875% Notes due 2023 (the “2023 Notes”); 

 

	 	•	 	 6.000% Notes due 2024 (the “February 2024 Notes”); and 

 

	 	•	 	 5.375% Notes due 2024 (the “November 2024 Notes,” and together with the 2023 Notes and the February
2024 Notes, the “Note,” and collectively, the “Notes”). 

 The 2023 Notes 

In January 2018, we issued $43,478,275 in aggregate principal amount of the 2023 Notes. On February 22, 2018, the underwriters exercised
their option to purchase an additional $6.5 million in aggregate principal of the 2023 Notes. The total net proceeds to us from the 2023 Notes, including the exercise of the underwriters’ option, after deducting underwriting discounts of
approximately $1.5 million and estimated offering expenses of $0.4 million, were approximately $48.1 million. 
 The 2023
Notes were issued under a base indenture (the “Base Indenture”), dated April 29, 2016, by and between the Company and U.S. Bank National Association (“Trustee”), as supplemented by the first supplemental indenture dated
February 2, 2018 (the “First Supplemental Indenture”). The 2023 Notes will mature on February 1, 2023 and bear interest at a rate of 5.875% per year. The 2023 Notes may be redeemed in whole or in part at any time or from time to
time at our option on or after February 1, 2020. Interest on the 2023 Notes is payable quarterly on February 1, May 1, August 1 and November 1 of each year, beginning May 1, 2018. The 2023 Notes are listed on the NASDAQ
Global Select Market under the trading symbol “FDUSL.” As of December 31, 2019, the outstanding principal balance of the 2023 Notes was $50.0 million. 

The February 2024 Notes 
 In February
2019, we issued $60,000,000 in aggregate principal amount of the February 2024 Notes. On February 19, 2019, the underwriters exercised their option to purchase an additional $9.0 million in aggregate principal of the February 2024 Notes.
The total net proceeds to us from the February 2024 Notes, including the exercise of the underwriters’ option, after deducting underwriting discounts of approximately $2.1 million and estimated offering expenses of $0.4 million, were
approximately $66.5 million. 

 The February 2024 Notes were issued under the Base Indenture, as supplemented by the second
supplemental indenture dated February 5, 2019 (the “Second Supplemental Indenture”). The February 2024 Notes will mature on February 15, 2024 and bear interest at a rate of 6.000%. The February 2024 Notes may be redeemed in whole
or in part at any time or from time to time at our option on or after February 15, 2021. Interest on the February 2024 Notes is payable quarterly on February 15, May 15, August 15 and November 15 of each year, beginning
May 15, 2019. The February 2024 Notes are listed on the NASDAQ Global Select Market under the trading symbol “FDUSZ.” As of December 31, 2019, the outstanding principal balance of the February 2024 Notes was $69.0 million.

 The November 2024 Notes 
 In October
2019, we issued $55,000,000 in aggregate principal amount of the November 2024 Notes. On October 23, 2019, the underwriters exercised their option to purchase an additional $8.3 million in aggregate principal of the November 2024 Notes.
The total net proceeds to us from the November 2024 Notes, including the exercise of the underwriters’ option, after deducting underwriting discounts of approximately $1.9 million and estimated offering expenses of $0.3 million, were
approximately $61.1 million. 
 The November 2024 Notes were issued under the Base Indenture, as supplemented by the third supplemental
indenture dated October 16, 2019 (the “Third Supplemental Indenture,” and together with the First Supplemental Indenture and the Second Supplemental Indenture, the “Indenture”). The November 2024 Notes will mature on
November 1, 2024 and bear interest at a rate of 5.375%. The November 2024 Notes may be redeemed in whole or in part at any time or from time to time at our option on or after November 1, 2021. Interest on the November 2024 Notes is payable
quarterly on February 1, May 1, August 1 and November 1 of each year, beginning February 1, 2020. The November 2024 Notes are listed on the NASDAQ Global Select Market under the trading symbol “FDUSG.” As of
December 31, 2019, the outstanding principal balance of the November 2024 Notes was approximately $63.3 million. 
 General 

For purposes of this description, any reference to the payment of principal of, or premium or interest, if any, on, the 2023 Notes, the
February 2024 Notes and the November 2024 Notes will include additional amounts if required by the terms of such Notes. 
 As required by
federal law for all bonds and notes of companies that are publicly offered, the debt securities are governed by a document called an “indenture.” An indenture is a contract between us and the financial institution acting as trustee on your
behalf, and is subject to and governed by the Trust Indenture Act of 1939, as amended. The Trustee has two main roles. First, the Trustee can enforce your rights against us if we default. There are some limitations on the extent to which the Trustee
acts on your behalf, see “Events of Default” for more information. Second, the Trustee performs certain administrative duties for us with respect to our debt securities. 

The Indenture provides that any debt securities may be issued under the Indenture in one or more series. The Indenture does not limit the
amount of debt securities that may be issued thereunder from time to time. Debt securities issued under the Indenture, when a single trustee is acting for all debt securities issued under the Indenture, are called the “indenture
securities.” The Indenture also provides that there may be more than one trustee thereunder, each with respect to one or more different series of indenture securities. See “Resignation of Trustee” below for more information. At a time
when two or more trustees are acting under the Indenture, each with respect to only certain series, the term “indenture securities” means the one or more series of debt securities with respect to which each respective trustee is acting. In
the event that there is more than one trustee under the Indenture, the powers and trust obligations of each trustee will extend only to the one or more series of indenture securities for which it is trustee. If two or more trustees are acting under
the Indenture, then the indenture securities for which each trustee is acting would be treated as if issued under separate indentures. 

Except as described under “Events of Default” and “Merger or Consolidation” below, the Indenture does not contain any
provisions that give you protection in the event we issue a large amount of debt or we are acquired by another entity. 

 We have the ability to issue indenture securities with terms different from those of
indenture securities previously issued and, without the consent of the holders thereof, to reopen a previous issue of a series of indenture securities and issue additional indenture securities of that series unless the reopening was restricted when
that series was created. 
 Optional Redemption 

The 2023 Notes, the February 2024 Notes and the November 2024 Notes may be redeemed in whole or in part at any time or from time to time at our
option on or after February 1, 2020, February 15, 2021 and November 1, 2021, respectively, upon not less than 30 days nor more than 60 days written notice by mail prior to the date fixed for redemption thereof, at a redemption
price of 100% of the outstanding principal amount of the Note plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption. 

You may be prevented from exchanging or transferring the Notes when they are subject to redemption. In case any Notes are to be redeemed in
part only, the redemption notice will provide that, upon surrender of such Note, you will receive, without a charge, a new Note or Notes of authorized denominations representing the principal amount of your remaining unredeemed Notes. Any exercise
of our option to redeem the Notes will be done in compliance with the 1940 Act, to the extent applicable. 
 If we redeem only some of the
Notes, the Trustee or the Depositary Trust Company (“DTC”), as applicable, will determine the method for selection of the particular Notes to be redeemed, in accordance with the Indenture governing the Notes and in accordance with the
rules of any national securities exchange or quotation system on which the Notes are listed. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes called for redemption.

 Ranking of the Notes 
 The Notes are
the Company’s direct unsecured obligations and will rank: 
  

	 	•	 	 pari passu with our other outstanding and future unsecured unsubordinated indebtedness;

  

	 	•	 	 senior to any of our future indebtedness that expressly provides it is subordinated to the Notes;

  

	 	•	 	 effectively subordinated to all of our existing and future secured indebtedness (including indebtedness that is
initially unsecured in respect of which we subsequently grant a security interest), to the extent of the value of the assets securing such indebtedness; and 

  

	 	•	 	 structurally subordinated to all existing and future indebtedness and other obligations of any of our
subsidiaries, including the Funds. 

 Denominations 

The Notes are issued in denominations of $25 and integral multiples of $25 in excess thereof. 

Sinking Fund 
 The Notes will not be
subject to any sinking fund. 
 Book-Entry Holders 

The Notes were issued as registered securities in book-entry form only. We will issue registered debt securities in book-entry form only,
unless we specify otherwise in the applicable prospectus supplement. This means debt securities will be represented by one or more global securities registered in the name of a depositary that will hold them on behalf of financial institutions that
participate in the depositary’s book-entry system. These participating institutions, in turn, hold beneficial interests in the debt securities held by the depositary or its nominee. These institutions may hold these interests on behalf of
themselves or customers. 

 Under the Indenture, only the person in whose name a debt security is registered is
recognized as the holder of that debt security. Consequently, for debt securities issued in book-entry form, we will recognize only the depositary as the holder of the debt securities and we will make all payments on the debt securities to the
depositary. The depositary will then pass along the payments it receives to its participants, which in turn will pass the payments along to their customers who are the beneficial owners. The depositary and its participants do so under agreements
they have made with one another or with their customers; they are not obligated to do so under the terms of the debt securities. 
 As a
result, investors will not own debt securities directly. Instead, they will own beneficial interests in a global security, through a bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an
interest through a participant. As long as the debt securities are represented by one or more global securities, investors will be indirect holders, and not holders, of the debt securities. 

Global Securities 
 As noted above, the
Notes are issued in book-entry form and represented by a global security that we deposit with and register in the name of DTC or its nominee. A global security may not be transferred to or registered in the name of anyone other than the depositary
or its nominee, unless special termination situations arise. As a result of these arrangements, the depositary, or its nominee, will be the sole registered owner and holder of all the Notes represented by a global security, and investors will be
permitted to own only beneficial interests in a global security. 
 Termination of a Global Security 

If a global security is terminated for any reason, interests in it will be exchanged for certificates
in non-book-entry form (certificated securities). After that exchange, the choice of whether to hold the certificated Notes directly or in street name will be up to the investor. Investors must
consult their own banks or brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they will be holders. 

Conversion and Exchange 
 The Notes are
not convertible into or exchangeable for other securities. 
 Payment and Paying Agents 

We will pay interest to the person listed in the Trustee’s records as the owner of the Notes at the close of business on a particular day
in advance of each due date for interest, even if that person no longer owns the Note on the interest due date. That day, usually about two weeks in advance of the interest due date, is called the “record date.” Because we will pay all the
interest for an interest period to the holders on the record date, holders buying and selling the Notes must work out between themselves the appropriate purchase price. The most common manner is to adjust the sales price of the Notes to prorate
interest fairly between buyer and seller based on their respective ownership periods within the particular interest period. This prorated interest amount is called “accrued interest.” 

Payments on Global Securities 
 We will
make payments on the Notes so long as they are represented by a global security in accordance with the applicable policies of the depositary as in effect from time to time. Under those policies, we will make payments directly to the depositary, or
its nominee, and not to any indirect holders who own beneficial interests in the global security. An indirect holder’s right to those payments will be governed by the rules and practices of the depositary and its participants. 

Payment When Offices Are Closed 
 If any
payment is due on the Notes on a day that is not a business day, we will make the payment on the next day that is a business day. Payments made on the next business day in this situation will be treated under the Indenture as if they were made on
the original due date. Such payment will not result in a default under the Notes or the Indenture, and no interest will accrue on the payment amount from the original due date to the next day that is a business day. 

 Events of Default 

You will have rights if an Event of Default occurs in respect of the Notes and the Event of Default is not cured, as described later in this
subsection. 
 The term “Event of Default” in respect of the Notes means any of the following: 

 

	 	•	 	 We do not pay the principal of, or any premium on, any Note when due and payable at maturity;

  

	 	•	 	 We do not pay interest on any Note when due and payable, and such default is not cured within 30 days of its due
date; 

  

	 	•	 	 We remain in breach of any other covenant in respect of the Notes for 60 days after we receive a written notice
of default stating we are in breach (the notice must be sent by either the Trustee or holders of at least 25% of the principal amount of the outstanding Notes); 

 

	 	•	 	 We file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization occur and remain
undischarged or unstayed for a period of 60 days; or 

  

	 	•	 	 On the last business day of each of twenty-four consecutive calendar months, the Notes have an asset coverage of
less than 100%, giving effect to the exemptive relief granted to us by the SEC with respect to the consolidation of debt of the Funds. 

An Event of Default for the Notes may, but does not necessarily, constitute an Event of Default for any other series of debt securities issued
under the same or any other indenture. The Trustee may withhold notice to the holders of the Notes of any default, except in the payment of principal or interest, if it in good faith considers the withholding of notice to be in the best interests of
the holders. 
 Remedies if an Event of Default Occurs 

If an Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in principal amount of the Notes may
declare the entire principal amount of all the Notes to be due and immediately payable, but this does not entitle any holder of Notes to any redemption payout or redemption premium. This is called a declaration of acceleration of maturity. In
certain circumstances, a declaration of acceleration of maturity may be canceled by the holders of a majority in principal amount of the Notes if (1) we have deposited with the Trustee all amounts due and owing with respect to the Notes (other
than principal or any payment that has become due solely by reason of such acceleration) and certain other amounts, and (2) any other Events of Default have been cured or waived. 

Except in cases of default, where the Trustee has some special duties, the Trustee is not required to take any action under the Indenture at
the request of any holders unless the holders offer the Trustee protection from expenses and liability reasonably satisfactory to it (called an “indemnity”). If indemnity reasonably satisfactory to the Trustee is provided, the holders of a
majority in principal amount of the Notes may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the Trustee. The Trustee may refuse to follow those directions in certain
circumstances. No delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or Event of Default. 

Before you are allowed to bypass the Trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your
rights or protect your interests relating to the Notes, the following must occur: 
  

	 	•	 	 You must give the Trustee written notice that an Event of Default has occurred and remains uncured;

  

	 	•	 	 The holders of at least 25% in principal amount of all the Notes must make a written request that the Trustee
take action because of the default and must offer the Trustee indemnity, security, or both reasonably satisfactory to it against the cost and other liabilities of taking that action; 

 

	 	•	 	 The Trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity
and/or security; and 

	 	•	 	 The holders of a majority in principal amount of the Notes must not have given the Trustee a direction
inconsistent with the above notice during that 60-day period. 

However, you are entitled at any time to bring a lawsuit for the payment of money due on your Notes on or after the due date. 

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a
request of the Trustee and how to declare or cancel an acceleration of maturity. 
 Each year, we will furnish to the Trustee a written
statement of certain of our officers certifying that to their knowledge we are in compliance with the Indenture and the Notes, or else specifying any default. 

Waiver of Default 
 The
holders of a majority in principal amount of the Notes may waive any past defaults other than a default: 
  

	 	•	 	 in the payment of principal (or premium, if any) or interest; or 

 

	 	•	 	 in respect of a covenant that cannot be modified or amended without the consent of each holder of the Notes.

 Merger or Consolidation 

Under the terms of the Indenture, we are generally permitted to consolidate or merge with another entity. We are also permitted to sell all or
substantially all of our assets to another entity. However, we may not take any of these actions unless all the following conditions are met: 
  

	 	•	 	 where we merge out of existence or convey or transfer our assets substantially as an entirety, the resulting
entity must agree to be legally responsible for our obligations under the Notes; 

  

	 	•	 	 the merger or sale of assets must not cause a default on the Notes and we must not already be in default (unless
the merger or sale would cure the default). For purposes of this no-default test, a default would include an Event of Default that has occurred and has not been cured, as described under “Events
of Default” above. A default for this purpose would also include any event that would be an Event of Default if the requirements for giving us a notice of default or our default having to exist for a specific period of time were disregarded;
and 

  

	 	•	 	 we must deliver certain certificates and documents to the Trustee. 

Modification or Waiver 
 There are three
types of changes we can make to the Indenture and the Notes issued thereunder. 
 Changes Requiring Your Approval 

First, there are changes that we cannot make to your Notes without your specific approval. The following is a list of those types of changes:

  

	 	•	 	 change the stated maturity of the principal of (or premium, if any, on) or any installment of principal of or
interest on the Notes; 

  

	 	•	 	 reduce any amounts due on the Notes or reduce the rate of interest on the Notes; 

 

	 	•	 	 reduce the amount of principal payable upon acceleration of the maturity of a Note following a default;

  

	 	•	 	 change the place or currency of payment on a Note; 

 

	 	•	 	 impair your right to sue for payment; 

	 	•	 	 reduce the percentage of holders of Notes whose consent is needed to modify or amend the Indenture; and

  

	 	•	 	 reduce the percentage of holders of Notes whose consent is needed to waive compliance with certain provisions of
the Indenture or to waive certain defaults or reduce the percentage of holders of Notes required to satisfy quorum or voting requirements at a meeting of holders of the Notes. 

Changes Not Requiring Approval 

The second type of change does not require any vote by the holders of the Notes. This type is limited to clarifications and certain other
changes that would not adversely affect holders of the Notes in any material respect. 
 Changes Requiring Majority Approval 

Any other change to the Indenture and the Notes would require the following approval: 

 

	 	•	 	 if the change affects only the Notes, it must be approved by the holders of a majority in principal amount of the
Notes; and 

  

	 	•	 	 if the change affects more than one series of debt securities issued under the same indenture, it must be
approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose. 

In each case, the required approval must be given by written consent. 

The holders of a majority in principal amount of all of the series of debt securities issued under an indenture, voting together as one class
for this purpose, may waive our compliance with some of our covenants in that indenture. However, we cannot obtain a waiver of a payment default or of any of the matters covered by the bullet points included above under “Changes Requiring Your
Approval.” 
 Further Details Concerning Voting 

When taking a vote, we will use the following rules to decide how much principal to attribute to the Notes: 

The Notes will not be considered outstanding, and therefore not eligible to vote, if we have deposited or set aside in trust money for their
payment or redemption or if we or any affiliate of ours own any Notes. The Notes will also not be eligible to vote if they have been fully defeased as described later under “Defeasance—Full Defeasance” below. 

We will generally be entitled to set any day as a record date for the purpose of determining the holders of the Notes that are entitled to
vote or take other action under the Indenture. However, the record date may not be earlier than 30 days before the date of the first solicitation of holders to vote on or take such action and not later than the date such solicitation is completed.
If we set a record date for a vote or other action to be taken by holders of the Notes, that vote or action may be taken only by persons who are holders of the Notes on the record date and must be taken within eleven months following the record
date. 
 Defeasance 
 The following provisions will be
applicable to the Notes.
 Covenant Defeasance 

Under current U.S. federal income tax law and the Indenture, we can make the deposit described below and be released from some of the
restrictive covenants in the Indenture under which the Notes were issued. This is called “covenant defeasance.” In that event, you would lose the protection of those restrictive covenants but would gain the protection of having money and
government securities set aside in trust to repay your Notes. In order to achieve covenant defeasance, the following must occur: 
  

	 	•	 	 Since the Notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the
Notes a combination of cash and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the Notes on their various due dates; 

	 	•	 	 We must deliver to the Trustee a legal opinion of our counsel confirming that, under current U.S. federal income
tax law, we may make the above deposit without causing you to be taxed on the Notes any differently than if we did not make the deposit; 

  

	 	•	 	 We must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require
registration by us under the 1940 Act, and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with; 

 

	 	•	 	 Defeasance must not result in a breach or violation of, or result in a default under, the Indenture or any of our
other material agreements or instruments; and 

  

	 	•	 	 No default or Event of Default with respect to the Notes shall have occurred and be continuing and no defaults or
events of default related to bankruptcy, insolvency or reorganization shall occur during the next 60 days. 

 If we
accomplish covenant defeasance, you can still look to us for repayment of the Notes if there were a shortfall in the trust deposit or the Trustee is prevented from making payment. In fact, if one of the remaining Events of Default occurred (such as
our bankruptcy) and the Notes became immediately due and payable, there might be a shortfall. Depending on the event causing the default, you may not be able to obtain payment of the shortfall. 

Full Defeasance 
 If there
is a change in U.S. federal income tax law, as described below, we can legally release ourselves from all payment and other obligations on the Notes (called “full defeasance”) if we put in place the following other arrangements for you to
be repaid: 
  

	 	•	 	 Since the Notes are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of the
Notes a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the Notes on their various due dates; 

 

	 	•	 	 We must deliver to the Trustee a legal opinion confirming that there has been a change in current U.S. federal
tax law or an Internal Revenue Service (“IRS”) ruling that allows us to make the above deposit without causing you to be taxed on the Notes any differently than if we did not make the deposit; 

 

	 	•	 	 We must deliver to the Trustee a legal opinion of our counsel stating that the above deposit does not require
registration by us under the 1940 Act, and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with; 

 

	 	•	 	 Defeasance must not result in a breach or violation of, or constitute a default under, the Indenture or any of
our other material agreements or instruments; and 

  

	 	•	 	 No default or Event of Default with respect to the Notes shall have occurred and be continuing and no defaults or
events of default related to bankruptcy, insolvency or reorganization shall occur during the next 60 days. 

 If we ever
did accomplish full defeasance, as described above, you would have to rely solely on the trust deposit for repayment of the Notes. You could not look to us for repayment in the unlikely event of any shortfall. Conversely, the trust deposit would
most likely be protected from claims of our lenders and other creditors if we ever became bankrupt or insolvent. 
 Resignation of Trustee 

The Trustee may resign or be removed with respect to the Notes provided that a successor trustee is appointed to act with respect to the Notes.
In the event that two or more persons are acting as trustee with respect to different series of indenture securities under the Indenture, each of the trustees will be a trustee of a trust separate and apart from the trust administered by any other
trustee. 

 Governing Law 

The Indenture and the Notes will be governed by and construed in accordance with the laws of the State of New York. 

Indenture Provisions — Subordination 

Upon any distribution of our assets upon our dissolution, winding up, liquidation or reorganization, the payment of the principal of (and
premium, if any) and interest, if any, on any indenture securities denominated as subordinated debt securities is to be subordinated to the extent provided in the Indenture in right of payment to the prior payment in full of all Senior Indebtedness
(as defined below), but our obligation to you to make payment of the principal of (and premium, if any) and interest, if any, on such subordinated debt securities will not otherwise be affected. In addition, no payment on account of principal (or
premium, if any), sinking fund or interest, if any, may be made on such subordinated debt securities at any time unless full payment of all amounts due in respect of the principal (and premium, if any), sinking fund and interest on Senior
Indebtedness has been made or duly provided for in money or money’s worth. 
 In the event that, notwithstanding the foregoing, any
payment by us is received by the Trustee in respect of subordinated debt securities or by the holders of any of such subordinated debt securities, upon our dissolution, winding up, liquidation or reorganization before all Senior Indebtedness is paid
in full, the payment or distribution received by the Trustee in respect of such subordinated debt securities or by the holders of any of such subordinated debt securities must be paid over to the holders of the Senior Indebtedness or on their behalf
for application to the payment of all the Senior Indebtedness remaining unpaid until all the Senior Indebtedness has been paid in full, after giving effect to any concurrent payment or distribution to the holders of the Senior Indebtedness. Subject
to the payment in full of all Senior Indebtedness upon this distribution by us, the holders of such subordinated debt securities will be subrogated to the rights of the holders of the Senior Indebtedness to the extent of payments made to the holders
of the Senior Indebtedness out of the distributive share of such subordinated debt securities. 
 By reason of this subordination, in the
event of a distribution of our assets upon our insolvency, certain of our senior creditors may recover more, ratably, than holders of any subordinated debt securities or the holders of any indenture securities that are not Senior Indebtedness. The
Indenture provides that these subordination provisions will not apply to money and securities held in trust under the defeasance provisions of the Indenture. 

Senior Indebtedness is defined in the Indenture as the principal of (and premium, if any) and unpaid interest on: 

 

	 	•	 	 our indebtedness (including indebtedness of others guaranteed by us), whenever created, incurred, assumed or
guaranteed, for money borrowed, that we have designated as “Senior Indebtedness” for purposes of the Indenture and in accordance with the terms of the Indenture (including any indenture securities designated as Senior Indebtedness), and

  

	 	•	 	 renewals, extensions, modifications and refinancings of any of this indebtedness. 

The Trustee under the Indenture 
 U.S Bank
National Association serves as the Trustee, paying agent, and security registrar under the Indenture. Separately, our securities are held by U.S. Bank National Association pursuant to a custody agreement.

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