NewStar Financial, Inc. (NASDAQ:NEWS) Files An 8-K Entry into a Material Definitive Agreement

Item1.01 Entry into a Material Definitive Agreement.

On December1, 2016, NewStar Financial, Inc. (NewStar or the
Company) announced the completion of the sale of its equipment
finance business, NewStar Equipment Finance (NEF), to Radius Bank
(the Purchaser). The sale was made to an Asset Purchase Agreement
dated as of December1, 2016 (the Purchase Agreement) by and among
NewStar Equipment Finance I, LLC, NewStar Commercial Lease
Funding I, LLC, NewStar Commercial Lease Funding 2015-1 LLC, the
Purchaser and, for the limited purposes specified in the
agreement, the Company. The sale of NEFs business platform and
related assets represents a continuation of the Companys
transformation from a bank->

The Purchase Agreement contains customary representations,
warranties and covenants by the parties. The Company and the
Purchaser are obligated, subject to certain limitations, to
indemnify the other for certain customary and specified matters,
including breaches of representations and warranties,
nonfulfillment or breaches of covenants and for certain third
party claims. In addition, for a period of approximately four
years following the closing date, the Company has indemnified the
Purchaser against losses arising from certain charge-offs
relating to the loans and leases sold to the Purchaser at the
closing date, subject to a cap that reduces over time and subject
to the Companys right to repurchase the defaulted loan or lease
instead.

Prior to the sale, NewStar Commercial Lease Funding I, LLC and
NewStar Equipment Finance I, LLC, both of which are subsidiaries
of NewStar, repaid approximately $17.0 million, representing the
outstanding balance, together with accrued and unpaid interest,
under their note purchase agreement dated November16, 2012, as
subsequently amended, through which Wells Fargo Bank had provided
a revolving credit facility to fund equipment leases and loans.
In addition, on October17, 2016, NewStar Commercial Lease Funding
2015-1 LLC, also a subsidiary of NewStar, redeemed the remaining
amounts outstanding under its September 2015 static asset-backed
securitization, in an amount of approximately $9.7 million,
representing the balance of the ClassA notes held by third party
investors.

The foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Purchase Agreement which has
been filed with this Current Report on Form 8-K as Exhibit 10.1.
The Purchase Agreement has been attached to provide investors
with information regarding its terms. It is not intended to
provide any other factual information about the Company, NEF or
the Purchaser. In particular, the assertions embodied in the
representations and warranties contained in the Purchase
Agreement are qualified by information in confidential disclosure
schedules provided by the Company to the Purchaser in connection
with the signing of the Purchase Agreement. These disclosure
schedules contain information that modifies, qualifies and
creates exceptions to the representations and warranties set
forth in the Purchase Agreement. Moreover, certain
representations and warranties in the Purchase Agreement were
used for the purpose of allocating risk between the Company and
the Purchaser, rather than establishing matters of fact.
Accordingly, the representations and warranties in the Purchase
Agreement may not constitute the actual state of facts about the
Company, NEF, or the Purchaser. Investors should not rely on the
representations, warranties and covenants or any description
thereof as characterizations of the actual state of facts or
condition of the Company, NEF or the Purchaser. Moreover,
information concerning the subject matter of the representations,
warranties and covenants may change after the date of the
Purchase Agreement, which subsequent information may or may not
be fully reflected in public disclosures.

Item8.01 Other Events.

The Company issued a press release announcing the sale of its
equipment finance business to the Purchase Agreement. The full
text of the press release issued in connection with the
announcement is attached as Exhibit 99.1 to this Current Report
on Form 8-K.

Item9.01 Financial Statements and Exhibits.

(d) Exhibits.

Forward-Looking Statements

Some of the statements in this Current Report on Form 8-K may
contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, regarding
future events and the future results of the Company, including
the expected gain on sale of NEF that may be recognized, that are
based on current expectations, estimates, forecasts and
projections about the Company. Words such as anticipates,
believes, estimates, expects, intends, plans, projects, may,
will, should and other similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements are predictions of future events or trends and are not
statements of historical matters. These statements are based on
current expectations and beliefs of the Company and involve a
number of risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual results may differ materially and
adversely from those expressed in any forward-looking statements.
Additional information about the economic, competitive,
regulatory and other factors that may affect NewStars operations
is set forth in Item1A, Risk Factors in its Annual Report on Form
10-K for the year ended December31, 2015.

About NewStar Financial, Inc. (NASDAQ:NEWS)

NewStar Financial, Inc. (NewStar) is a commercial finance company with specialized lending platforms focused on meeting the financing needs of companies and private investors in the middle market. The Company and its wholly owned investment management subsidiary, NewStar Capital LLC, are registered investment advisors and provide asset management services to institutional investors. The Company manages various private credit funds that co-invest in loan origination through its leveraged finance lending platform. Through its wholly owned subsidiary, the Company also manages a series of funds structured as collateralized loan obligations (CLOs) that invest primarily in broadly syndicated loans, as well as other sponsored funds and managed accounts that invest across various asset classes, including broadly syndicated loans, high yield bonds and distressed credits. The Company’s loan portfolio includes loans, leases and other debt products.

NewStar Financial, Inc. (NASDAQ:NEWS) Recent Trading Information

NewStar Financial, Inc. (NASDAQ:NEWS) closed its last trading session down -0.11 at 8.36 with 119,843 shares trading hands.