Document:

Exhibit

Exhibit 10.18

EXECUTION VERSION

LIMITED LIABILITY COMPANY AGREEMENT
OF
NMFC SENIOR LOAN PROGRAM II LLC

    

TABLE OF CONTENTS
	
				
	ARTICLE 1
	DEFINITIONS
	1
	

	 
	 
	 

	ARTICLE 2
	GENERAL PROVISIONS
	6
	

	 
	 
	 

	Section 2.1
	Formation of the Limited Liability Company
	6
	

	Section 2.2
	Company Name
	6
	

	Section 2.3
	Place of Business; Agent for Service of Process
	6
	

	Section 2.4
	Principal Purpose and Powers of the Company
	7
	

	Section 2.5
	Fiscal Year
	8
	

	Section 2.6
	Liability of Members
	8
	

	Section 2.7
	Member List
	8
	

	Section 2.8
	Member Representations and Warranties
	8
	

	Section 2.9
	Separate Legal Entity
	9
	

	 
	 
	 

	ARTICLE 3
	COMPANY CAPITAL AND INTERESTS
	11
	

	 
	 
	 

	Section 3.1
	Capital Commitments; Capital Contributions
	11
	

	Section 3.2
	Temporary Advances
	12
	

	Section 3.3
	Defaulting Members
	13
	

	Section 3.4
	Interest or Withdrawals
	14
	

	 
	 
	 

	ARTICLE 4
	ALLOCATIONS
	14
	

	 
	 
	 

	Section 4.1
	Capital Accounts
	14
	

	Section 4.2
	General Allocations
	14
	

	Section 4.3
	Changes of Interests
	15
	

	Section 4.4
	Income Taxes and Tax Capital Accounts
	15
	

	 
	 
	 

	ARTICLE 5
	DISTRIBUTIONS
	16
	

	 
	 
	 

	Section 5.1
	General
	16
	

	Section 5.2
	Withholding
	16
	

	Section 5.3
	Reserves; Certain Limitations; Distributions in Kind
	17
	

	 
	 
	 

	ARTICLE 6
	MANAGEMENT OF COMPANY
	18
	

	 
	 
	 

	Section 6.1
	Management Generally; Approval of Administrative
	 

	 
	Services Agreement
	18
	

	Section 6.2
	Composition of the Board
	18
	

	Section 6.3
	Meetings of the Board
	19
	

	Section 6.4
	Quorum; Acts of the Board
	19
	

	Section 6.5
	Participation in Meetings by Electronic Communications
	20
	

	Section 6.6
	Compensation of Board Members; Expenses
	20
	

	Section 6.7
	Removal of Board Members
	20
	

	Section 6.8
	Board as Agent
	21
	

	Section 6.9
	Officers
	21
	

	Section 6.10
	Officers as Agents
	21
	

i
        

        

	
				
	Section 6.11
	Duties of Board, Board Members and Officers;
	 

	 
	Disclaimer of Duties
	21
	

	Section 6.12
	Reliance by Third Parties
	22
	

	Section 6.13
	Allocation of Investment Opportunities
	22
	

	Section 6.14
	Indemnification; Exculpation
	22
	

	Section 6.15
	Tax Matters Member
	25
	

	 
	 
	 

	ARTICLE 7
	TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS
	25
	

	 
	 
	 

	Section 7.1
	Transfers by Members
	25
	

	Section 7.2
	Withdrawal by Members
	27
	

	 
	 
	 

	ARTICLE 8
	TERM, DISSOLUTION AND LIQUIDATION OF COMPANY
	27
	

	 
	 
	 

	Section 8.1
	Term
	27
	

	Section 8.2
	Dissolution
	27
	

	Section 8.3
	Wind-Up
	28
	

	 
	 
	 

	ARTICLE 9
	ACCOUNTING, REPORTING AND VALUATION
	 

	 
	PROVISIONS
	30
	

	 
	 
	 

	Section 9.1
	Books and Accounts
	30
	

	Section 9.2
	Financial Reports; Tax Return
	31
	

	Section 9.3
	Confidentiality
	32
	

	Section 9.4
	Valuation
	34
	

	 
	 
	 

	ARTICLE 10
	MISCELLANEOUS PROVISIONS
	35
	

	 
	 
	 

	Section 10.1
	Power of Attorney
	35
	

	Section 10.2
	Determination of Disputes
	36
	

	Section 10.3
	Certificate of Formation; Other Documents
	36
	

	Section 10.4
	Force Majeure
	36
	

	Section 10.5
	Notice of Litigation or Regulatory Proceedings
	36
	

	Section 10.6
	Applicable Law
	37
	

	Section 10.7
	Waivers
	37
	

	Section 10.8
	Notices
	37
	

	Section 10.9
	Construction
	37
	

	Section 10.10
	Amendments
	38
	

	Section 10.11
	Legal Counsel
	39
	

	Section 10.12
	Execution
	39
	

	Section 10.13
	Binding Effect
	39
	

	Section 10.14
	Severability
	39
	

	Section 10.15
	Computation of Time
	39
	

	Section 10.16
	Entire Agreement
	40
	

ii

    

LIMITED LIABILITY COMPANY AGREEMENT
OF
NMFC SENIOR LOAN PROGRAM II LLC
This Limited Liability Company Agreement of NMFC Senior Loan Program II LLC (the “Company”), dated as of March 9, 2016, is entered into by and between SkyKnight Income, LLC, a Delaware limited liability company, and New Mountain Finance Corporation, a Delaware corporation, as the members hereunder (each, a “Member” and collectively, the “Members”).
WHEREAS, the Members desire to form a limited liability company under the Act (as defined below) managed by a Board (as defined below) for the purposes and pursuant to the terms set forth herein.
NOW THEREFORE, in consideration of the mutual agreements set forth below, and intending to be legally bound, the Members hereby agree as follows:
ARTICLE 1
DEFINITIONS

For purposes of this Agreement, the following terms shall have the following meanings:

“Act”: the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101, et seq., as from time to time in effect.
“Administrative Agent”: New Mountain Finance Administration, L.L.C., a Delaware limited liability company, or an Affiliate thereof retained by the Company with Board Approval to perform non-discretionary administrative, transactional and loan services for the Company.  The Administrative Agent will not provide any investment advisory services for or on behalf of the Company or any Subsidiary or Alternative Investment Vehicle.
“Administrative Services Agreement”: the Administrative Services Agreement between the Company and the Administrative Agent, as amended from time to time with Board Approval.
“Affiliate”: with respect to a Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control,” when used with respect to any specified Person means, the possession, directly or indirectly, of the power to vote more than 25% of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” shall mean this Limited Liability Company Agreement, as it may from time to time be amended.
“Alternative Investment Vehicle” shall mean any partnership, corporation, limited liability company or other entity created by the Company, for purposes of making, holding and disposing of one or more Investments.
“Approved Valuation Expert” shall have the meaning set forth in Section 9.4(a)(iii).
“Board” shall mean the Board of Managers of the Company.

        

“Board Approval” shall mean, as to any act to be taken or approval to be provided by the Company, the approval or subsequent ratification by the Board in the manner provided in Section 6.4.
“Board Member” shall mean each individual designated or appointed to serve as a member of the Board in accordance with this Agreement.
“Business Day” shall have the meaning set forth in Section 10.15.
“Capital Account” shall mean as to each Member, the capital account maintained on the books of the Company for such Member in accordance with Section 4.1.
“Capital Call Notice” shall have the meaning set forth in Section 3.1(a).
“Capital Commitment” shall mean as to each Member, the total amount set forth on the Member List, which is contributed and/or agreed to be contributed to the Company by such Member as a Capital Contribution pursuant to the terms of this Agreement.
“Capital Contribution” shall mean as to each Member, the amount equal to the sum of (i) the aggregate amount of cash actually contributed to the equity capital of the Company by such Member and (ii) the value, as specifically approved by Board Approval, of any other assets actually contributed to the equity capital of the Company by such Member, in each case as set forth on the Member List.  The Capital Contribution of a Member that is an assignee of all or a portion of an equity interest in the Company shall include the Capital Contribution of the assignor (or a pro rata portion thereof in the case of an assignment of less than the entire interest of the assignor).
“Certificate of Formation” shall mean the certificate of formation of the Company filed under the Act, as from time to time amended.
“Code” shall mean the Internal Revenue Code of 1986, as from time to time amended.
“Collateral” shall have the meaning set forth in Section 2.4(b).
“Company” shall have the meaning set forth in the preamble of this Agreement.
“Company Counsel” shall have the meaning set forth in Section 10.11.
“Default Date” shall have the meaning set forth in Section 3.3(a).
“Default Rate” shall mean, with respect to any period, the rate equal to (i) the sum of (A) the average LIBOR Rate during such period (expressed as an annual rate) plus (B) five percent (5.0%) per annum, multiplied by (ii) a fraction, the numerator of which is the number of days in such period and the denominator of which is 365.
“Defaulting Member” shall have the meaning set forth in Section 3.3(a).
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as from time to time amended.
“ERISA Plan” shall mean a Person that is an “employee benefit plan” within shall have the meaning of, and subject to the provisions of, ERISA.

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“Expenses” shall mean all fees, costs and expenses, of whatever nature, directly or indirectly borne by the Company or for the Company by a Member, including, without limitation: Organization Costs; costs borne under the Administrative Services Agreement; any sub-administrative services agreement or borne with respect to any Subsidiary or Alternative Investment Vehicle; any expenses or payments with respect to any Facility, such as commitment fees, principal and accrued interest; all out-of-pocket and travel costs and expenses reasonably incurred by a Member in connection with Investments by the Company; but excluding, for the avoidance of doubt, any indemnities borne by the Company.
“Facility”: shall mean any credit facility secured by any assets owned directly or indirectly by the Company and/or any Subsidiary and/or Alternative Investment Vehicle in connection with the Company's incurrence of indebtedness for borrowed money.
“GAAP” shall mean United States generally accepted accounting principles or any successor accounting principles thereto, in effect from time to time.
“GAAP Profit or GAAP Loss” shall mean, as to any transaction or fiscal period, the net income or loss of the Company under GAAP.
“Harm” shall have the meaning set forth in Section 6.14(a).
“Indemnified Person” shall have the meaning set forth in Section 6.14(a).
“Independent Board Member” shall have the meaning set forth in Section 6.2(a).
“Initial Capital Contribution” shall mean the Capital Contribution made by each Member in connection with the formation of the Company (such Capital Contributions and the related value deemed approved by the Board) as detailed in Schedule C.
“Initial Closing” shall mean the date of the initial closing of the Company, which shall take place on or around April 15, 2016.
“Investment” shall mean, to the extent permitted by the Loan and Security Agreement, an investment of any type held, directly or indirectly, by the Company from time to time.  By way of example, and without limitation, Investments may include loans, notes, bonds and other debt instruments, total return swaps and other derivative instruments, participation interests, warrants, equity securities (including common stock, preferred stock, limited liability company membership interests, partnership interests and structured equity products), portfolios of any of the foregoing and derivative instruments related to any of the foregoing.
“Investment Advisers Act” shall mean the Investment Advisers Act of 1940, as from time to time amended.
“Investment Company Act” shall mean the Investment Company Act of 1940, as from time to time amended.
“Investment Period” shall mean the period commencing on the date of the Initial Closing and ending on the third anniversary of the Initial Closing, subject to extension for up to one (1) year with the approval of the Board.
“Investment Proceeds” shall have the meaning set forth in Section 5.1(a).

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“Investor Laws”: shall mean the United States Bank Secrecy Act, the United States Money Laundering Act of 1986, the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, the USA Patriot Act or any other law or regulation to which the Company, a Member, or such Member’s investment in the Company may be subject from time to time.
“LIBOR Rate” shall mean the one-month London InterBank Offered Rate, which for purposes hereof shall be deemed to equal, for each day of a calendar quarter, such rate as of the first day of such quarter.
“Loan and Security Agreement” shall have the meaning set forth in Section 2.4(b).
“LSA Administrative Agent” shall have the meaning set forth in Section 2.4(b). 
“Material Action” shall have the meaning set forth in Section 6.4(b).
“Member” shall mean each Person identified as a Member in the first sentence hereof, and any Person that is or becomes a Member of the Company in accordance with the terms of Section 7.1.
“Member List” shall have the meaning set forth in Section 2.7.
“NMFC” shall mean New Mountain Finance Corporation, a Delaware corporation, or any Person substituted for NMFC as a Member pursuant to the terms of this Agreement.
 “Non-Independent Board Member” shall mean a Board Member that is not an Independent Board Member.
“Organization Costs” shall mean all out-of-pocket costs and expenses reasonably incurred directly by the Company or indirectly for the Company by a Member or its Affiliates in connection with the formation, capitalization and financing of the Company, the initial offering of Company interests to SkyKnight and NMFC, and the preparation by the Company to commence its business operations, including, without limitation, reasonable and documented (i) fees and disbursements of legal counsel to the Company or its Affiliates and to SkyKnight and NMFC, (ii) accountant fees and other fees for professional services, (iii) travel costs and other out-of-pocket expenses, and (iv) costs incurred in connection with the establishment of a Facility.
“Outside Indemnitors” shall have the meaning set forth in Section 6.14(e).
“Person” shall include an individual, corporation, partnership, association, joint venture, company, limited liability company, trust, governmental authority or other entity.
“Portfolio Company” shall mean, with respect to any Investment, any Person that is the issuer of any equity securities, equity-related securities or obligations, debt instruments or debt-related securities or obligations (including senior debt instruments, including investments in senior loans, senior debt securities and any notes, bonds or other evidences of indebtedness, preferred equity, warrants, options, subordinated debt, mezzanine securities or similar securities or instruments) that are the subject of such Investment.  Portfolio Companies do not include Subsidiaries.
“Portfolio Investment” shall have the meaning set forth in Section 2.4(b).
“Proceeding” shall have the meaning set forth in Section 6.14(a).

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“Profit or Loss” shall mean, as to any transaction or fiscal period, the GAAP Profit (“Profit”) or GAAP Loss (“Loss”) with respect to such transaction or period, with such adjustments thereto as may be required by this Agreement; provided that in the event that the Value of any Company asset is adjusted under Section 9.4, the amount of such adjustment shall in all events be taken into account in the same manner as gain or loss from the disposition of such asset for purposes of computing Profit or Loss, and the gain or loss from any disposition of such asset shall be calculated by reference to such adjusted Value; and provided, further, that GAAP Profit or GAAP Loss may be adjusted with Board Approval, including any adjustment to amortize Organization Costs over four (4) years or such other period deemed appropriate by Board Approval.
“Proportionate Share” shall mean, as to any Member, the percentage that its Capital Contribution represents of all Capital Contributions.
“Reserved Amount” shall have the meaning set forth in Section 5.3(a).
“Revolving Credit Loan” shall mean any revolving credit facility or similar credit facility provided by the Company or any Subsidiary, directly or indirectly, to a borrower or acquired from another Person; provided that in the case of any such credit facility provided or acquired indirectly through another entity which is not wholly owned by the Company, the Revolving Credit Loan shall be the Company’s proportionate share thereof.
“SEC” shall mean the U.S. Securities and Exchange Commission or its staff.
“Securities Account Control Agreement” shall have the meaning set forth in Section 2.4(b).
“Senior Secured Loans” shall mean senior secured loans that are secured by a first lien or a second lien on some or all of the obligor’s assets, including, without limitation, traditional senior secured loans and any related Revolving Credit Loan or delayed draw loan as well as loans provided pursuant to unitranche credit facilities which are secured by a first lien on some or all of the obligor’s assets.
“SkyKnight” shall mean SkyKnight Income, LLC, a Delaware limited liability company.
“Special Member” shall have the meaning set forth in Section 8.2(b).
“Special Purpose Provisions” shall have the meaning set forth in Section 10.10(c).
“Subsidiary” shall mean any special purpose financing vehicle directly or indirectly owned, in whole or in part, and solely controlled by the Company; provided that a Subsidiary shall not include any Alternative Investment Vehicle or Portfolio Company.
“Tax Matters Member” shall have the meaning set forth in Section 6.15.
“Temporary Advance” shall have the meaning set forth in Section 3.2.
“Temporary Advance Rate” shall mean, with respect to any period, the rate equal to (i) the sum of (A) the average LIBOR Rate during such period (expressed as an annual rate) plus (B) five percent (5.0%) per annum, multiplied by (ii) a fraction, the numerator of which is the number of days in such period and the denominator of which is 365.
“Treasury Regulations” shall mean all final and temporary federal income tax regulations, as amended from time to time, issued under the Code by the United States Treasury Department.

5

        

“Transaction Documents” shall have the meaning set forth in the Loan and Security Agreement.
“Valid Company Purposes” shall include, subject to the terms and provisions of the Loan and Security Agreement, directly or indirectly: (i) making and entering into Investments or acquiring assets, and entering into, and complying with obligations under, any Facility, (ii) making Investments which the Company or any of its Subsidiaries was committed to make in whole or in part (as evidenced by a commitment letter, term sheet or letter of intent, or definitive legal documents under which less than all advances have been made) and satisfying funding or other obligations with respect to all Investments including any ongoing funding obligations relating to all Revolving Credit Loans that are revolving loans and delayed draw term loans, (iii) funding Reserved Amounts, (iv) making protective investments (including making protective advances and/or exchanges), which may require capital commitments and ongoing obligations of the Company, any Alternative Investment Vehicle or any Subsidiary, (v) satisfying collateral requirements or margin calls for any Facility or any derivative instrument or making capital contributions to avoid or cure any borrowing base deficiency, default, event of default, potential termination event or termination event relating to any Facility or any derivative instrument or other indebtedness incurred by the Company or a Subsidiary and repaying such indebtedness, (vi) repaying Temporary Advances and paying Expenses, indemnification amounts payable under this Agreement, and such other costs and expenses as set forth herein, (vii) taking any action in furtherance of the foregoing, including, without limitation, making any state or federal regulatory or public filings of certificates, documents or other instruments, or (viii) any matter in connection with the foregoing, or any decision or action relating to such matter (actions described in clauses (i) through (viii) are subject, in each instance, to obtaining Board Approval pursuant to Section 6.4).
“Value” shall mean, as of the date of computation with respect to some or all of the assets of the Company or any assets acquired by or contributed to the Company, the value of such assets determined in accordance with Section 9.4; provided that the initial Value of any asset (other than cash) contributed as a Capital Contribution shall be determined by Board Approval as provided in Section 3.1(a).
ARTICLE 2
GENERAL PROVISIONS

Section 2.1    Formation of the Limited Liability Company.      The Company was formed under and pursuant to the Act upon the filing of the Certificate of Formation in the office of the Secretary of State of the State of Delaware, and the Members hereby agree to continue the Company under and pursuant to the Act.  The Members agree that the rights, duties and liabilities of the Members shall be as provided in the Act, except as otherwise provided herein.  Each Person being admitted as a Member as of the date hereof shall be admitted as a Member at the time such Person has executed this Agreement or a counterpart of this Agreement.
Section 2.2    Company Name.      The name of the Company shall be “NMFC Senior Loan Program II LLC” or such other name as approved by Board Approval.
Section 2.3    Place of Business; Agent for Service of Process.    
(a)    The registered office of the Company in the State of Delaware shall be c/o CT Corporation, 1209 North Orange Street, Wilmington, DE 19801, or such other place as the Board may designate.  The principal business office of the Company shall be at 787 Seventh Avenue, 49th Floor, New York, New York, 10019, or such other place as may be approved by Board Approval (with prompt written notice of such principal business office being provided to each of the Members).  

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The Company may also maintain additional offices at such place or places as may be approved by Board Approval.
(b)    The agent for service of process on the Company pursuant to the Act shall be CT Corporation, 1209 North Orange Street, Wilmington, DE 19801, or such other Person as the Board may designate with Board Approval.
Section 2.4    Principal Purpose and Powers of the Company.    
(a)    The principal purpose of the Company is, directly or indirectly (through Subsidiaries, Alternative Investment Vehicles or other Persons), to make Investments, including Investments in Senior Secured Loans that are made to U.S. middle-market companies or in broadly syndicated Senior Secured Loans.
(b)    In furtherance of such purpose, the Company shall have the following powers, subject in each instance to obtaining Board Approval pursuant to Section 6.4:
(i)    to acquire corporate loans that the Board believes satisfy the eligibility criteria for a permitted loan under the terms of the Loan and Security Agreement so long as the Loan and Security Agreement remains in full force and effect (otherwise, as determined by the Board) (collectively, the “Portfolio Investments”) by way of purchase or capital contribution and to fund all or a portion of the purchase price thereof and expenses relating thereto or incurred in connection with the Loan and Security Agreement and the other Transaction Documents, by borrowing from the lenders under the Loan and Security Agreement;
(ii)    to purchase Portfolio Investments from Persons who are not Affiliates of the Company, and so long as the Loan and Security Agreement remains in full force and effect, solely to the extent permitted by the Loan and Security Agreement;
(iii)    upon purchasing a Portfolio Investment that is a commercial loan, to become a party to any related agreements as a lender in respect of such Portfolio Investment, and so long as the Loan and Security Agreement remains in full force and effect, solely to the extent permitted by the Loan and Security Agreement;
(iv)    to dispose of Portfolio Investments from time to time, and so long as the Loan and Security Agreement remains in full force and effect, solely to the extent permitted by the Loan and Security Agreement;
(v)    to hold property ancillary to the Portfolio Investments such as related equity securities and proceeds thereof, and so long as the Loan and Security Agreement remains in full force and effect, solely to the extent permitted by the Loan and Security Agreement;
(vi)    to enter into and to exercise its rights and perform its obligations under the Loan and Security Agreement (as amended, modified or supplemented, the “Loan and Security Agreement”), among the Company, as the borrower, each of the lenders from time to time party thereto, NMFC, as the collateral manager, Wells Fargo Bank, National Association, as the administrative agent (the “LSA Administrative Agent”), and Wells Fargo Bank, National Association, as the collateral custodian;

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(vii)    to enter into and to exercise its rights and perform its obligations under the Account Control Agreement, among the Company, as pledgor, the LSA Administrative Agent, and Wells Fargo Bank National Association, as the collateral custodian and securities intermediary (as amended, modified or supplemented from time to time);
(viii)    to grant a security interest to the LSA Administrative Agent, for the benefit of the Secured Parties (as defined in the Loan and Security Agreement), in all of the Company’s right, title and interest in and to all of its assets, including the Portfolio Investments and the proceeds thereof (as more specifically described in the Loan and Security Agreement, the “Collateral”) to secure all of its obligations under the Transaction Documents;
(ix)    to open and maintain all bank accounts and securities accounts permitted by the Loan and Security Agreement and to pay all fees and expenses in connection therewith;
(x)    to preserve and maintain its limited liability company existence; and
(xi)    to engage in any activity and to exercise powers permitted to limited liability companies under the laws of the State of Delaware that are incidental to the foregoing and necessary or convenient to accomplish the foregoing.
Section 2.5    Fiscal Year.      The fiscal year of the Company shall end on December 31 of each year.
Section 2.6    Liability of Members.      Except as expressly provided in this Agreement, a Member shall have such liability for the repayment, satisfaction and discharge of the debts, liabilities and obligations of the Company only as is provided by the Act.  A Member that receives a distribution made in violation of the Act shall be liable to the Company for the amount of such distribution to the extent, and only to the extent, required by the Act.  The Members shall not otherwise be liable for the repayment, satisfaction or discharge of the Company’s debts, liabilities and obligations, except that each Member shall be required to make Capital Contributions in an amount up to their respective Capital Commitments in accordance with the terms of this Agreement and shall be required to repay any distributions which are not made in accordance with this Agreement.
Section 2.7    Member List.      The Administrative Agent shall cause to be maintained in the principal office of the Company a list in the form of Schedule A attached hereto (the “Member List”) setting forth, with respect to each Member, such Member’s name, address, Capital Commitment, Capital Contributions, Proportionate Share and such other information as the Administrative Agent or the Board may deem necessary or desirable or as required by the Act.  The Administrative Agent shall from time to time update the Member List as required to reflect accurately the information therein.  Any reference in this Agreement to the Member List shall be deemed to be a reference to the Member List as in effect from time to time.
Section 2.8    Member Representations and Warranties.      Each Member represents and warrants that such Member (and each holder of voting securities of such Member, to the extent that such Member may be deemed to have been formed for the purpose of investing in the Company) are “qualified purchasers”, as that term is defined under the Investment Company Act. Each Member further represents and warrants that such Member is not a “Benefit Plan Investor”, as that term is defined under Section 3(42) of ERISA and any regulations promulgated thereunder.

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Section 2.9    Separate Legal Entity.  Notwithstanding anything to the contrary in this Agreement or in any other document governing the Company, the Company shall be operated in such a manner that it would not be substantively consolidated in the estate of any Person in the event of a bankruptcy or insolvency of such Person, and in such regard the Company  shall:
(a)    at all times have at least one Independent Board Member whose consent shall be required for the Company to take any Material Action;
(b)    not become involved in the day-to-day management of any other Person;
(c)    conduct all business correspondence of the Company and other communication in the Company’s own name and through its own authorized officers and/or agents;
(d)    make all investments to be made by it solely in its own name;
(e)    not commingle any of its assets with the assets of any Member or with those of any other Person and maintain its own deposit account or accounts, separate from those of any other Person, with commercial banking institutions, except to the extent, if any, permitted by the Loan and Security Agreement;
(f)    maintain (i) its Company records and books of account and its financial and accounting books and records in compliance with generally accepted accounting principles, separate from those of any Member or from those of any other Person and (ii) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; provided, however, that the Company’s assets and liabilities may be included in a consolidated financial statement of its Affiliates so long as (x) the separateness of the Company from such Affiliate and (y) the fact that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate is disclosed by such Affiliate within all such consolidated financial statements;
(g)    pay solely from its own assets all obligations, liabilities and indebtedness of any kind incurred by the Company, and not pay, assume or guarantee from its assets any obligations or indebtedness of any Member or any other Person or hold itself or its credit out as being available to satisfy the obligations of any Member or any other Person;
(h)    not engage in transactions except as expressly set forth in this Agreement, the Loan and Security Agreement or any other Transaction Document and matters necessarily incident thereto and shall observe all necessary, appropriate and customary limited liability company formalities;
(i)    not enter into any transaction with any Affiliate, other than those transactions expressly contemplated by this Agreement or the Loan and Security Agreement;
(j)    transact all business with Affiliates on an arm’s length basis and pursuant to enforceable agreements (it being understood that the Transaction Documents satisfy such requirement);
(k)    prepare separate tax returns;

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(l)    maintain sufficient duly compensated agents (including the Administrative Agent acting pursuant to the Administrative Services Agreement) to run its contemplated business and operations and compensate its agents from its own available funds for services provided to it;
(m)    not acquire obligations or securities of any Member or, except as otherwise provided in the Loan and Security Agreement or any other Transaction Document, pledge its assets for the benefit of any other Person;
(n)    except as required by the Loan and Security Agreement or any other Transaction Document, not assume or guaranty any liabilities of any Member or any other Person;
(o)    not incur, create or assume any indebtedness for borrowed money other than as expressly permitted herein or under the Loan and Security Agreement or any other Transaction Document;
(p)    not make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Company may invest in those investments permitted herein and under the Loan and Security Agreement;
(q)    to the fullest extent permitted by law, not engage in any dissolution, liquidation, consolidation, merger, asset sale or transfer of ownership interests other than such activities as are expressly permitted herein or pursuant to the Loan and Security Agreement or any other Transaction Document;
(r)    not declare or permit any distribution to any Member or any of their respective Affiliates other than out of legally available funds and otherwise in accordance with the Loan and Security Agreement or any other Transaction Document;
(s)    hold itself out and identify itself as a separate and distinct entity under its own name and not as a division or part of any other Person.  The Company shall engage in transactions solely in its own name and through its own authorized officers and agents.  Except to the extent provided herein, in the Administrative Services Agreement or in the Loan and Security Agreement or any other Transaction Document, no Affiliate of the Company shall be appointed as an agent of the Company;
(t)    promptly correct any known misunderstanding regarding its separate identity; and
(u)    maintain adequate capital in light of its contemplated business operations (provided, however, the foregoing shall not require the Members to make additional capital contributions to the Company) and not engage in any transaction with any of its Affiliates involving any intent to hinder, delay or defraud any Person.
Failure of the Company to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of the Independent Board Member.

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ARTICLE 3
COMPANY CAPITAL AND INTERETS

Section 3.1    Capital Commitments; Capital Contributions.    
(a)    Each Member’s Capital Commitment shall be set forth on Schedule D and on the Member List.  Each Member's initial Capital Contributions shall be set forth on Schedule C. In exchange for each Member's Capital Commitment, each Member has received an interest in the Company, including such Member’s interest in the capital, income, gains, losses, deductions and expenses of the Company, the right to designate, appoint, remove and replace Board Members and their respective successors and the right to vote, if any, on certain Company matters, in each instance in accordance with and subject to the terms and conditions of this Agreement.  There will only be one class of interests in respect of and issued by the Company.  Each Member’s Capital Contribution shall be subject to Board Approval and shall be made from time to time upon no less than five (5) Business Days prior notice from the Administrative Agent (or any other Person with the power and authority to call the Capital Commitments) specifying (i) the amount then to be paid, (ii) the intended use of such funds (including for the making or purchasing interests in Investments on behalf of the Company, any Subsidiary or Alternative Investment Vehicle, payment of Expenses, and payment of indemnification and/or other obligations), and (iii) the due date for the related Capital Contribution (each, a “Capital Call Notice”); provided that, except in the case of a Member’s repayment of the amount of any Temporary Advance pursuant to Section 3.2, the Board shall not authorize any Capital Contribution from a Member unless a related capital call is made on all other Members, pro rata, based upon their respective Capital Commitments; provided further that to the extent that the intended use of any such capital call is to avoid an adverse consequence under the Loan and Security Agreement, the Capital Contributions with respect to such capital call shall not exceed 10% of the Advances Outstanding (as such term is defined in the Loan and Security Agreement) as of the date of such capital call.  Each Capital Contribution shall be payable in cash in U.S. dollars or, with Board Approval, in in-kind contributions of Investments or other assets at a value and pursuant to transfer documentation approved by the Board.  For the avoidance of doubt, for purposes of calculating the unpaid balances of the Capital Commitments, in-kind contributions will carry the value approved by the Board at the time the contribution is made.  Except in the case of a Member’s repayment of the amount of any Temporary Advance pursuant to Section 3.2, Capital Contributions shall be made by all Members pro rata based on their respective Capital Commitments.
(b)    Capital Contributions made in cash which are not used for their intended purpose or for any other purpose permitted by the terms of this Agreement shall be returned to the Members within ninety (90) days in the same proportion in which made, in which case such amounts shall be added back to the unfunded Capital Commitments of the Members and may be recalled by the Company as set forth in this Article 3; provided, however, that no such amount shall be paid to a Member that is, or has been, a Defaulting Member at any time during such ninety (90) day period.  Capital Contributions which have been returned to Members also may be recalled to the extent provided by Section 5.3(a).
(c)    The Members shall under no circumstance be obligated to make Capital Contributions to the Company in excess of their respective Capital Commitments.
(d)    During the Investment Period, the Company may request Capital Contributions  to fund the purchase of Investments and to pay Expenses.  After the end of the Investment Period, the Members shall be released from any further obligations to make Capital Contributions with respect 

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to their Capital Commitments, except to (i) fund a pending Capital Call Notice; (ii) fund an Investment that the Company has committed to prior to the termination of the Investment Period; (iii) fund an Investment under active consideration pursuant to a memorandum of understanding or letter of intent, whether or not binding, by the Company prior to the end of the Investment Period; and (iv) take any actions in clauses (ii) , (iii), (v) and (vi) of Valid Company Purposes.  
Section 3.2    Temporary Advances.      
(a)    Subject to Board Approval, one or more Members or their subsidiaries, in its discretion, may make loans (each, a “Temporary Advance”) to temporarily fund obligations for Valid Company Purposes until Capital Contributions are made by the Members as set forth in Section 3.1.  Such Temporary Advances plus interest at the Temporary Advance Rate shall be returned from any Capital Contributions made by the Member(s) not making Temporary Advances under Section 3.1 or, as and when available, from Investment Proceeds, with any unreturned Temporary Advances plus interest at the Temporary Advance Rate paid as set forth in Section 5.1; provided, that, a Member’s repayment of interest in respect of a Temporary Advance shall not reduce the amount of such Member(s) remaining Capital Commitment.  For example, if the Company has called Capital Contributions of $200 from the Members (i.e., $100 per Member), and one Member contributes $200 because the other Member is unwilling or unable to contribute its $100 before the date required by Section 3.1, then the $100 advanced on behalf of the other Member shall constitute a Temporary Advance.
(b)    If the Board fails to timely approve a call for Capital Contributions in cash in accordance with Section 3.1 that is (i) requested by any Member and (ii) intended to avoid or cure any borrowing base deficiency, default, event of default, potential termination event or termination event relating to any Facility or any derivative instrument or other indebtedness incurred by the Company or a Subsidiary, each of the other Members may, in its sole discretion, fund in cash only the amount necessary to avoid or cure such borrowing base deficiency, default, event of default, potential termination event or termination event as required under the terms of any such Facility, derivative instrument or other indebtedness of the Company or any Subsidiary without Board Approval, and the amount of any such funding shall be shall be deemed a Temporary Advance and returned to the advancing Member (together with interest accruing on such amount at the Temporary Advance Rate) from any Capital Contributions under Section 3.1 or, as and when available, from Investment Proceeds, with any unreturned Temporary Advances plus interest at the Temporary Advance Rate paid as set forth in Section 5.1; provided that all interest due and payable in respect of any Temporary Advance shall be the sole responsibility of the Member(s) not making Temporary Advances, shall be paid by such Member(s) simultaneously with their related Capital Contribution(s) and shall not reduce the amount of such Member(s) remaining Capital Commitment.

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Section 3.3    Defaulting Members.    
(a)    Upon the failure of any Member (a “Defaulting Member”) to pay in full any portion of such Member’s Capital Commitment within the time period specified in the related Capital Call Notice (the Business Day next succeeding the tenth (10th) Business Day immediately following the expiration of such time period being the “Default Date”) in accordance with Section 3.1(a), each non-Defaulting Member, in its sole discretion, shall have the right, without notice to the Defaulting Member, to pursue one or more of the following remedies on behalf of the Company:
(i)    collect such unpaid portion (and all attorneys’ fees and other costs incident thereto) by exercising and/or pursuing any legal remedy the Company may have;
(ii)    contribute such unpaid portion to the Company, which amount shall be deemed a Temporary Advance and returned to the non-defaulting Member pursuant to Section 3.2 hereof;
(iii)    charge interest on the unpaid balance of any overdue Capital Commitment at a rate equal to the Default Rate, from the date such balance was due and payable through the date full payment for such Capital Commitment is actually made; and/or
(iv)    exercise all rights of a secured creditor at law or in equity, including the right to sell all of the interest in the Company held by the Defaulting Member to the Company or another Person (including, without limitation, an existing Member) at a price equal to the Capital Account of the Defaulting Member adjusted to reflect the Value of the Company as determined as of the date of the last valuation pursuant to Section 9.4 (and be required to assume the Defaulting Member’s remaining Capital Commitment), with the proceeds from such sale to be applied in the following order: first, to the payment of the expenses of the sale; second, to the payment of the expenses of the Company resulting from the default, including court costs and penalties, if any, and reasonable attorneys’ fees and costs; third, to the payment of all amounts due from the Defaulting Member to the Company, including the amount of the Defaulting Member’s Capital Contribution required pursuant to the related Capital Call Notice and interest due thereon pursuant to Section 3.3(a)(iii); fourth, to the Defaulting Member, an amount up to fifty percent (50%) of the amount the Defaulting Member previously contributed to the Company less any distributions previously made to the Defaulting Member; and thereafter, any remainder to the Company;
Except as set forth below, the non-Defaulting Member’s election to pursue any one of such remedies shall not be deemed to preclude the Company or such non-Defaulting Member from pursuing any other such remedy, or any other available remedy, simultaneously or subsequently.  For the avoidance of doubt, if applicable, a Member shall not be deemed to be a Defaulting Member until the resolution of any dispute as to whether the Member failed to pay in full any portion of such Member’s Capital Commitment within the time period specified in the related Capital Call Notice in accordance with Section 3.1(a).
(b)    Notwithstanding any provision of this Agreement to the contrary,
(i)    a Defaulting Member shall remain fully liable to the creditors of the Company to the extent provided by law as if such default had not occurred;

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(ii)    a Defaulting Member shall not be entitled to distributions made after the Default Date until the default is cured; 
(iii)    a default may be cured by a Defaulting Member within ten days by contribution to the Company of an amount equal to the sum of the unpaid balance of any overdue Capital Commitment plus interest accrued therein at the Default Rate; and
(iv)    the Company shall not make new Investments after the Default Date until the default is cured, except as permitted pursuant to clauses (ii) through (viii) of Valid Company Purposes.
Section 3.4    Interest or Withdrawals.      Except for the payment of interest in connection with a Temporary Advance as provided in Section 3.2, no Member shall be entitled to receive any interest on any Capital Contribution to the Company.  Except as otherwise specifically provided herein, no Member shall be entitled to withdraw any part of its Capital Contributions or Capital Account balance.
ARTICLE 4
ALLOCATIONS

Section 4.1    Capital Accounts.    
(a)    An individual capital account (a “Capital Account”) shall be maintained for each Member consisting of such Member’s Capital Contributions, increased or decreased by Profit or Loss allocated to such Member, decreased by the cash or Value of property distributed to such Member (giving net effect to any liabilities the property is subject to, or which the Member assumes), and otherwise maintained consistent with this Agreement.  In the event that the Administrative Agent determines that it is prudent to modify the manner in which Capital Accounts, including all debits and credits thereto, are computed in order to be maintained consistent with this Agreement, the Administrative Agent shall, subject to Board Approval, make such modifications and promptly inform the Members of each such modification.  Capital Accounts shall be maintained in a manner consistent with applicable Treasury Regulations.
(b)    Profit or Loss shall be allocated among Members as of the end of each quarter; provided that Profit or Loss shall also be allocated at the end of (i) each period terminating on the date of any withdrawal by any Member, (ii) each period terminating immediately before the date of any admission, or any increase in Capital Commitment, of any Member, (iii) each period terminating immediately before the date of any change in the relative Capital Account balances of the Members, (iv) the liquidation of the Company, or (v) any period which is determined by Board Approval to be appropriate.
Section 4.2    General Allocations.      Profit or Loss shall be allocated among the Members as provided by this Section 4.2.  
(a)    Loss (after taking into account any interest expense incurred on Temporary Advances and repayment of the amount advanced with respect thereto) shall be allocated among the Members pro rata in accordance with their Capital Account balances.  Profit shall be allocated among the Members (a) first, pro rata until the cumulative amount of Profit allocated to a Member equals the cumulative amount of Loss previously allocated to such Member, and thereafter (b) pro rata in accordance with the Members’ Capital Account balances.

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(b)    The provisions of this Agreement are intended to comply with Section 704(b) of the Code and the Treasury Regulations promulgated thereunder and shall be interpreted and applied in a manner consistent with such Section and such Treasury Regulations.
Section 4.3    Changes of Interests.      For purposes of allocating Profit or Loss for any fiscal year or other fiscal period between any permitted transferor and transferee of a Company interest, or between any Members whose relative Company interests have changed during such period, or to any withdrawing Member that is no longer a Member in the Company, the Company shall allocate according to any method allowed by the Code and approved by the Tax Matters Member.  Distributions with respect to an interest in the Company shall be payable to the owner of such interest on the date of distribution subject to the provisions of this Agreement.  For purposes of determining the Profit or Loss allocable to or the distributions payable to a permitted transferee of an interest in the Company or to a Member whose interest has otherwise increased or decreased, Profit or Loss allocations and distributions made to predecessor owners with respect to such transferred interest or increase of interest shall be deemed allocated and made to the permitted transferee or other holder.
Section 4.4    Income Taxes and Tax Capital Accounts.    
(a)    The Company shall be treated as a partnership for U.S. federal income tax purposes.
(b)    Each item of income, gain, loss, deduction or credit shall be allocated in the same manner as such item is allocated pursuant to Section 4.2.
(c)    Income, gains, losses and deductions with respect to any property (other than cash) contributed or deemed contributed to the capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its value at the time of the contribution or deemed contribution in accordance with Section 704(c) of the Code and the Treasury Regulations.  Such allocations shall be made in such manner and utilizing such permissible tax elections as determined by the Board.
If there is a revaluation of the property of the Company, subsequent allocations of income, gains, losses or deductions with respect to such property shall be allocated among the Members so as to take account of any variation between the adjusted tax basis of such property to the Company for federal income tax purposes and its value in accordance with Section 704(c) of the Code and the Treasury Regulations.  Such allocations shall be made in such manner and utilizing such permissible tax elections as determined by the Board.
(d)    Allocations pursuant to this Section 4.4 are solely for federal, state and local tax purposes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or allocable share of income, gain, loss, deduction and credit (or items thereof).

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ARTICLE 5
DISTRIBUTIONS

Section 5.1    General.    
(a)    Subject to Section 5.1(b), amounts received by the Company pursuant to Section 2.7(a)(10), Section 2.7(b)(12) or Section 2.8(8) of the Loan and Security Agreement (collectively “Investment Proceeds”) shall be used by the Company in the following order of priority:
(i)    First, to pay any and all taxes of whatever nature owed directly or indirectly by the Company;
(ii)    Second, to pay Expenses;
(iii)    Third, to pay any interest accrued on outstanding Temporary Advances;
(iv)    Fourth, to pay any outstanding Temporary Advances;
(v)    Fifth, to distribute any amounts to the Members in accordance with Section 5.1(c);
(vi)    Sixth, upon the dissolution of the Company pursuant to Section 8.2, the payment of all amounts due and deposit of all reasonable reserves required pursuant to Section 8.3; and
(vii)    Seventh, with Board Approval, to the Members as distributions in respect of their interests in the Company in proportion to their respective Capital Account balances.
(b)    The amount of any distributions of Investment Proceeds may be reduced and/or reinvested as provided by Section 5.2 and Section 5.3, including, without limitation, for the purpose of reinvesting proceeds received from Investments as set forth in Section 5.3.
(c)    To the extent of available cash and cash equivalents following the payment of clauses (i) through (iv) of Section 5.1(a), the Company shall make distributions quarterly in an amount equal to the investment company taxable income and net capital gains (each as computed under Subchapter M of the Code) earned in the preceding quarter, shared among the Members in proportion to their respective Capital Account balances. Available cash and cash equivalents shall exclude Reserved Amounts and any amounts, determined with Board Approval, that are likely to be used for Valid Company Purposes in the future.
Section 5.2    Withholding.      The Company may withhold from any distribution to any Member any amount which the Company has paid or is obligated to pay in respect of any withholding or other tax, including, without limitation, any interest, penalties or additions with respect thereto, imposed on any interest or income of or distributions to such Member, and such withheld amount shall be considered an interest payment or a distribution, as the case may be, to such Member for purposes hereof.  If no payment is then being made to such Member in an amount sufficient to pay the Company’s withholding obligation, any amount which the Company is obligated to pay shall be deemed an interest-free advance from the Company to such Member, payable by such Member by withholding from subsequent distributions or, with Board 

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Approval, within ten (10) days after receiving written request for payment from the Company or Administrative Agent.
Section 5.3    Reserves; Re-Investment; Certain Limitations; Distributions in Kind.      Notwithstanding the foregoing provisions:
(a)    The Company may withhold from any distribution a reasonable reserve which the Board determines to be appropriate for working capital of the Company or to discharge Temporary Advances, costs, Expenses, indemnification amounts payable under this Agreement, and liabilities of the Company (whether or not accrued or contingent), or otherwise to be in the best interests of the Company for any Valid Company Purpose (such reasonable reserve being referred to herein as the “Reserved Amount”).  Any part or all of such Reserved Amount that is released from reserve with Board Approval (other than to make payments on account of a purpose for which the reserve was established) shall be distributed to the Members in accordance with Section 5.1 through Section 5.2.  
(b)    During the Investment Period, the Board may reinvest (or retain for reinvestment) all or a portion of the Investment Proceeds received during the Investment Period to make any Investment approved by the Board that is reasonably expected at the time the amount is retained.  To the extent the Company makes a distribution of Investment Proceeds to a Member during the Investment Period or thereafter in accordance with this Section 5.3(b) representing a return of capital, such amount shall be added to the unfunded Capital Commitment of such Member and may be recalled by the Company under Article 3; provided that in no event will a Member’s unfunded Capital Commitment be increased above its aggregate Capital Commitment.    After the end of the Investment Period, all or any portion of the Investment Proceeds received by the Company may be used, in the Board’s discretion, for the purposes that Capital Contributions may be called after the Investment Period pursuant to Section 3.1(d).
(c)    In no event shall the Company be required to make a distribution to the extent that it would (i) render the Company insolvent or (ii) violate Section 18-607(a) of the Act.
(d)    No part of any distribution shall be paid to any Member which owes the Company, at the time of such distribution, any amount required to be paid to the Company pursuant to Article 3.  Any such withheld distribution shall be applied against the past due amounts (including any unpaid interest that has accrued on such past due amounts) until (i) such Member’s Capital Commitment has been paid in full or (ii) all past due installments of such Member’s Capital Contributions required by Article 3 have been paid in full by such Member, and, thereafter, the remaining balance, if any, shall be paid to such Member, without interest.
(e)    The Company shall not distribute Investments in kind (excluding cash and cash equivalents) other than with Board Approval.  Distributions of loans, securities and of other non-cash assets of the Company other than upon the dissolution and liquidation of the Company shall only be made pro rata to all Members (in proportion to their respective shares of the total distribution) with respect to each loan security or other such asset distributed.  Securities listed on a national securities exchange that are not restricted as to transferability and unlisted securities for which an active trading market exists and that are not restricted as to transferability shall be valued in the manner contemplated by Section 9.4 as of the close of business on the day preceding the distribution, and all other loans, securities and other non-cash assets shall be valued as determined in the last valuation made pursuant to Section 9.4.

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(f)    Subject to Board Approval, a Member may elect to waive all or any portion of a distribution otherwise payable to such Member at which time the waived amount of the distribution shall be treated as a Capital Contribution by such Member and shall decrease such Member’s unfunded Capital Commitment by the same amount.
ARTICLE 6
MANAGEMENT OF COMPANY

Section 6.1    Management Generally; Approval of Administrative Services Agreement.    
(a)    The management of the Company and its affairs (including exercising any right, power, privilege or interest of the Company in or with respect to any Subsidiary and Alternative Investment Vehicle) shall be vested in the Board, which shall act as the “manager” of the Company for the purposes of the Act.  Unless otherwise provided herein, all consents, approvals, votes, waivers or other decisions to be made by the Members hereunder and under the Administrative Services Agreement shall require Board Approval.  Notwithstanding the foregoing or any other provision contained herein to the contrary, to the extent that any action is required under applicable law to be taken by the Members (including in their capacity as members of the Company), the unanimous vote of all Members will control.
(b)    The Company is entering into the Administrative Services Agreement with the Administrative Agent, pursuant to which certain non-discretionary administrative functions are delegated by the Board to the Administrative Agent, which Administrative Agent may further delegate any such functions to a sub-administrator with Board Approval.  The Administrative Agent will not provide any investment advisory services for or on behalf of the Company or any Subsidiary or Alternative Investment Vehicle.  The Administrative Services Agreement is hereby approved by the Members, and shall not require Board Approval for its initial execution and delivery; provided that any amendments thereto shall be subject to Board Approval.
Section 6.2    Composition of the Board.    
(a)    Subject to Section 2.9, all business and affairs of the Company (including exercising any right, power, privilege or interest of the Company in or with respect to any Subsidiary and Alternative Investment Vehicle) shall be managed by or under the direction of the Board.  The Members may determine at any time by mutual agreement the number of Board Members to constitute the Board and the authorized number of Board Members may be increased or decreased by unanimous approval of the Members at any time; provided that at all times the Board shall include at least one Board Member who is an Independent Board Member.  An “Independent Board Member” shall be a Board Member who is not at such time, and shall not have not been at any time, (i) a manager, officer, employee or Affiliate of the Company or any major creditor, or a manger, officer or employee of any such Affiliate (other than an Independent Board Member or similar position of the Company or an Affiliate) or (ii) the beneficial owner of any limited liability company interests of the Company or any voting, investment or other ownership interests of any Affiliate of the Company or of any major creditor. The term “major creditor” shall mean a financial institution to which the Administrative Agent, the Company, any lender to the Company or any of their respective subsidiaries or Affiliates has outstanding indebtedness for borrowed money in a sum sufficiently large as would reasonably be expected to influence the judgment of the proposed Independent Board Member adversely to the interest of the Company when its interests are adverse to those of the Administrative Agent, the Company, any such lender or any of their Affiliates and successors. The initial number 

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of Board Members shall be five (5), and each Member shall have the right to designate or appoint two (2) initial Board Members, and the Members shall designate and appoint by mutual agreement the initial Independent Board Member.  At all times, the Board shall have equal representation between the Members.  Each Board Member designated or appointed by a Member (or the Members, as applicable) shall hold office until a successor is designated or appointed or until such Board Member’s earlier death, resignation, expulsion or removal. No resignation or removal of an Independent Board Member, and no appointment of a successor Independent Board Member, shall be effective until such successor shall have accepted his or her appointment as an Independent Board Member by a written instrument and shall have signed this Agreement pursuant to Section 8.2(b). In the event of any vacancy in the Board, the Members may designate and appoint by mutual agreement a replacement board member to fill such vacancy and in the event of a vacancy in the position of Independent Board Member, the Members shall, as soon as practicable, designate and appoint a successor Independent Board Member. The Independent Board Member shall have a single vote solely in connection with any Material Action, and the Non-Independent Board Members designated and appointed by each Member (or the Members, as applicable) collectively shall have a single vote on all matters.  Each Non-Independent Board Member must be an officer or employee of a Member.
(b)    Subject to Section 2.9, the Board shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, and the Board has the authority to bind the Company.
Section 6.3    Meetings of the Board.      The Board may hold meetings, both regular and special, within or outside the State of Delaware.  Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.  Special meetings of the Board may be called by a Board Member on not less than one (1) Business Day’s notice to each Board Member by telephone, facsimile, mail, electronic mail or any other means of electronic communication designated by the Board Member, and special meetings shall be called by a Board Member in like manner and with like notice upon the written request of any one or more of the Board Members.  A Board Member may waive notice to the Board Member of a meeting for which purpose a Board Member’s participation in a meeting shall be deemed to waive notice of the meeting if notice was not provided pursuant to this Section 6.3.
Section 6.4    Quorum; Acts of the Board; Material Actions.        
(a)    At all meetings of the Board, a quorum requires at least two (2) Board Members; provided that at least one (1) Board Member is present that was designated or appointed by each Member.  The unanimous approval of all the Board Members present at any meeting at which there is a quorum shall be required to approve any act of or on behalf of the Company, including any act set forth on Schedule B attached hereto; provided that the Board may approve any act of or on behalf of the Company without a meeting and without a vote if consented to, in writing or by electronic transmission, by Board Members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Board Members entitled to vote thereon were present and voted.  If a quorum shall not be present at any meeting of the Board, the Board Members present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.  Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if an equal number of members of the Board designated or appointed by each Member consent thereto by executing the related written consent (including, without limitation, by e-mail), and the writing or writings are filed with the minutes of proceedings of the Board.  If, at the time of a meeting of the Board, a 

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Member is a Defaulting Member, a non-defaulting Member may unilaterally elect to (i) waive the requirement that a Board Member designated or appointed by the Defaulting Member be present for purposes of achieving quorum and/or (ii) elect to allow any act of or on behalf of the Company to be taken with unanimous approval of the present Board Members designated or appointed by the non-defaulting Members.
(b)    Notwithstanding any other provision of this Agreement or any other document governing the formation, management or operation of the Company and notwithstanding any provision of law that otherwise so empowers the Company, the Members, the Board, the Board Members or any other Person, neither the Board, the Board Members nor any other Person shall be authorized or empowered, nor shall they permit the Company, without the prior unanimous written consent of all of the Board Members, including the Independent Board Member (and no such actions shall be taken or authorized unless there is at least one Independent Board Member then serving in such capacity), take any of the following actions with respect to the Company (each such action, a “Material Action”):  to institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against the Company or to the substantive consolidation of the Company with any Member or Affiliate, or file a petition or consent to a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, or to seek any relief under any law relating to the relief from debts or the protection of debtors, or consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Company or a substantial part of its property, or make any assignment for the benefit of creditors, or, except as required by law, admit in writing its inability to pay its debts generally as they become due, or take any action in furtherance of any of the foregoing or amend any of the provisions that prohibit acting without the consent of the Independent Board Member or that require the consent of the Independent Board Member to pursue any action.
Section 6.5    Participation in Meetings by Electronic Communications.      Members of the Board may participate in meetings of the Board by means of telephone conference, video conference or similar communications equipment that allows all persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting.  If all the participants are participating by telephone conference or similar communications equipment, the meeting shall be deemed to be held at the principal place of business of the Company.
Section 6.6    Compensation of Board Members; Expenses.      The Board shall have the authority to fix the compensation of the Board Members. Non-Independent Board Members shall not receive any compensation for service on the Board.  The Board Members may be paid their expenses, if any, of attendance at meetings of the Board, which may be a reimbursement or a fixed sum for attendance at each meeting of the Board (in such amount as determined by the Board).  No such payment shall preclude any Board Member from serving the Company in any other capacity and receiving compensation therefor.  
Section 6.7    Removal of Board Members.  
(a)        Unless otherwise restricted by law, any Non-Independent Board Member may be removed or expelled, with or without cause, at any time by the Member that designated or appointed such Non-Independent Board Member, and any vacancy caused by any such removal or expulsion may be filled by an officer or employee of such Member, with the approval of the other Member (which approval shall not be unreasonably withheld).  

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(b)    The Independent Board Member shall only be removed (i) for acts or omissions that constitute willful disregard of, bad faith or gross negligence with respect to, or a breach of such Independent Board Member’s duties under this Agreement, (ii) if such Independent Board Member has engaged in or has been charged with, or has been convicted of, fraud or other acts constituting a crime under any law applicable to such Independent Board Member or acts relating to dishonesty, embezzlement, falsification of records or similar acts of malfeasance, (iii) if such Independent Board Member is unable to perform his or her duties as Independent Board Member due to death, disability or incapacity, (iv) if such Independent Board Member no longer meets the qualifications for an Independent Board Member set forth above or (v) with the consent of each Member (for any or no reason).  No resignation or removal of an Independent Board Member, and no appointment of a successor Independent Board Member, shall be effective until such successor shall have accepted his or her appointment as an Independent Board Member by a written instrument and shall have signed this Agreement pursuant to Section 8.2(b).
Section 6.8    Board as Agent.      To the extent of its powers set forth in this Agreement, the Board is the manager of the Company for the purpose of the Company’s business, and the actions of the Board taken in accordance with such powers set forth in this Agreement shall bind the Company.  Notwithstanding the last sentence of Section 18-402 of the Act, except as provided in this Agreement or in a resolution of the Board, neither a Member nor a Board Member may bind the Company.
Section 6.9    Officers.      The officers of the Company shall be designated by the Board.  Additional or successor officers of the Company shall be chosen by the Board.  Any number of offices may be held by the same person.  The salaries, if any, of all officers shall be fixed by or in the manner prescribed by the Board, although initially it is not expected that officers will receive any compensation.  The officers of the Company shall hold office until their successors are chosen and qualified.  Any officer may be removed at any time, with or without cause, by the affirmative vote of the Board.  Any vacancy occurring in any office of the Company shall be filled by the Board.  
Section 6.10    Officers as Agents.      The officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Board, not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business and the actions of the officers taken in accordance with such powers shall bind the Company.
Section 6.11    Duties of Board, Board Members and Officers; Disclaimer of Duties.  
(a)        To the extent that, at law or in equity, the Board, a Board Member or an officer of the Company has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any Member, the Board or such Board Member or officer acting in good faith pursuant to the terms of this Agreement shall not be liable to the Company or to any Member for its good faith reliance on the provisions of this Agreement.  Furthermore, each Non-Independent Board Member shall be entitled to act in the interests of the Member that elected, designated or appointed them to the Board, and such Non-Independent Board Member shall not, by virtue of such position, be deemed to owe fiduciary or other duties to the Company or to the other Members.  Accordingly, each of the Members and the Company hereby disclaims and waives any and all fiduciary or other duties that, absent such waiver, may be specified or implied by applicable law, and in doing so, acknowledges and agrees that the duties and obligations of each Member, Non-Independent Board Member and officer to each other and to the Company are only as may be expressly set forth in this Agreement.  The provisions of this Agreement, to the extent that they restrict the duties and liabilities of the Board, a Non-Independent Board Member or an officer otherwise existing at law or in equity, 

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are agreed by the Members and the Company to replace such other duties and liabilities of the Board or such Board Member or officer. 
(b)    To the fullest extent permitted by law, including Section 18-1101(c) of the Act, and notwithstanding any duty otherwise existing at law or in equity, the Independent Board Member shall consider only the interests of the Company, including its respective creditors, in acting or otherwise voting on the matters referred to in Section 6.4(b).  Except for duties to the Company as set forth in the immediately preceding sentence (including duties to the Members and the Company’s creditors solely to the extent of their respective economic interests in the Company but excluding (i) all other interests of the Members, (ii) the interests of other Affiliates of the Company, and (iii) the interests of any group of Affiliates of which the Company is a part), the Independent Board Member shall not have any fiduciary duties to the Members, any officer of the Company or any other Person bound by this Agreement; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing.  To the fullest extent permitted by law, including Section 18-1101(e) of the Act, an Independent Board Member shall not be liable to the Company, the Members or any other Person bound by this Agreement for breach of contract or breach of duties (including fiduciary duties), unless the Independent Board Member acted in bad faith or engaged in willful misconduct.  All right, power and authority of the Independent Board Member shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in this Agreement.  Notwithstanding any other provision of this Agreement to the contrary, each Independent Board Member, in its capacity as an Independent Board Member, may only act, vote or otherwise participate in those matters referred to in Section 6.4(b) or as otherwise specifically required by this Agreement.
Section 6.12    Reliance by Third Parties.      Notwithstanding any other provision of this Agreement, any contract, instrument or action on behalf of the Company by (a) a Board Member, or (b) an officer or any other Person delegated by Board Approval, shall be conclusive evidence in favor of any third party dealing with the Company that such Person has the authority, power and right to execute and deliver such contract or instrument and to take such action on behalf of the Company.  This Section 6.12 shall not be deemed to limit the liabilities and obligations of such Person to seek Board Approval as set forth in this Agreement.
Section 6.13    Allocation of Investment Opportunities.  NMFC  shall adopt and make available to SkyKnight an investment allocation policy (including any subsequent material amendments thereto) as is typical and customary for such policies; provided, that NMFC’s investment adviser, in lieu of NMFC, may fulfill its obligation under this Section 6.13.
Section 6.14    Indemnification; Exculpation.    
(a)    Subject to the limitations and conditions as provided in this Section 6.14, each director, manager, officer, representative and agent of the Company or any of its Subsidiaries, each Board Member, each Member and their respective employees, directors, managers, officers, owners, principals, shareholders, members, partners, representatives and agents (each, an “Indemnified Person”) who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or arbitrative or in the nature of an alternative dispute resolution in lieu of any of the foregoing (other than any of the foregoing between the two Members, hereinafter a “Proceeding”), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that such Indemnified Person (i) is or was a director, manager, officer, 

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representative or agent (as applicable) of the Company or any of its Subsidiaries, a Board Member, a Member or any of their respective employees, directors, managers, officers, owners, principals, shareholders, members, partners, representatives or agents, and (ii) is or was performing any duty or obligation or exercising any right arising out of or in connection with under this Agreement or the Administrative Services Agreement, shall be indemnified by the Company to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such applicable law permitted the Company to provide prior to such amendment) against all liabilities and expenses (including, without limitation, judgments, penalties (including, without limitation, excise and similar taxes and punitive damages), losses, fines, settlements and reasonable expenses (including, without limitation, reasonable attorneys’ and experts’ fees and expenses)) actually incurred by such Indemnified Person in connection with such Proceeding, appeal, inquiry or investigation (each, a “Harm”), unless such Harm shall have been fully adjudicated to constitute gross negligence, fraud, bad faith, reckless disregard of its duties or intentional misconduct, the breach of any material provision of this Agreement or the Administrative Services Agreement or conduct that is the subject of a criminal proceeding (where the Indemnified Person has a reasonable cause to believe that such conduct was unlawful) by the Indemnified Person seeking indemnification hereunder, in which case such indemnification shall not cover such Harm to the extent resulting from such gross negligence, fraud, bad faith, reckless disregard of its duties or intentional misconduct, the breach of any material provision of this Agreement or the Administrative Services Agreement or conduct that is the subject of a criminal proceeding (where the Indemnified Person has a reasonable cause to believe that such conduct was unlawful).  Indemnification under this Section 6.14 shall continue as to an Indemnified Person who has ceased to serve in the capacity which initially entitled such Indemnified Person to indemnity hereunder.  The rights granted pursuant to this Section 6.14 shall be deemed contract rights, and no amendment, modification or repeal of this Section 6.14 shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings, appeals, inquiries or investigations arising prior to any amendment, modification or repeal.  To the fullest extent permitted by law, no individual entitled to indemnification under this Section 6.14 shall be liable to the Company or any Member for any act or omission performed or omitted by or on behalf of the Company; provided that such act or omission has not been fully adjudicated to constitute gross negligence, fraud, bad faith, reckless disregard of its duties or intentional misconduct, the breach of any material provision of this Agreement or the Administrative Services Agreement or conduct that is the subject of a criminal proceeding (where such individual had a reasonable cause to believe that such conduct was unlawful).  In addition, any Indemnified Person entitled to indemnification under this Section 6.14 may consult with legal counsel selected with reasonable care and shall incur no liability to the Company or any Member to the extent that such Indemnified Person acted or refrained from acting in good faith in reliance upon the opinion or advice of such counsel and such Indemnified Person provided such counsel all material facts.
(b)    The right to indemnification conferred in Section 6.14(a) shall include the right to be paid or reimbursed by the Company for the reasonable expenses incurred by an Indemnified Person entitled to be indemnified under Section 6.14(a) who was, is or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the Indemnified Person’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such Indemnified Person in advance of the final disposition of a Proceeding shall be made only upon delivery to the Company of a written undertaking by such Indemnified Person to repay all amounts so advanced if it shall be 

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finally adjudicated that such Indemnified Person is not entitled to be indemnified under this Section 6.14 or otherwise.
(c)    The right to indemnification and the advancement and payment of expenses conferred in this Section 6.14 shall not be exclusive of any other right that a Member or other Indemnified Person indemnified pursuant to this Section 6.14 may have or hereafter acquire under any law (common or statutory) or provision of this Agreement.
(d)    The indemnification rights provided by this Section 6.14 shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of each Indemnified Person indemnified pursuant to this Section 6.14.
(e)    In furtherance of this Section 6.14, the Company acknowledges that certain Indemnified Persons entitled to indemnification under this Section 6.14 may have rights to indemnification, advancement of expenses and/or insurance provided by Persons other than the Company (collectively, the “Outside Indemnitors”).  The Company hereby agrees (i) that it (and any of its insurers) is the indemnitor of first resort (i.e., its obligations to such Indemnified Persons under this Section 6.14 are primary, and any obligation of the Outside Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Indemnified Persons are secondary), (ii) that the Company (and any of its insurers) shall be required to advance the full amount of expenses incurred by such Indemnified Persons and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement (or any other agreement between the Company and such Indemnified Persons), without regard to any rights such Indemnified Persons may have against the respective Outside Indemnitors, and (iii) that the Company irrevocably waives, relinquishes and releases the Outside Indemnitors from any and all claims against the Outside Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Outside Indemnitors on behalf of any such Indemnified Person with respect to any claim for which such Indemnified Person has sought indemnification from the Company (or any of its insurers) shall affect the foregoing, and the Outside Indemnitors shall have a right of contribution and/or be subrogated to the extent of any such advancement or payment to all of the rights of recovery of such Indemnified Person against the Company (and any of its insurers).  Notwithstanding the foregoing, to the extent that a Member or any Indemnified Person who is such Member’s employee, director, manager, officer, owner, principal, shareholder, member, partner, representative or agent has received indemnification or advancement of expenses for a Harm from an Outside Indemnitor, the Members agree that such Member shall return (and shall use reasonable efforts to cause any such Indemnified Person to return) any indemnification or advancement of expenses received from the Company (or any of its insurers) with respect to the same Harm.  The Company agrees that the Outside Indemnitors are express third-party beneficiaries of the terms of this Section 6.14(e).
(f)    Notwithstanding the foregoing provisions, any amounts payable by the Company as a result of the indemnification set forth herein shall only be payable to the extent amounts are available therefor pursuant to the terms of the Loan and Security Agreement and, to the fullest extent permitted by law, shall not constitute a claim against the Company in the event that the Company’s cash flow is insufficient to pay all its obligations to the lenders under the Loan and Security Agreement. 

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Section 6.15    Tax Matters Member.      NMFC shall be the “tax matters partner” of the Company within the meaning of Section 6231(a)(7) of the Code , and NMFC (or such Person as may be designated by NMFC in its sole discretion) shall be designated, in the manner prescribed by applicable law, as the partnership representative authorized to act on behalf of the Company in respect of Company audits relating to tax returns filed for taxable years beginning after 2017 (NMFC and/or such other person, the “Tax Matters Member”).  The provisions of Section 6.14 shall apply to all actions taken on behalf of the Members by the Tax Matters Member in its capacity as such.  The Tax Matters Member shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the tax matters partner of the Company.  The Tax Matters Member shall have the right to retain professional assistance in respect of any audit of the Company and all reasonable, documented out-of-pocket expenses and fees incurred by the Tax Matters Member on behalf of the Company as Tax Matters Member shall be reimbursed by the Company.  In the event the Tax Matters Member receives notice of a final Company adjustment under Section 6223(a) of the Code, it shall either (a) file a court petition for judicial review of such final adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition shall be mailed to all Members on the date such petition is filed, or (b) mail a written notice to all Members within such period that describes its reasons for determining not to file such a petition.  Each Member shall be a “notice partner” within the meaning of Section 6231(a)(8) of the Code.  For the avoidance of doubt, the Tax Matters Member shall not take any action prior to Board Approval for same being obtained.
ARTICLE 7
TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS

Section 7.1    Transfers by Members.    
(a)    No Member shall transfer, assign, pledge or otherwise hypothecate its interest without Board Approval (which approval shall not be unreasonably withheld). In addition, if a Member is excepted from the definition of an “investment company” (as that term is defined in the Investment Company Act) pursuant to Section 3(c)(1) or Section 3(c)(7) thereof, such Member shall not permit any investor in such Member to transfer, assign, pledge or otherwise hypothecate such investor's interest in such Member without Board Approval (which approval shall not be unreasonably withheld). Notwithstanding anything in this Section 7.1(a) to the contrary, to the extent not prohibited by the terms of any Facility, each Member may pledge, assign or hypothecate its interest to senior credit facility provider for such Member in compliance with all applicable securities laws with prior written notice to each other Member.  In addition, other than in accordance with the preceding sentence, the interest of a Member may not be assigned without first offering the other Member a right of first refusal to purchase the interest as set forth in Section 7.1(f).  Notwithstanding the foregoing or any other provision contained herein to the contrary, without Board Approval or the offering of such right of first refusal, SkyKnight or NMFC in its capacity as an initial Member may assign its entire interest to an Affiliate of such Member (which may be reassigned in whole but not in part to one or more additional Affiliates of such Member) with prior written notice to each other Member, if SkyKnight or NMFC (as applicable) in its capacity as the assignor remains liable for its Capital Commitment.  No assignment by a Member shall be binding upon the Company until the Company receives an executed copy of such assignment, which shall be in form and substance reasonably satisfactory to the other Member, and any assignment pursuant to this Section 7.1(a) shall be subject to satisfaction of the conditions set forth in Section 7.1(e).
(b)    Any Person which acquires a Company interest by assignment in accordance with the provisions of this Agreement shall be admitted as a substitute Member only upon approval of 

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the non-transferring Member.  The admission of an assignee as a substitute Member shall be conditioned upon the assignee’s written assumption, in form and substance satisfactory to the other Member, of all obligations of the assignor in respect of the assigned interest and execution of an instrument reasonably satisfactory to the other Member whereby such assignee becomes a party to this Agreement.
(c)    In the event any Member shall be adjudicated as bankrupt, or in the event of the winding-up or liquidation of a Member, the legal representative of such Member shall, upon written notice to the other Member of the happening of any of such events and satisfaction of the conditions set forth in Section 7.1(e), become an assignee of such Member’s interest, subject to all of the terms of this Agreement as then in effect.
(d)    Any assignee of the interest of a Member, irrespective of whether such assignee has accepted and adopted in writing the terms and provisions of this Agreement, shall be deemed by the acceptance of such assignment to have agreed to be subject to the terms and provisions of this Agreement in the same manner as its assignor.
(e)    As additional conditions to the validity of any assignment of a Member’s interest, such assignment shall not:
(i)    cause the securities issued by the Company to be required to be registered under the registration provisions of the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction;
(ii)    cause the Company to cease to be entitled to the exemption from the definition of an “investment company” pursuant to Section 3(c)(7) of the Investment Company Act and the rules and regulations of the SEC thereunder;
(iii)    unless the other Member waives in writing the application of this clause (iii) with respect to such assignment (which the other Member may refuse to do in its absolute discretion), be to a Person which is an ERISA Plan;
(iv)    cause the Company or the other Member to be in violation of, or effect an assignment to a Person that is in violation of, applicable Investor Laws; or
(v)    cause the Company to be treated as a publicly traded partnership taxable as a corporation for federal tax purposes.
The non-assigning Member may require reasonable evidence as to the foregoing, including, without limitation, an opinion of counsel reasonably acceptable to the non-assigning Member.  Any purported assignment as to which the conditions set forth in the foregoing clauses (i) through (iv) are not satisfied shall be void ab initio.  An assigning Member shall be responsible for all costs and expenses incurred by the Company, including, without limitation, reasonable legal fees and expenses, in connection with any assignment or proposed assignment.
(f)    Each Member hereby unconditionally and irrevocably grants to the other Member or its designee a right of first refusal to purchase all, but not less than all, of any interest in the Company that such assigning Member may propose to assign to another Person, at the same price and on the same terms and conditions as those offered to the prospective assignee.  Each Member 

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proposing to make an assignment that is subject to this Section 7.1(f) must deliver a notice to the other Member not later than thirty (30) days prior to the proposed closing date of such assignment.  Such notice shall contain the material terms and conditions (including, without limitation, price and form of consideration) of the proposed assignment and the identity of the prospective assignee.  To exercise its right of first refusal under this Section 7.1(f), the other Member must deliver a notice to the selling Member within fifteen (15) days of receipt of such notice, stating that it elects to exercise its right of first refusal and, if applicable, providing the identity of any Person(s) (including third parties unaffiliated with the exercising Member) that the non-assigning Member designates as the purchaser(s).
(g)    Notwithstanding anything in this Agreement to the contrary, each Member acknowledges and agrees that in the event such Member is entitled to transfer its interest in the Company, prior to the effectiveness of such transfer, such Member shall be obligated to take such actions as are required to satisfy any restrictions on such transfer under any Facility (e.g., funding such Capital Contributions as may be required under the terms of a Facility as a result of such transfer; provided that in no event shall any amounts funded by such Member exceed the remaining amount of its uncalled Capital Commitment).
Section 7.2    Withdrawal by Members.     Members may withdraw from the Company only with Board Approval.
ARTICLE 8
TERM, DISSOLUTION AND LIQUIDATION OF COMPANY

Section 8.1    Term.      Except as provided in Section 8.2, the Company shall continue until  two (2) years after the end of the Investment Period.
Section 8.2    Dissolution.    
(a)    Subject to Section 8.2(b), the Company shall be dissolved and its affairs wound up upon the occurrence of the earliest of:
(i)    the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining Member of the Company in the Company, unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act, 
(ii)    the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act; and 
(iii)    the distribution of all assets of the Company.  
(b)    Notwithstanding Section 8.2(a), and subject to applicable law, the Company shall not be required to wind up, dissolve or terminate if any such action would cause the Company or any Subsidiary to violate any law or contract applicable to any such Person. Without limiting the foregoing, prior to termination of the Loan and Security Agreement in accordance with is terms, upon the occurrence of any event that causes the last remaining Member to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon (i) a permitted assignment by such Member of all of its limited liability company interests in the Company 

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and the admission of the transferee pursuant to the terms of this Agreement or (ii) the removal and replacement of such Member pursuant to the terms of this Agreement), the Independent Board Member shall, without any action of any Person and simultaneously with the last remaining Member ceasing to be a member of the Company, automatically be admitted to the Company as the Special Member (the “Special Member”) and shall continue the Company without dissolution.  The Special Member may not resign from the Company or transfer its rights as the Special Member unless (i) a successor Special Member has been admitted, with the consent of the Special Member, to the Company as Special Member by executing a counterpart to this Agreement, and (ii) such successor has also accepted its appointment by the Special Member as an Independent Board Member pursuant to Section 6.2(a); provided, however, the Special Member shall automatically cease to be a member (but not an Independent Board Member) of the Company upon the admission to the Company of a substitute managing member elected by the Special Member.  The Special Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets.  Pursuant to Section 18-301 of the Act, the Special Member shall not be required to make any capital contributions to the Company and shall not have any limited liability company interest in the Company.  The Special Member, in its capacity as the Special Member, may not bind the Company.  Except as required by any mandatory provision of the Act (and other than with respect to the admission of a substitute Member or successor Special Member and the appointment of an Independent Board Member pursuant to Section 6.2(a)), the Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including, without limitation, the merger, consolidation or conversion of the Company.  In order to implement the admission to the Company of the Special Member, the person acting as an Independent Board Member pursuant to Section 6.2(a) shall execute a counterpart to this Agreement.  Prior to its admission to the Company as the Special Member, the person acting as an Independent Board Member pursuant to Section 6.2(a) shall not be a member of the Company.  By signing this Agreement, the Independent Board Member agrees that should the Independent Board Member become a Special Member [s]he shall be subject to and bound by the provisions of this Agreement applicable to the Special Member.
(c)    Notwithstanding any other provision of this Agreement, the bankruptcy, insolvency, dissolution or liquidation of a Member or Special Member shall not cause (i) the Company to be dissolved or its affairs to be wound up, or (ii) such Member or Special Member, respectively, to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.
(d)    Notwithstanding any other provision of this Agreement, each Member and the Special Member waives any right it might have to agree in writing to dissolve the Company upon the bankruptcy, insolvency, dissolution or liquidation of any Member or Special Member or the occurrence of an event that causes any Member or Special Member to cease to be a member of the Company.
Section 8.3    Wind-Up.    
(a)    Upon the dissolution of the Company, the Company shall be liquidated in accordance with this Article 8 and the Act.  The liquidation shall be conducted and supervised by the Board in the same manner provided by Article 6 with respect to the operation of the Company during its term. 
(b)    From and after the date on which an event set forth in Section 8.2(a) becomes effective, the Company shall cease to enter into or make Investments after that date, except for 

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Investments permitted pursuant to clauses (ii) through (v) of Valid Company Purposes.  Capital calls against the Capital Commitment of the Members shall cease from and after such effective date; provided that capital calls against the Capital Commitments of the Members may continue to fund all items in clauses (ii) through (vi) of Valid Company Purposes.  Subject to the foregoing, the Members shall continue to bear an allocable share of Expenses, indemnification amounts payable under this Agreement and other obligations of the Company until all Investments in which the Company participates (including through any applicable Subsidiaries) are repaid or otherwise disposed of.
(c)    Distributions to the Members during the winding-up of the Company shall be made no less frequently than quarterly to the extent consisting of a Member’s allocable share of cash and cash equivalents, after taking into account reasonable reserves deemed appropriate by Board Approval to fund (i) Investments in which the Company continues to participate, (ii) Expenses, (iii) indemnification amounts payable under this Agreement, and (iv) all other obligations (including, without limitation, contingent obligations) of the Company (each as set forth in the immediately preceding paragraph).  Unless waived by Board Approval, the Company also shall withhold ten percent (10%) of distributions in any calendar year during the winding-up of the Company, which withheld amount shall be distributed within sixty (60) days after the completion of the annual audit covering such year; provided that distributions of any withheld amounts shall be reduced by any amounts owed by a Member as may be revealed upon the completion of such annual audit. Except as otherwise provided herein, a Member shall remain a member of the Company until all Investments in which the Company participates are repaid or otherwise disposed of, all equity interests of the Company in each Subsidiary are redeemed or such Subsidiary is dissolved, the Member’s allocable share of all Expenses, indemnification amounts payable under this Agreement, and all other obligations (including, without limitation, contingent obligations) of the Company are paid, and all distributions are made hereunder, at which time the Member shall have no further rights under this Agreement.  Notwithstanding the foregoing, in case of the dissolution and winding-up of the Company, and subject to this Section 8.3, distributions may be made in-kind, or a combination of cash and assets (including any debt or equity held by the Company in any Subsidiary), as the Board or liquidating agent may select in its sole and absolute discretion; provided that any distribution-in-kind shall not cause a breach by the Company or any Subsidiary of any applicable law or contract.  In the event of any distributions in-kind, the assets to be distributed will be valued pursuant to the valuation procedures set forth herein.
(d)    Upon dissolution of the Company, final allocations of all items of Company Profit and Loss shall be made in accordance with Section 4.2.  Upon dissolution of the Company, the assets of the Company shall be applied and paid in the following order of priority:
(i)    To creditors (other than Members) in satisfaction of liabilities of the Company (whether by payment or by the making of reasonable provision for payment thereof), including, without limitation, to establish any reasonable reserves which the Board may, in its reasonable judgment, deem necessary or advisable for any contingent, conditional or unmatured liability of the Company and to establish any reasonable reserves with respect to amounts the Company may pay or contribute in connection with Subsidiaries;
(ii)    To establish any reserves which the Board may, in its reasonable judgment, deem necessary or advisable for any contingent, conditional or unmatured liability of the Company to Members;

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(iii)    To the liquidating agent to cover reasonable expenses incurred in connection with the dissolution of the Company; and
(iv)    The balance, if any, to the Members in proportion to Section 5.1(a)(iii),Section 5.1(a)(iv), Section 5.1(a)(v) and Section 5.1(a)(vii).
(e)    Notwithstanding the foregoing, and to the extent not prohibited by the terms of any Facility, (i) upon the withdrawal of a Member, the non-withdrawing Member shall have the right to purchase all of the other Member’s interest in the Company by providing written notice to the other Member within thirty (30) days following the action that triggered the commencement of the dissolution procedures stating that it elects to exercise its right of purchase and, if applicable, providing the identity of any Person(s) (including third parties unaffiliated with the exercising Member) that the exercising Member designates as the purchaser(s).  The purchase price for such interest shall be payable in cash within ninety (90) days after the election to purchase is delivered to the other Member, and shall be equal to the Capital Account of the other Member adjusted to reflect the Value of the Company as determined as of the date of the last valuation pursuant to Section 9.4.  After such purchase, the other Member shall no longer be a member of the Company, and the Member that has elected to purchase the other Member’s interest may dissolve or continue the Company as it may determine.
(f)    In the event that an audit or reconciliation relating to the fiscal year in which a Member receives a distribution under this Section 8.3 reveals that such Member received a distribution in excess of that to which such Member was entitled, the Company or the other Member may, in its discretion, seek repayment of such distribution to the extent that such distribution exceeded what was due to such Member.
(g)    Each Member shall be furnished with a statement prepared by the Company’s accountant, which shall set forth the assets and liabilities of the Company as at the date of complete liquidation, and each Member’s share thereof.  Upon compliance with the distribution plan set forth in this Section 8.3, the Members shall cease to be such, and either Member may execute, acknowledge and cause to be filed a certificate of cancellation of the Company.
ARTICLE 9
ACCOUNTING, REPORTING AND VALUATION PROVISIONS

Section 9.1    Books and Accounts.    
(a)    Complete and accurate books and accounts shall be kept and maintained for the Company at its principal office.  Such books and accounts shall be kept on the accrual basis method of accounting and shall include separate Capital Accounts for each Member.  Capital Accounts for financial reporting purposes and for purposes of this Agreement shall be maintained in accordance with Section 4.1, and for U.S. federal income tax purposes the Board shall cause the Administrative Agent to maintain the Members’ Capital Accounts in accordance with the Code and applicable Treasury Regulations and subject to instructions from the Board.  Each Member or its duly authorized representative, at its own expense, shall at all reasonable times and upon reasonable prior written notice to the Administrative Agent have access to, and may inspect, such books and accounts and any other records of the Company for any purpose reasonably related to its interest in the Company.

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(b)    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts or with such custodian, and assets owned by the Company may be deposited with such custodian, as may be designated by Board Approval from time to time and withdrawals therefrom shall be made upon such signature or signatures on behalf of the Company as may be designated by Board Approval from time to time.
Section 9.2    Financial Reports; Tax Return.    
(a)    The Company shall engage an independent certified public accountant selected by the Administrative Agent and approved by Board Approval, which approval shall not be unreasonably withheld, to act as the accountant for the Company and to audit the Company’s books and accounts as of the end of each fiscal year, commencing for the 2016 fiscal year.  As soon as practicable, but no later than ninety (90) days, after the end of such fiscal year, pursuant to the Administrative Services Agreement, the Board shall cause the Administrative Agent to deliver, by any of the methods described in Section 10.8, to each Member and to each former Member who withdrew during such fiscal year:
(i)    audited financial statements of the Company as at the end of and for such fiscal year, including a balance sheet and statement of income, together with the report thereon of the Company’s independent certified public accountant, which annual financial statements shall be approved by Board Approval;
(ii)    a statement of holdings of assets of the Company, including both the cost and the valuation of such assets as determined pursuant to Section 9.4, and a statement of such Member’s Capital Account;
(iii)    to the extent that the requisite information is then available, a Schedule K-1 for such Member with respect to such fiscal year, prepared in accordance with the Code, together with corresponding forms for state income tax purposes, setting forth such Member’s distributive share of Company items of Profit or Loss for such fiscal year and the amount of such Member’s Capital Account at the end of such fiscal year; and
(iv)    such other financial information and documents respecting the Company and its business as the Administrative Agent deems appropriate, or as a Member may reasonably require and request, to enable such Member to monitor and evaluate its interest in the Company, to comply with regulatory requirements applicable to it or to prepare its federal and state income tax returns.
(b)    Pursuant to the Administrative Services Agreement, the Board shall cause the Administrative Agent to prepare and timely file after the end of each fiscal year of the Company all income tax returns of the Company for such fiscal year.
(c)    Pursuant to the Administrative Services Agreement, as soon as practicable, but in no event later than sixty (60) days, after the end of each of the first three fiscal quarters of a fiscal year, the Board shall cause the Administrative Agent to prepare and deliver, by any of the methods described in Section 10.8, to each Member (i) unaudited financial information (including the Company’s balance sheet and statement of income and each Member’s Capital Account as of the beginning and end of the related reporting period) with respect to such Member’s allocable share of Profit or Loss and changes to its Capital Account as of the end of such fiscal quarter and for the 

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portion of the fiscal year then ended, (ii) a statement of holdings of assets of the Company as to which such Member participates, including both the cost and the valuation of such assets as determined pursuant to Section 9.4, and (iii) such other financial information as the Administrative Agent deems appropriate, or as a Member may reasonably require and request, to enable such Member to monitor and evaluate its interest in the Company or to comply with regulatory requirements applicable to it.
(d)    Pursuant to the Administrative Services Agreement, as soon as practicable, but, subject to the availability of required information, the Board shall cause the Administrative Agent to prepare and deliver, by any of the methods described in Section 10.8, to each Member (i) no later than fifteen (15) days after the end of each calendar month, monthly investment information consisting of a list of each Investment held by the Company, any Subsidiary and any Alternative Investment Vehicle, together with the amount held, investment yield, current rating (if the Administrative Agent has such information in its possession), maturity, coupon, purchase price and current price of each such Investment as of the end of such month, and (ii) such other information as the Administrative Agent deems appropriate, or as a Member may reasonably require and request, to enable such Member to monitor and evaluate its interest in the Company or to comply with regulatory requirements applicable to it.
Section 9.3    Confidentiality.    
(a)    Each Member agrees to maintain the confidentiality of all records, reports and affairs of the Company (including relating to any Subsidiary or Alternative Investment Vehicle), and all information and materials furnished to such Member by the Company, any Subsidiary, any other Member, NMFC’s investment adviser, SkyKnight’s investment adviser, the Administrative Agent or any of their respective Affiliates with respect to their respective businesses and activities; each Member agrees not to provide to any other Person copies of any financial statements, tax returns or other records or reports, or other information or materials, provided or made available to such Member; and each Member agrees not to disclose to any other Person any information contained therein (including any information respecting Portfolio Companies), without the express prior written consent of the Member that is the non-disclosing party or, if the Company is the disclosing party, each of the other Members; provided that each Member may disclose (xi) any such information to its investment adviser and investment sub-adviser, or as such Member reasonably believes may be required in connection with the filing of its Registration Statement on Form N-2 or other SEC filings and any periodic reports under the Securities Exchange Act of 1934, as amended, (xii) with Board Approval, the names of borrowers of loans and other investments held by the Company, directly or indirectly through a Subsidiary or otherwise, and summaries of such loan transactions and other investments in any marketing materials (including tombstone ads) in connection with the publication in the ordinary course of business of marketing and investor relation documents and communications by such Member or its Affiliates, (xiii) in any press release or other similar public statements that concerns the Company and/or the subject matter of this Agreement and is approved by Board Approval; and (xiv) aggregate quarterly or annual portfolio performance metrics relating to prior periods at least 90 days after completion of such periods; provided, further, that any Member may provide financial statements, tax returns and other information contained therein (I) to its Affiliates and the accountants, internal and external auditors, legal counsel, financial advisors and other fiduciaries and representatives (who may be Affiliates of such Member) of such Member and its Affiliates as long as such Member or its Affiliates instructs such Persons to maintain the confidentiality thereof and not to disclose to any other Person any information contained therein (in each instance, to the same extent and subject to the terms and conditions set forth in this Section 

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9.3); (II) to potential transferees of such Member’s Company interest that agree in writing, for the benefit of the Company, to maintain the confidentiality thereof, but only after reasonable advance notice to the Company; (III) if and to the extent required by law (including judicial or administrative order); provided that, to the extent legally permissible, the Company is given prior notice to enable it to seek a protective order or similar relief; (IV) to representatives of any governmental regulatory agency or authority with jurisdiction over such Member or any of its Affiliates, or as otherwise may be necessary to comply with regulatory requirements applicable to such Member or any of its Affiliates; (V) as required or advisable to obtain financing directly or indirectly by the Company or by a Subsidiary or by the Member or as required or permitted to be disclosed under any related offering or transaction documents; and (VI) in order to enforce rights under this Agreement.  Notwithstanding the foregoing, the following shall not be considered confidential information for purposes of this Agreement: (1) information that is publicly available; (2) information obtained by a Member from a third party who is not prohibited from disclosing the information; (3) information in the possession of a Member prior to its disclosure by the Company, a Subsidiary, another Member, NMFC’s investment adviser, NMFC’s investment sub-adviser, SkyKnight’s investment adviser, SkyKnight’s investment sub-adviser, the Administrative Agent or any of their respective Affiliates; or (4) information which a Member can show by written documentation was developed independently of disclosure by the Company, a Subsidiary, another Member, NMFC’s investment adviser, NMFC’s investment sub-adviser, SkyKnight’s investment adviser, SkyKnight’s investment sub-adviser, the Administrative Agent or any of their respective Affiliates.  Without limitation to the foregoing, no Member shall engage in the purchase, sale or other trading of securities or derivatives thereof based upon confidential information received from the Company, a Subsidiary, another Member, NMFC’s investment adviser, SkyKnight’s investment adviser, the Administrative Agent or any of their respective Affiliates.
(b)     Each Member: (i) acknowledges that the Company, another Member, NMFC’s investment adviser, SkyKnight’s investment adviser, the Administrative Agent, each of their respective Affiliates, and their respective direct or indirect members, managers, officers, directors and employees are expected to acquire confidential third-party information (e.g., through Portfolio Company directorships held by such Persons or otherwise) that, pursuant to fiduciary, contractual, legal or similar obligations, cannot be disclosed to the Company or the Member; and (ii) agrees that none of such Persons shall be in breach of any duty under this Agreement or the Act as a result of acquiring, holding or failing to disclose such information to the Company or the Members.
(c)    In the event of unauthorized disclosure of confidential information described in Section 9.3(a), the disclosing Member will promptly notify the other Members in writing and provide full details of any unauthorized possession, use or disclosure of such information by any person or entity that may become known to the disclosing Member.  The disclosing Member promptly shall use commercially reasonable efforts to prevent a recurrence of any such unauthorized possession, use or disclosure of confidential information.
(d)    Each Member acknowledges and is aware of federal securities laws applicable to such Member that generally prohibit the purchase and sale of securities on the basis of material non-public information with respect to Investments.

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Section 9.4     Valuation.      
(a)    Valuations of the Company as well as each of the Company’s assets and liabilities (including the assets and liabilities of each Subsidiary and each Alternative Investment Vehicle) shall be made as of the end of each fiscal quarter and upon liquidation of the Company pursuant to Section 8.3 in accordance with the following provisions and the Company’s valuation guidelines adopted by Board Approval and then in effect; provided that the valuation of all liabilities shall be determined only in accordance with Section 9.4(a)(iv).
(i)    Within fifteen (15) days after the date as of which a valuation is to be made (unless such valuation date is a fiscal year-end date, in which case, within thirty (30) days after the date as of which a valuation is to be made), pursuant to policies adopted by Board Approval, the Administrative Agent shall deliver to the Board a report as to the recommended valuation as of such date, and provide the Board (and each Member) with a reasonable opportunity to request information and to provide comments with respect to the report.
(ii)    If the recommended valuation as of such date is approved by Board Approval, then the valuation that has been approved shall be final.
(iii)    If there is an objection to the recommended valuation by any Member within the fifteen (15) day period following Administrative Agent’s delivery of the recommended valuation to the Board (and each Member), then, unless such objection is timely resolved, the Administrative Agent shall (A) provide an Approved Valuation Expert with separate explanations of the unresolved objection(s) (one written by the Administrative Agent and setting forth the Administrative Agent’s valuation or range of valuation for each asset and/or liability that is the subject of an unresolved objection, and the other written by the objecting Member and setting forth the objecting Member’s valuation or range of valuation for each such asset and/or liability), and (B) request such Approved Valuation Expert to resolve each outstanding objection by choosing either the related valuation or range of valuation set forth in the Administrative Agent’s explanation or the related valuation or range of valuation set forth in the objecting Member’s explanation, within thirty (30) days after the date as of which a valuation is to be made (unless such valuation date is a fiscal year-end date, in which case, within forty-five (45) days after the date as of which a valuation is to be made), and the Approved Valuation Expert’s determination shall be binding on the Company, the Members, and the Administrative Agent, and (C) determine a final valuation of the Company as well as each of the Company’s assets and liabilities (and for each asset that was the subject of an unresolved objection, consistent with the valuation as of such date resolved by the Approved Valuation Expert), and such final valuation shall be final and binding on the Company and the Members.  For this purpose, a valuation of an asset or liability as of such date shall be considered consistent with a valuation of an Approved Valuation Expert if it is equal to the recommended value or within the recommended range of values determined by the Approved Valuation Expert as of such date.  An “Approved Valuation Expert” shall mean an independent valuation consultant that has been unanimously approved by all Members.
(iv)    Notwithstanding the terms of foregoing provisions of this Section 9.4, liabilities of the Company, each Subsidiary and each Alternative Investment Vehicle shall be taken into account at the amounts at which they are carried on the books of the Company, each Subsidiary and each Alternative Investment Vehicle, as the case may be, and provision 

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shall be made in accordance with GAAP for contingent or other liabilities not reflected on such books and, in the case of the liquidation of the Company, for the expenses (to be borne by the Company) of the liquidation and winding-up of the Company’s affairs.
(v)    No value shall be assigned to the business name and goodwill or to the office records, files, statistical data, or any similar intangible assets of the Company, each Subsidiary and each Alternative Investment Vehicle not normally reflected in the accounting records of the Company, each Subsidiary and each Alternative Investment Vehicle, as the case may be.
(b)    All valuations shall be made in accordance with the foregoing and shall be final and binding on all Members, absent actual and apparent error.  Valuations of the Company’s assets by independent valuation consultants shall be at the Company’s expense.  The fees, costs and expenses incurred in connection with valuations of the Company’s assets shall be Expenses for purposes of this Agreement.
ARTICLE 10
MISCELLANEOUS PROVISIONS

Section 10.1    Power of Attorney.    
(a)    Each Member irrevocably constitutes and appoints the Administrative Agent as the true and lawful attorney-in-fact of such Member to execute, acknowledge, swear to and file any of the following:
(i)    Any certificate or other instrument (A) which may be required to be filed by the Company under the laws of the United States, the State of Delaware, or any other jurisdiction, or (B) which the Administrative Agent shall file in connection with a Valid Company Purpose; provided that no such certificate or instrument shall have the effect of amending this Agreement or the Administrative Services Agreement other than as expressly permitted hereby;
(ii)    Any amendment or modification of any certificate or other instrument referred to in this Section 10.1; and
(iii)    Any agreement, document, certificate or other instrument which any Member is required to execute in connection with the termination of such Member’s interest in the Company and the withdrawal of such Member from the Company, or in connection with the reduction of such Member’s interest in the Company, which such Member has failed to execute and deliver within ten (10) Business Days after written request by the Administrative Agent.
It is expressly acknowledged by each Member that the foregoing power of attorney is coupled with an interest and shall survive death, legal incapacity and assignment by such Member of its interest in the Company; provided, however, that if a Member shall assign all of its interest in the Company and the assignee shall, in accordance with the provisions of this Agreement, become a substitute Member, such power of attorney shall survive such assignment only for the purpose of enabling 

35

        

each attorney-in-fact to execute, acknowledge, swear to and file any and all instruments necessary to effect such substitution.
(b)    Each Member agrees to execute, upon five (5) Business Days’ prior written notice, a confirmatory or special power of attorney, containing the substantive provisions of this Section 10.1, in form reasonably satisfactory to the Administrative Agent.
Section 10.2    Determination of Disputes.      Any dispute or controversy among the Members arising out of or in connection with (a) this Agreement or any amendment to this Agreement, (b) the breach or alleged breach of this Agreement, (c) the actions of any of the Members (in or relating to their capacity as a member of the Company), or (d) the formation, operation or dissolution and liquidation of the Company or any Alternative Investment Vehicle or any Subsidiary, shall be settled by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules.  The place of arbitration shall be New York, New York.  The number of arbitrators shall be three.  The language of the arbitration shall be English.  Any award of the arbitrators shall be final and binding upon the Members, the Company, any Alternative Investment Vehicle and any Subsidiary, and judgment upon any such award may be entered in any court having jurisdiction thereof.  The party or parties against whom an award is made shall bear its or their own expenses and those of the prevailing party or parties, including, without limitation, fees and disbursements of attorneys, accountants, and financial experts, and shall bear all arbitration fees and expenses of the arbitrators.
Section 10.3    Certificate of Formation; Other Documents.      The Members hereby approve and ratify the filing of the Certificate of Formation on behalf of the Company.  The Members agree to execute such other instruments and documents as may be required by law or which the Board deems (or any Member reasonably deems) necessary or appropriate to carry out the intent of this Agreement.  Each Member further agrees to deliver, if requested by the Company for provision to a third-party lender, (a) its most recent financials; (b) a certificate confirming the remaining amount of its uncalled Capital Commitment; and (c)  such other instruments as the Company or a lender may reasonably require in order to effect any borrowings by the Company or any of its Subsidiaries or Portfolio Companies.
Section 10.4    Force Majeure.      Whenever any act or thing is required of the Company or a Member hereunder to be done within any specified period of time, the Company and the Member shall be entitled to such additional period of time to do such act or thing as shall equal any period of delay resulting from causes beyond the reasonable control of the Company or the Member, including, without limitation, bank holidays and actions of governmental agencies, and excluding, without limitation, economic hardship; provided that this provision shall not have the effect of relieving the Company or the Member from the obligation to perform any such act or thing.
Section 10.5    Notice of Litigation or Regulatory.     Each Member promptly shall notify the other Members in writing in the event that the Member or an Affiliate of the Member is involved in any litigation or regulatory enforcement proceedings, or reasonably anticipates that it may become involved in any litigation or regulatory enforcement proceedings.  After initial notice, such Member promptly shall notify the other Members in writing of any material developments related to the litigation or regulatory enforcement proceedings.

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Section 10.6    Applicable Law.      This Agreement shall be governed by, and construed in accordance with, the internal law of the State of Delaware, without regard to the principles of conflicts of laws thereof, to the extent such principles would require or permit the application of the laws of another jurisdiction.
Section 10.7    Waivers.    
(a)    No waiver of the provisions hereof shall be valid unless in writing and then only to the extent therein set forth.  Any right or remedy of the Members hereunder may be waived by Board Approval, and any such waiver shall be binding on all Members.  Except as specifically herein provided, no failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver thereof, and a waiver of a particular right or remedy on one occasion shall not be deemed a waiver of any other right or remedy or a waiver on any subsequent occasion.
(b)    Except as otherwise provided in this Agreement, any approval or consent of the Members may be given by Board Approval, and any such approval or consent shall be binding on all Members.
Section 10.8    Notices.      All notices, demands, solicitations of consent or approval, and other communications hereunder shall be in writing or by electronic mail (with or without attached PDFs), and shall be sufficiently given if (a) personally delivered, (b) sent by postage prepaid, registered or certified mail, return receipt requested, (c) sent by electronic mail, (d) sent by a reputable overnight courier or (e) sent by facsimile transmission, addressed as follows: if intended for the Company, to the Company’s principal business office determined pursuant to Section 2.3; and if intended for any Member, to the address of such Member set forth on the Company’s records, or to such other address as any Member may designate by written notice.  Notices shall be deemed to have been given (i) when personally delivered, (ii) if sent by registered or certified mail, on the earlier of (A) three days after the date on which deposited in the mails or (B) the date on which received, or (iii) if sent by electronic mail, overnight courier or facsimile transmission, on the date on which received; provided that notices of a change of address shall not be deemed given until the actual receipt thereof.  The provisions of this Section 10.8 shall not prohibit the giving of written notice in any other manner; any such written notice shall be deemed given only when actually received.
Section 10.9    Construction.    
(a)    The captions used herein are intended for convenience of reference only and shall not modify or affect in any manner the meaning or interpretation of any of the provisions of this Agreement.
(b)    As used herein, the singular shall include the plural (and vice versa), the masculine gender shall include the feminine and neuter, and the neuter gender shall include the masculine and feminine, unless the context otherwise requires.
(c)    The words “hereof,” “herein,” and “hereunder,” and words of similar import, when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(d)    References in this Agreement to Articles, Sections and Schedules are intended to refer to Articles, Sections and Schedules of this Agreement unless otherwise specifically stated.

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(e)    Nothing in this Agreement shall be deemed to create any right in or benefit for any creditor of the Company that is not a party hereto, and this Agreement shall not be construed in any respect to be for the benefit of any creditor of the Company that is not a party hereto.
(f)    References to any Person include such Person’s successors (including any successor by merger, consolidation, conversion or acquisition of all or substantially all of such Person’s assets) and assigns; provided that, if restricted by this Agreement, only if such successors and assigns are permitted hereunder.
(g)    Reference to day or days without further qualification means calendar days.
(h)    References to any agreement, document or instrument means such agreement, document or instrument, together with all schedules, exhibits and annexes thereto, in each case as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof.
(i)    References to any applicable law means such applicable law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any Section or other provision of any applicable law means that provision of such applicable law from time to time in effect, including those constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision.
(j)    The term “including” shall mean “including without limitation.”
(k)    References to “cash” “$” or “dollars” means the lawful currency of the United States of America.
Section 10.10    Amendments.    
(a)    This Agreement may be amended at any time and from time to time by Board Approval and the approval of each Member.
(b)    Notwithstanding the foregoing, subject to the conditions to the admission or withdrawal of any Member or change in any Member’s Capital Commitment set forth herein, a Member may amend this Agreement and the Member List at any time and from time to time to reflect the admission or withdrawal of any Member or the related change, if any, in any Member’s Capital Commitment, as contemplated by this Agreement.
(c)    Notwithstanding anything to the contrary in this Agreement or in any other document governing the formation, management or operation of the Company, for so long as any obligation under the Loan and Security Agreement is outstanding, neither the Members nor the Company shall amend, alter or change any of Sections 2.4, 2.9, Section 3.1, Section 3.2, Section 5.3(c), 6.2(a),  6.4(b), 6.7(b), 6.11(b), 6.14(f), 8.2(b), this Section 10.10 or Article 1 of this Agreement (to the extent that the terms defined in Article 1 are used in any of the foregoing sections) (the “Special Purpose Provisions”), or any other provisions of this or any other document governing the formation, management or operation of the Company in a manner that is inconsistent with any of the Special Purpose Provisions, unless the LSA Administrative Agent consents in advance and in writing.  The Special Purpose Provisions shall restrict all Subsidiaries and Alternative Investment Vehicles to the same extent such provisions restrict the Company. In the event of any conflict between any of the 

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Special Purpose Provisions and any other provision of this or any other document governing the formation, management or operation of the Company, a Subsidiary or an Alternative Investment Vehicle, the Special Purpose Provisions shall control.  The lenders under the Loan and Security Agreement, and their respective successors or assigns, are intended third-party beneficiaries of this Agreement and may enforce the Special Purpose Provisions.
Section 10.11    Legal Counsel.      The Company has engaged Schulte Roth & Zabel LLP (“Company Counsel”) as legal counsel to the Company.  Company Counsel has previously represented and/or concurrently represents the interests of the Company, SkyKnight and/or parties related thereto in connection with matters other than the preparation of this Agreement and may represent such Persons in the future.  Each Member: (a) approves Company Counsel’s representation of the Company and SkyKnight in the preparation of this Agreement; and (b) acknowledges that Company Counsel has not been engaged by any other Member to protect or represent the interests of such Member vis-à-vis the Company or the preparation of this Agreement, and that actual or potential conflicts of interest may exist among the Members in connection with the preparation of this Agreement.  In addition, each Member: (i) acknowledges the possibility of a future conflict or dispute among Members or between any Member or Members and the Company or the Administrative Agent; and (ii) acknowledges the possibility that, under the laws and ethical rules governing the conduct of attorneys, Company Counsel may be precluded from representing the Company and/or SkyKnight (or any equity holder thereof) in connection with any such conflict or dispute.  Nothing in this Section 10.11 shall preclude the Company from selecting different legal counsel to represent it at any time in the future and no Member shall be deemed by virtue of this Section 10.11 to have waived its right to object to any conflict of interest relating to matters other than this Agreement or the transactions contemplated herein.
Section 10.12    Execution.      This Agreement may be executed in any number of counterparts and all such counterparts together shall constitute one agreement binding on all Members.
Section 10.13    Binding Effect.      This Agreement shall be binding upon and shall inure to the benefit of the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto; provided that this provision shall not be construed to permit any assignment or transfer which is otherwise prohibited hereby.
Section 10.14    Severability.      If any one or more of the provisions contained in this Agreement, or any application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and all other applications thereof shall not in any way be affected or impaired thereby.
Section 10.15    Computation of Time.      In computing any period of time under this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included.  The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday on which banks in New York, Delaware or Maryland are closed, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or such a legal holiday.  Any reference to “Business Day” shall refer to any day which is not a Saturday, Sunday or such a legal holiday.  Any references to time of day shall refer to New York time.

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Section 10.16    Entire Agreement.      This Agreement entered into between the Company and each Member in connection with the Members’ subscription of interests in the Company sets forth the entire understanding among the parties relating to the subject matter hereof, any and all prior correspondence, conversations, memoranda or other writings being merged herein and replaced and being without effect hereon.  No promises, covenants or representations of any character or nature other than those expressly stated herein or in any such other agreement have been made to induce any party to enter into this Agreement.
[Remainder of page left blank]

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IN WITNESS WHEREOF, the Members have caused this Limited Liability Company Agreement to be executed and delivered as of the date first set forth above.
SkyKnight Income, LLC
By: SkyKnight Capital, L.P., its managing member
By: SkyKnight Capital Management, LLC, its general partner
By: _/s/ Matthew Ebbel____________
Name: Matthew Ebbel
Title: Authorized Signatory

New Mountain Finance Corporation
By:    __/s/ Robert A. Hamwee_____
Name: Robert A. Hamwee
Title: Chief Executive Officer and President

Independent Board Member

_/s/ Michael Bondar_______________
Name: Michael Bondar
Address: P.O. Box 7162
New York, NY 10150

    

Schedule A
Member List
Dated as of:  March 9, 2016
	
					
	Member
	

Address
	Capital Commitment
	

Capital Contributions 
(since Formation)
	

Proportionate Share

	

SkyKnight Income, LLC
	SkyKnight Capital, L.P.
555 12th Street, Suite 2130
Oakland, CA 94607
	$20,600,000
	

$0
	

20.6%

	

New Mountain Finance Corporation
	

787 Seventh Avenue, 48th Floor, New York, NY 10019
	$79,400,000
	

$0
	

79.4%

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Schedule B
Partial List of Company Actions Requiring Board Approval
(a)    Without limiting the provisions in the Agreement requiring the Board to approve all actions by the Company, including Section 6.1(a), 6.2(b) and 6.4, for purposes of clarity, Board Approval shall be required for the Company, any Subsidiary or any Alternative Investment Vehicle that is wholly-owned or otherwise controlled by the Company to do any of the following:
(i)    Take any action or decision which results in the investment of any amount (including any additional amount) in an Investment (other than an amount invested pursuant to a binding obligation previously entered into with Board Approval) or the sale, transfer or other disposition of any Investment (other than an amount sold, transferred or otherwise disposed of pursuant to a binding obligation previously entered into with Board Approval);
(ii)    Make any investment or subject the Company, an Alternative Investment Vehicle or a Subsidiary to any obligation;
(iii)    Modify or waive the terms of any Investment or grant any required approval or consent thereunder either (a) where such approval or consent requires a unanimous vote of lenders or (b) that, if provided by the requisite number or percentage of lenders, would result in or enable any of the following: (1) an extension of additional capital or an extension of or increase in commitments; (2) an amendment or waiver of a financial covenant (including definitions having such effect); (3) an approval of an acquisition which is expected to represent more than 10% of the earnings before interest, taxes, depreciation and amortization of the obligor or issuer; (4) an approval of a sale of assets which represents more than 10% of the earnings before interest, taxes, depreciation and amortization of the obligor or issuer; (5) the incurrence of additional senior debt by the obligor or issuer equal to or greater than 10% of the existing senior commitments or which results in leverage increasing by more than 1 times; or (6) an amendment or waiver of any payment term, including mandatory prepayments;
(iv)    Enter into any transaction with a Member or an Affiliate of a Member (except as specifically permitted by this Agreement);
(v)    Issue any securities, other than limited liability company membership interests in respect of Capital Contributions in accordance with the Capital Commitments;
(vi)    Make short sales of assets or engage in hedging or other derivative or commodities transactions;
(vii)    Enter into any Facility or derivative instrument, directly or indirectly, to leverage the Investments of the Company, any Subsidiary or any Alternative Investment Vehicle, or to pay Expenses, indemnification and/or other obligations; or modify or waive the terms thereof; or make a voluntary prepayment permitted thereunder; or repay or refinance the same;
(viii)    Guarantee, or otherwise become liable for, the obligations of other Persons, including, without limitation, Portfolio Companies and Alternative Investment Vehicles;

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(ix)    Replace the Administrative Agent for the Company, or amend, modify or waive the terms of the Administrative Services Agreement, in each instance other than in accordance with the terms of the Administrative Services Agreement;
(x)    Approve a sub-administration agreement, or amend, modify or waive the terms of a sub-administration agreement;
(xi)    Engage and/or replace the independent certified public accounting firm for the Company, or amend, modify or waive the terms of such engagement;
(xii)    Engage and/or replace other service providers who shall provide services to the Company or its business and negotiate, amend, modify or waive the terms of and such engagement;
(xiii)    Admit a substitute or new Member or approve a transfer or pledge of an interest in the Company in accordance with Article 7, except as provided otherwise herein, including pursuant to Section 7.1(a);
(xiv)    Amend, modify or waive any provision of this Agreement;
(xv)    Make non-mandatory accounting determinations that affect reported results of operations, balance sheet items or changes in cash flows of the Company;
(xvi)    Approve or change the valuation process or procedures to be implemented by the Administrative Agent, including the selection, engagement or termination of third-party service providers;
(xvii)    Accept valuations of any assets or liabilities of the Company;
(xviii)    Approve the participation by the Administrative Agent on behalf of the Company on creditors’ committees and any decisions or votes by the Administrative Agent on such committees that would have an impact on, or result in a modification to, the Investment (any such decision or vote by the Administrative Agent to be at the direction of the Board);
(xix)    Change the name or principal office, or open additional offices;
(xx)    File for bankruptcy;
(xxi)    Commence or settle any claims or litigation;
(xxii)    Approve a drawdown of all or any portion of the unpaid balances of the Capital Commitments of the Members, and authorize issuance of the related Capital Call Notice to the Members;
(xxiii)    Determination of reasonable reserves required by the terms of this Agreement or otherwise appropriate for the Company, including any Reserved Amounts;
(xxiv)    Determination of amounts, if any, available for distribution to the Members, and authorization to proceed with any such distributions;

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(xxv)    Distribute Investments in kind (excluding cash and cash equivalents);
(xxvi)    Take any action, vote or decision, or provide any consent, approval or waiver, in connection with any right, power, privilege or interest in or with respect to any Affiliate, Subsidiary and Alternative Investment Vehicle, including in respect of any Facility entered into by or on behalf of any Affiliate, Subsidiary and Alternative Investment Vehicle, except to the extent such action, vote, decision, consent, approval or waiver may be exercised (A) by the Administrative Agent in accordance with the terms of the Administrative Services Agreement, or (B) by an agent of the Company as contemplated by any Facility transaction documents authorized by Board Approval; and
(xxvii)    Without duplication of the foregoing, take any action or decision which pursuant to any provision of this Agreement expressly requires Board Approval, including the exercise of any of the powers or actions listed in Section 2.4(b).
(b)    Subject to obtaining Board Approval, the Administrative Agent, the Board and each Member may, in the name and on behalf of the Company, do all things which they deem necessary, advisable or appropriate to make investment opportunities approved by Board Approval available to the Company, to carry out and implement matters approved by Board Approval, and to administer the activities of the Company as specifically directed by the Board, including:
(i)    Execute and deliver all agreements, amendments and other documents and exercise and perform all rights and obligations with respect to any Person in which the Company holds an interest, including Subsidiaries, Alternative Investment Vehicles and other investment and financing vehicles in carrying out and implementing matters specifically approved by Board Approval;
(ii)    Bring to the attention of the Board such opportunities as such Member or the Administrative Agent deems appropriate for the purchase, acquisition, transfer and disposition of Investments, and, subject to specific Board Approval, execute and deliver all agreements, amendments and other documents and exercise and perform of all rights and obligations with respect thereto;
(iii)    Execute and deliver all agreements, amendments and other documents and exercise and perform all rights and obligations with respect to a Facility in carrying out and implementing matters specifically approved by Board Approval, including implementing in the ordinary course of business any increases and decreases in borrowings under such Facility that do not impact the Members’ Capital Commitments;
(iv)    Execute and deliver other agreements, amendments and other documents and exercise and perform all rights and obligations with respect to matters specifically approved by Board Approval; and
(v)    Take any and all other acts specifically delegated to such Member or the Administrative Agent, as the case may be, by this Agreement, by the Administrative Services Agent or by Board Approval.

47

    

Schedule C
Initial Capital Contributions
Initial Capital Contributions of SkyKnight Income, LLC:
	
		
	Asset
	Value

	Cash
	$0

	Other Assets
	$0

	 
	 

	Total
	$0

Initial Capital Contributions of New Mountain Finance Corporation:
	
		
	Asset
	Value

	Cash
	$0

	Other Assets
	$0

	 
	 

	Total
	$0

45
        

Schedule D
Member Capital Commitments
	
			
	Member
	% of Total Capital 
Commitments
	Capital Commitment

	SkyKnight Income, LLC
	20.6%
	$20,600,000

	New Mountain Finance Corporation
	79.6%
	$79,400,000

	   Total
	100%
	$100,000,000

46Exhibit

Exhibit 10.19

EXECUTION COPY

FORM OF
NEW MOUNTAIN FINANCE CORPORATION

$50,000,000

5.313% Senior Notes due May 15, 2021

______________

NOTE PURCHASE AGREEMENT

______________

Dated May 4, 2016

	
			
	 
	TABLE OF CONTENTS
	 

	 
	 
	 

	SECTION
	HEADING
	PAGE

	 
	 
	 

	SECTION 1.
	AUTHORIZATION OF NOTES; INTEREST RATE
	1

	 
	 
	 

	Section 1.1.
	Authorization of Notes
	1

	Section 1.2.
	Changes in Interest Rate
	1

	 
	 
	 

	SECTION 2.
	SALE AND PURCHASE OF NOTES
	3

	 
	 
	 

	SECTION 3.
	CLOSING
	3

	 
	 
	 

	SECTION 4.
	CONDITIONS TO CLOSING
	4

	 
	 
	 

	Section 4.1.
	Representations and Warranties
	4

	Section 4.2.
	Performance; No Default
	4

	Section 4.3.
	Compliance Certificates
	4

	Section 4.4.
	Opinions of Counsel
	4

	Section 4.5.
	Purchase Permitted By Applicable Law, Etc
	5

	Section 4.6.
	Sale of Other Notes
	5

	Section 4.7.
	Payment of Special Counsel Fees
	5

	Section 4.8.
	Private Placement Number
	5

	Section 4.9.
	Changes in Corporate Structure
	5

	Section 4.10.
	Funding Instructions
	5

	Section 4.11.
	Rating
	5

	Section 4.12.
	Consent of Holders of Other Indebtedness
	5

	Section 4.13.
	Proceedings and Documents
	6

	 
	 
	 

	SECTION 5.
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	6

	 
	 
	 

	Section 5.1.
	Organization; Power and Authority
	6

	Section 5.2.
	Authorization, Etc
	6

	Section 5.3.
	Disclosure
	6

	Section 5.4.
	Organization and Ownership of Shares of Subsidiaries; Affiliates
	7

	Section 5.5.
	Financial Statements; Material Liabilities
	8

	Section 5.6.
	Compliance with Laws, Other Instruments, Etc
	8

	Section 5.7.
	Governmental Authorizations, Etc
	8

	Section 5.8.
	Litigation; Observance of Agreements, Statutes and Orders
	8

	Section 5.9.
	Taxes
	9

	Section 5.10.
	Title to Property; Leases
	9

	Section 5.11.
	Licenses, Permits, Etc
	9

	Section 5.12.
	Compliance with ERISA
	10

	Section 5.13.
	Private Offering by the Company
	10

	Section 5.14.
	Use of Proceeds; Margin Regulations
	10

	Section 5.15.
	Existing Indebtedness; Future Liens
	10

	Section 5.16.
	Foreign Assets Control Regulations, Etc
	11

‐i‐

	
			
	Section 5.17.
	Status under Certain Statutes
	13

	Section 5.18.
	Environmental Matters
	13

	Section 5.19.
	Investment Company Act
	14

	 
	 
	 

	SECTION 6.
	REPRESENTATIONS OF THE PURCHASERS
	14

	 
	 
	 

	Section 6.1.
	Purchase for Investment
	14

	Section 6.2.
	Source of Funds
	14

	 
	 
	 

	SECTION 7.
	INFORMATION AS TO COMPANY
	16

	 
	 
	 

	Section 7.1.
	Financial and Business Information
	16

	Section 7.2.
	Officer’s Certificate
	18

	Section 7.3.
	Visitation
	19

	Section 7.4. 
	Electronic Delivery
	19

	 
	 
	 

	SECTION 8.
	PAYMENT AND PREPAYMENT OF THE NOTES
	20

	 
	 
	 

	Section 8.1.
	Maturity
	20

	Section 8.2.
	Optional Prepayments with Make-Whole Amount
	20

	Section 8.3.
	Allocation of Partial Prepayments
	20

	Section 8.4.
	Maturity; Surrender, Etc.
	20

	Section 8.5.
	Purchase of Notes
	21

	Section 8.6.
	Make-Whole Amount
	21

	Section 8.7.
	Payments Due on Non-Business Days
	23

	Section 8.8.
	Change in Control
	23

	Section 8.9.
	Prepayment on Minimum Unsecured Debt Deficiency  
	 

	 
	Without Make-Whole
	24

	Section 8.10.
	Prepayment on Below Investment Grade Event
	 

	 
	Without Make-Whole
	25

	 
	 
	 

	SECTION 9.
	AFFIRMATIVE CEOVENANTS
	26

	 
	 
	 

	Section 9.1.
	Compliance with Law
	26

	Section 9.2.
	Insurance
	26

	Section 9.3.
	Maintenance of Properties
	26

	Section 9.4.
	Payment of Taxes and Claims
	27

	Section 9.5.
	Corporate Existence, Etc
	27

	Section 9.6.
	Books and Records
	27

	Section 9.7
	Subsidiary Guarantors
	27

	Section 9.8.
	Rating Confirmation.
	28

	Section 9.9.
	Status of RIC and BDC
	28

	 
	 
	 

	SECTION 10.
	NEGATIVE COVENANTS
	29

	 
	 
	 

	Section 10.1.
	Transactions with Affiliates
	29

	Section 10.2.
	Fundamental Changes
	29

	Section 10.3.
	Line of Business
	30

‐ii‐

	
			
	Section 10.4.
	Terrorism Sanctions Regulations
	30

	Section 10.5.
	Liens
	31

	Section 10.6.
	Restricted Payments.
	31

	Section 10.7.
	Certain Financial Covenants
	31

	Section 10.8.
	Most Favored Lender Status
	31

	 
	 
	 

	SECTION 11.
	EVENTS OF DEFAULT
	33

	 
	 
	 

	SECTION 12.
	REMEDIES ON DEFAULT, ETC
	35

	 
	 
	 

	Section 12.1.
	Acceleration
	35

	Section 12.2.
	Other Remedies
	36

	Section 12.3.
	Rescission
	36

	Section 12.4.
	No Waivers or Election of Remedies, Expenses, Etc
	36

	 
	 
	 

	SECTION 13.
	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
	37

	 
	 
	 

	Section 13.1.
	Registration of Notes
	37

	Section 13.2.
	Transfer and Exchange of Notes
	37

	Section 13.3.
	Replacement of Notes
	37

	 
	 
	 

	SECTION 14.
	PAYMENTS OF NOTES
	38

	 
	 
	 

	Section 14.1.
	Place of Payment
	38

	Section 14.2.
	Home Office Payment
	38

	 
	 
	 

	SECTION 15.
	EXPENSES, ETC
	38

	 
	 
	 

	Section 15.1.
	Transaction Expenses
	38

	Section 15.2.
	Survival
	39

	 
	 
	 

	SECTION 16.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; 
	 

	 
	ENTIRE AGREEMENT
	39

	 
	 
	 

	SECTION 17.
	AMENDMENT AND WAIVER
	40

	 
	 
	 

	Section 17.1.
	Requirements
	40

	Section 17.2.
	Solicitation of Holders of Notes
	40

	Section 17.3.
	Binding Effect, etc
	41

	Section 17.4.
	Notes Held by Company, Etc
	41

	 
	 
	 

	SECTION 18.
	NOTICES
	41

	 
	 
	 

	SECTION 19.
	REPRODUCTION OF DOCUMENTS
	42

	 
	 
	 

	SECTION 20.
	CONFIDENTIAL INFORMATION
	42

	 
	 
	 

	SECTION 21.
	SUBSTITUTION OF PURCHASER
	43

	 
	 
	 

	SECTION 22.
	MISCELLANEOUS
	43

	 
	 
	 

‐iii‐

	
			
	Section 22.1.
	Successors and Assigns
	43

	Section 22.2.
	Accounting Terms
	44

	Section 22.3.
	Severability
	44

	Section 22.4.
	Construction, etc
	44

	Section 22.5.
	Counterparts
	44

	Section 22.6.
	Governing Law
	44

	Section 22.7.
	Jurisdiction and Process; Waiver of Jury Trial
	44

	 
	 
	 

	Signature
	46

‐iv‐

	
		
	SCHEDULE A -
	DEFINED TERMS

	SCHEDULE 1 -
	FORM OF 5.313% SENIOR NOTE DUE MAY 15, 2021

	SCHEDULE 4.4(a) -
	FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY

	SCHEDULE 4.4(b) -
	FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS

	SCHEDULE 5.3 -
	DISCLOSURE MATERIALS

	SCHEDULE 5.4 - 
	SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK

	SCHEDULE 5.5 -
	FINANCIAL STATEMENTS

	SCHEDULE 5.15 -
	EXISITING INDEBTEDNESS

	SCHEDULE 10.1 -
	AFFILIATE TRANSACTIONS

	SCHEDULE B -
	INFORMATION RELATING TO PURCHASERS

‐v‐

New Mountain Finance Corporation
787 7th Avenue, 48th Floor, 
New York, NY 10019
5.313% Senior Notes due May 15, 2021

May 4, 2016

To Each of the Purchasers Listed in
Schedule B Hereto:
Ladies and Gentlemen:
New Mountain Finance Corporation, a Delaware corporation (together with any successor thereto that becomes a party hereto pursuant to Section 10.2, the “Company”), agrees with each of the Purchasers as follows:
		
	SECTION 1.
	AUTHORIZATION OF NOTES; INTEREST RATE

Section 1.1.    Authorization of Notes.    The Company will authorize the issue and sale of $50,000,000 aggregate principal amount of its 5.313% Senior Notes due May 15, 2021 (as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13, the “Notes”).  The Notes shall be substantially in the form set out in Schedule 1.  Certain capitalized and other terms used in this Agreement are defined in Schedule A.  References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.
Section 1.2.    Changes in Interest Rate    (a) If at any time a Below Investment Grade Event occurs, then:
(i)    as of the date of the occurrence of the Below Investment Grade Event to and until the date on which such Below Investment Grade Event is no longer continuing (as evidenced by the receipt and delivery to the holders of the Notes of any Rating necessary to cure such Below Investment Grade Event), the Notes shall bear interest at the Adjusted Interest Rate; provided that, such Adjusted Interest Rate shall not apply to the Notes held by holders who accepted an offer of prepayment pursuant to Section 8.10 with respect to such Notes and such Below Investment Grade Event (including, for the avoidance of doubt, for the period from the occurrence of such event to the acceptance of such offer of prepayment pursuant to Section 8.10); and

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(ii)    the Company shall promptly, and in any event within twenty (20) Business Days after the Section 8.10 Prepayment Offer Deadline, notify the holders of the Notes (other than the holders of the Notes who accepted an offer of prepayment pursuant to Section 8.10 with respect to such Notes and such Below Investment Grade Event) in writing, sent in the manner provided in Section 18, that a Below Investment Grade Event has occurred, which written notice shall be accompanied by evidence satisfactory to the Required Holders to such effect and confirming the interest rate to be payable in respect of the Notes in consequence thereof.
(b)    If at any time a Minimum Unsecured Debt Deficiency occurs, then:
(i)    as of the date of the occurrence of the Minimum Unsecured Debt Deficiency to and until the date on which such Minimum Unsecured Debt Deficiency is no longer continuing (as evidenced by the receipt and delivery to the holders of the Notes of notice in writing, in the manner provided in Section 18, that such Minimum Unsecured Debt Deficiency has been cured), the Notes shall bear interest at the Adjusted Interest Rate; provided that, such Adjusted Interest Rate shall not apply to the Notes held by holders who accepted an offer of prepayment pursuant to Section 8.9 with respect to such Notes and such Minimum Unsecured Debt Deficiency (including, for the avoidance of doubt, for the period from the occurrence of such event to the acceptance of such offer of prepayment pursuant to Section 8.9); and
(ii)    the Company shall promptly, and in any event within twenty (20) Business Days after the Section 8.9 Prepayment Offer Deadline, notify the holders of the Notes (other than the holders of the Notes who accepted an offer of prepayment pursuant to Section 8.9 with respect to such Notes and such Minimum Unsecured Debt Deficiency) in writing, sent in the manner provided in Section 18, that a Minimum Unsecured Debt Deficiency has occurred, which written notice shall be accompanied by evidence satisfactory to the Required Holders to such effect and confirming the interest rate to be payable in respect of the Notes in consequence thereof.
(c)    Each holder of a Note shall, at the Company’s expense, use reasonable efforts to cooperate with any reasonable request made by the Company in connection with any rating appeal or application.
(d)    The fees and expenses of any NRSRO and all other costs incurred in connection with obtaining, affirming or appealing a Rating pursuant to this Section 1.2 shall be borne by the Company.
(e)    As used herein, “Adjusted Interest Rate” means the interest rate on the Notes shall be 6.313% per annum.
    

‐2‐

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(f)    As used herein, a “Below Investment Grade Event” shall occur if
(i)    at any time the Company has obtained a Rating from only one NRSRO, the then most recent Rating from such NRSRO that is in full force and effect (not having been withdrawn) is less than Investment Grade; or
(ii)    at any time the Company has obtained a Rating from two NRSROs, the then lower of the most recent Ratings from the NRSROs that are in full force and effect (not having been withdrawn) is less than Investment Grade; or
(iii)    at any time the Company has obtained a Rating from three or more NRSROs, the then second lowest of the most recent Ratings from the NRSROs that is in full force and effect (not having been withdrawn) is less than Investment Grade; or
(iv)    at any time the Company shall have failed to receive and deliver to the holders of the Notes a Rating from at least one NRSRO as required pursuant to Section 9.8.
(g)    Following the occurrence of an Event of Default, the Notes shall bear interest at the Default Rate as stated in the Note.
		
	SECTION 2.
	SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
		
	SECTION 3.
	CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 W. Monroe Street, Chicago, Illinois 60603, at 10:00 a.m., Chicago time, at a closing (the “Closing”) on May 6, 2016 or on such other Business Day there-after on or prior to May 11, 2016 as may be agreed upon by the Company and the Purchasers.  At the Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number xxxxxxxxxxxx at U.S. Bank National Association, in Boston, MA, ABA No. xxxxxxxxx.  If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Company to tender such Notes.

‐3‐

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

		
	SECTION 4.
	CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1.    Representations and Warranties. The representations and warranties of the Company in this Agreement shall be correct when made and at the Closing.
Section 4.2.    Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing.  Before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred and be continuing.  Neither the Company nor any Subsidiary shall have entered into any transaction since the date of the Initial Disclosure Materials that would have been prohibited by Section 10 had such Section applied since such date.
Section 4.3.    Compliance Certificates.
(a)    Officer’s Certificate.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b)    Secretary’s Certificate.  The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect.
Section 4.4.    Opinions of Counsel.  Such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) from Sutherland Asbill & Brennan LLP, counsel for the Company, covering the matters set forth in Schedule 4.4(a) and covering such other matters incident to the transactions contemplated hereby as such Purchaser or its counsel may reasonably request (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.
    

‐4‐

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 4.5.    Purchase Permitted By Applicable Law, Etc.  On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6.    Sale of Other Notes.  Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule B.
Section 4.7.    Payment of Special Counsel Fees.  Without limiting Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.
Section 4.8.    Private Placement Number  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.
Section 4.9.    Changes in Corporate Structure.  The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.  
Section 4.10.    Funding Instructions.  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.
Section 4.11.    Rating.  On the date of the Closing, the Notes shall be rated “BBB+” or better by Egan-Jones. 
Section 4.12.    Consent of Holders of Other Indebtedness.  On or prior to the date of the Closing, any consents or approvals required to be obtained from any holder or holders of any outstanding Indebtedness of the Company or its Subsidiaries and any amendments of agreements pursuant to which any Indebtedness may have been issued which shall be necessary to permit the consummation of the transactions contemplated hereby shall have been obtained (and shall be in full force and effect on the date of the Closing) and shall be satisfactory to such Purchaser and its special counsel.  
    

‐5‐

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 4.13.    Proceedings and Documents.  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.
		
	SECTION 5.
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to each Purchaser, as of the date of the Closing (or, if any such representations and warranties expressly relate to an earlier date, then as of such earlier date), that:
Section 5.1.    Organization; Power and Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Company has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.
Section 5.2.    Authorization, Etc.  This Agreement and the Notes have been duly au-thorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3.    Disclosure.  (a) The Company, through its agent, Incapital LLC, has delivered to each Purchaser a copy of the documents, certificates or other writings identified in Schedule 5.3 (the “Initial Disclosure Materials”), relating to the transactions contemplated hereby.  The Initial Disclosure Materials fairly describe, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries.  This Agreement, the Initial Disclosure Materials, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Company (other than financial projections, pro forma financial information, and other forward-looking information referenced in Section 5.3(b)) on or prior to March 24, 2016 in connection with the transactions contemplated hereby and identified in Schedule 5.3 (this Agreement, the Initial Disclosure Materials and such documents, certificates or other writings, including, without limitation, valuations of Investments of the Company, and such financial statements delivered to each Purchaser (other than financial projections, pro forma financial information, and other forward-looking information referenced in Section 5.3(b)) being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure Documents, since December 31, 2015, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

‐6‐

	
		
	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(b)    All financial projections, pro forma financial information and other forward-looking information which has been delivered to each Purchaser by or on behalf of the Company in connection with the transactions contemplated by this Agreement are based upon good faith assumptions and, in the case of financial projections and pro forma financial information, good faith estimates, in each case, believed to be reasonable at the time made, it being recognized that (i) such financial information as it relates to future events is subject to significant uncertainty and contingencies (many of which are beyond the control of the Company) and are therefore not to be viewed as fact, and (ii) actual results during the period or periods covered by such financial information may materially differ from the results set forth therein.
Section 5.4.    Organization and Ownership of Shares of Subsidiaries; Affiliates.  (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary, (ii) the Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s directors and senior officers.
(b)    All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of any Lien that is prohibited by this Agreement.
(c)    Each Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.
(d)    No Subsidiary is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or to any other Subsidiary of the Company that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 5.5.    Financial Statements; Material Liabilities.  The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries listed on Schedule 5.5.  All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).   The Company and its Subsidiaries do not have any Material liabilities that are not disclosed in the Disclosure Documents.
Section 5.6.    Compliance with Laws, Other Instruments, Etc.  The execution, delivery and performance by the Company of this Agreement and the Notes will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Subsidiary under, (A) the corporate charter, by-laws or shareholders agreement of the Company or any Subsidiary or (B) any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, or any other agreement or instrument to which the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary, in each case, except where any of the foregoing (other than clause (i)(A) above), individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 
Section 5.7.    Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes, other than any filing required under the Securities Exchange Act of 1934 or the rules or regulations promulgated thereunder on Form 8-K, Form 10-Q, or Form 10-K.
Section 5.8.    Litigation; Observance of Agreements, Statutes and Orders  (a) There are no actions, suits, investigations or proceedings pending or, to the best knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b)    Neither the Company nor any Subsidiary is (i) in default under any agreement or instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (iii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including, without limitation, Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16), which default or violation could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 5.9.    Taxes.  The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) where the failure to file or pay, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other tax or assessment that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of U.S. federal, state or other taxes for all fiscal periods are adequate.  The U.S. federal income tax liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2011.
Section 5.10.    Title to Property; Leases.  The Company and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement.  All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects. 
Section 5.11.    Licenses, Permits, Etc.  (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others, except for any such conflicts that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(b)    To the best knowledge of the Company, no product or service of the Company or any of its Subsidiaries infringes any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
(c)    To the best knowledge of the Company, there is no violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries, except for any such violations that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 5.12.    Compliance with ERISA.  Neither the Company nor any ERISA Affiliate maintains, contributes to or is obligated to maintain or contribute to, or has, at any time within the past six years, maintained, contributed to or been obligated to maintain or contribute to, any employee benefit plan which is subject to Title I or Title IV of ERISA or section 4975 of the Code.  Neither the Company nor any ERISA Affiliate is, or has ever been at any time within the past six years, a “party in interest” (as defined in section 3(14) of ERISA) or a “disqualified person” (as defined in section 4975 of the Code) with respect to any Plan.
Section 5.13.    Private Offering by the Company.  Neither the Company nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers, each of which has been offered the Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.
Section 5.14.    Use of Proceeds; Margin Regulations.  The Company will apply the proceeds of the sale of the Notes to repay outstanding Indebtedness of the Company and its Subsidiaries and/or for other general corporate purposes of the Company, including the acquisition and funding (either directly or through one or more wholly-owned Subsidiaries) of leveraged loans, mezzanine loans, high-yield securities, convertible securities, preferred stock, common stock, and other Portfolio Investments.  No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).  Margin stock does not constitute more than 10% of the value of the consolidated assets of the Company and the Company does not have any present intention that margin stock will constitute more than 10% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.
Section 5.15.    Existing Indebtedness; Future Liens.  (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of March 31, 2016 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(b)    Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness.
(c)    Neither the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed in Schedule 5.15.
Section 5.16.    Foreign Assets Control Regulations, Etc.  (a) Neither the Company nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”).  Neither the Company nor any Controlled Entity has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.
(b)    No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or Canada Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person or Canada Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions or Canadian Economic Sanctions.
(c)    Neither the Company nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act, any similar provisions of the Criminal Code (Canada), any U.S. Economic Sanctions, any Canadian Economic Sanctions or any other United States or Canadian law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current 

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

and future Anti-Money Laundering Laws and U.S. Economic Sanctions and Canadian Economic Sanctions Laws.
(d)    (1) Neither the Company nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010 and any similar provisions of the Criminal Code (Canada) (collectively, “Anti-Corruption Laws”), (ii) to the Company’s actual knowledge after making due inquiry, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has been or is the target of sanctions imposed by the United Nations or the European Union;
(2)    To the Company’s actual knowledge after making due inquiry, neither the Company nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Governmental Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and
(3)    No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage.  The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(e)    Neither the Company nor any Controlled Entity is (i) a Canada Blocked Person, (ii) an agent, department, or instrumentality of, or is otherwise controlled by or knowingly acting on behalf of, directly or indirectly, any such Person, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of any Canadian Economic Sanctions Laws.  Neither the Company nor any Controlled Entity has been notified by a governmental authority in Canada that its name appears or has been proposed for inclusion on a list of Persons maintained by a governmental authority in Canada that engage in investment or other commercial activities in any country that is subject to Canadian Economic Sanctions Laws.  Neither the Company nor any Controlled Entity knowingly engages in any dealings or transactions with any Canada Blocked Person.
Section 5.17.    Status under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18.    Environmental Matters.  (a) Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim and no proceeding has been instituted asserting any claim against the Company or any of its Subsidiaries or any of their respective real properties or other assets now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. 
(b)    Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(c)    Neither the Company nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(d)    Neither the Company nor any Subsidiary has disposed of any Hazardous Materials in a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(e)    All buildings on all real properties now owned, leased or operated by the Company or any Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 5.19.    Investment Company Act 
(a)    Status as Business Development Company.  The Company has elected to be regulated as a “business development company” within the meaning of the Investment Company Act and qualifies as a RIC.
(b)    Compliance with Investment Company Act.  The business and other activities of the Company and its Subsidiaries, including the issuance of the Notes hereunder, the application of the proceeds and repayment thereof by the Company and the consummation of the transactions contemplated by this Agreement do not result in a violation or breach in any material respect of the provisions of the Investment Company Act or any rules, regulations or orders issued by the SEC thereunder, in each case that are applicable to the Company and its Subsidiaries.
(c)    Investment Policies.  The Company is in compliance in all respects with the Investment Policies, except to the extent that the failure to so comply could not reasonably be expected to have a Material Adverse Effect.
		
	SECTION 6.
	REPRESENTATIONS OF THE PURCHASERS.

Section 6.1.    Purchase for Investment.  Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
Section 6.2.    Source of Funds.  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a)    the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(b)    the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c)    the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d)    the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d);or
(e)    the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
(f)    the Source is a governmental plan; or
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(g)    the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
(h)    the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.
		
	SECTION 7.
	INFORMATION AS TO COMPANY.

Section 7.1.    Financial and Business Information.  The Company shall deliver to each holder of a Note that is an Institutional Investor:
(a)    Quarterly Statements - within 60 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Company’s Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,
(i)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and
(ii)    consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Form 10-Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a);
(b)    Annual Statements - within 105 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Company’s Annual Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each fiscal year of the Company, duplicate copies of
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(i)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and
(ii)    consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that the delivery within the time period specified above of the Company’s Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Securities Exchange Act of 1934) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b);
(c)    [Reserved]; 
(d)    Notice of Default or Event of Default - promptly, and in any event within five days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;
(e)    [Reserved];
(f)    Notices from Governmental Authority - promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;
(g)    Resignation or Replacement of Auditors - within ten days following the date on which the Company’s auditors resign or the Company elects to change auditors, as the case may be, notification thereof, together with such supporting information as the Required Holders may request; 
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(h)    Requested Information - with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder of a Note; and 
(i)    Other Material Developments - with reasonable promptness, any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Section 7.2.    Officer’s Certificate.  Each set of financial statements delivered to a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer:
(a)    Covenant Compliance - setting forth the information from such financial statements that is required in order to establish whether the Company was in compliance with the requirements of Section 10.7 [Certain Financial Covenants], including, without limitation, any Existing Facility Additional Provision or New Facility Additional Provision, during the quarterly or annual period covered by the statements then being furnished, (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence.  In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.2) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from GAAP with respect to such election; and
(b)    Event of Default - certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 7.3.    Visitation.  The Company shall permit the representatives of each holder of a Note that is an Institutional Investor:
(a)    No Default - if no Default or Event of Default then exists, at the expense of such holder and upon not less than ten (10) Business Days prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Company’s officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and
(b)    Default - if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such times and as often as may be requested.
Section 7.4.    Electronic Delivery.  Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Company pursuant to Sections 7.1(a) or (b) and Section 7.2 shall be deemed to have been delivered if the Company satisfies any of the following requirements with respect thereto:
(i)    such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 are delivered to each holder of a Note by e-mail; 
(ii)    the Company shall have filed such Form 10-Q or Form 10-K, satisfying the requirements of Section 7.1(a) or Section 7.1(b), as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements of Section 7.2 available on its home page on the internet, which is located at http://www.newmountainfinance.com as of the date of this Agreement, or shall have delivered such certificate to each holder of a Note by e-mail; or
(iii)    such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 are timely posted by or on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; 
provided however, that in the case of any of clauses (ii) or (iii), the Company shall have given each holder of a Note written notice, which may be by e-mail, included in the Officer’s Certificate delivered pursuant to Section 7.2, or in accordance with Section 18, of such posting or filing in connection with each delivery, provided further, that upon request of any holder to receive paper copies of such forms, financial statements and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail them or deliver such paper copies, as the case may be, to such holder.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

		
	SECTION 8.
	PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1.    Maturity.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.  
Section 8.2.    Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time, all, or from time to time any part, of the Notes, in an amount not less than 10% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount; provided, that at any time on or after February 15, 2021 the Company may, at its option, upon notice as provided below, prepay all or any part of the Notes at 100% of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date.  The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than ten days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 17.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.
Section 8.3.    Allocation of Partial Prepayments.  In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  All partial prepayments made pursuant to Sections 8.8, 8.9 and 8.10 shall be applied only to the Notes of the holders who have accepted the offer of prepayment and shall be allocated among all such Notes in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.
Section 8.4.    Maturity; Surrender, Etc.      In the case of each optional prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 8.5.    Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions.  Any such offer shall provide each holder with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 10 Business Days.  If the holders of more than 25% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 5 Business Days from its receipt of such notice to accept such offer.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6.    Make-Whole.  
“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal; provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:
“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.  

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.4 or Section 12.1.
“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 8.7.    Payments Due on Non-Business Days.  Anything in this Agreement or the Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
Section 8.8.    Change in Control.  
(a)    Notice of Change in Control.  The Company will, within five Business Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control to each holder of Notes.  Such notice shall contain and constitute an offer to prepay Notes as described in subparagraph (c) of this Section 8.8 and shall be accompanied by the certificate described in subparagraph (g) of this Section 8.8.
(b)    [Reserved].  
(c)    Offer to Prepay Notes.  The offer to prepay Notes contemplated by subparagraphs (a) of this Section 8.8 shall be an offer to prepay, in accordance with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Section 8.8 Proposed Prepayment Date”).  Such date shall be not less than 30 days and not more than 60 days after the date of such offer (if the Section 8.8 Proposed Prepayment Date shall not be specified in such offer, the Section 8.8 Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of such offer).
(d)    Acceptance/Rejection.  A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered to the Company not later than 15 days after receipt by such holder of the most recent offer of prepayment.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute rejection of such offer by such holder.
(e)    Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to, but excluding, the date of prepayment, but without Make-Whole Amount or other premium.  The prepayment shall be made on the Section 8.8 Proposed Prepayment Date except as provided in subparagraph (f) of this Section 8.8.  
(f)    [Reserved].
(g)    Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying:  (i) the Section 8.8 Proposed Prepayment Date; (ii) that such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest that would be due on each Note offered to be prepaid, accrued to, but excluding, the Section 8.8 Proposed Prepayment Date; (v) that the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date of the Change in Control.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(h)    [Reserved].
(i)    All calculations contemplated in this Section 8.8 involving the capital stock of any Person shall be made with the assumption that all convertible Securities of such Person then outstanding and all convertible Securities issuable upon the exercise of any warrants, options and other rights outstanding at such time were converted at such time and that all options, warrants and similar rights to acquire shares of capital stock of such Person were exercised at such time.
Section 8.9.    Prepayment on Minimum Unsecured Debt Deficiency Without Make-Whole 
(a)    Notice of Minimum Unsecured Debt Deficiency.  In the event that any Minimum Unsecured Debt Deficiency shall exist, the Company may within ten Business Days after the occurrence of the Minimum Unsecured Debt Deficiency (the “Section 8.9 Prepayment Offer Deadline”) offer to prepay all, but not less than all, of the Notes.  
(b)    Offer to Prepay Notes.  The offer to prepay the Notes contemplated by paragraph (a) of this Section 8.9 shall be an offer to prepay, in accordance with and subject to this Section 8.9, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Section 8.9 Proposed Prepayment Date”).  The Section 8.9 Proposed Prepayment Date shall be not less than 30 days and not more than 90 days after the date of such offer (if the Section 8.9 Proposed Prepayment Date shall not be specified in such offer, the Section 8.9 Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of such offer).  
(c)    Rejection.  A holder of the Notes may accept the offer to prepay made pursuant to this Section 8.9 by causing a notice of such acceptance to be delivered to the Company not later than 15 days after receipt by such holder of the most recent offer of prepayment.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.9 shall be deemed to constitute a rejection of such offer by such holder.
(d)    Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.9 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to, but excluding, the date of prepayment, but without any Make-Whole Amount or any other premium.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(e)    Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.9 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying:
(i)    the Section 8.9 Proposed Prepayment Date;
(ii)    that such offer is made pursuant to this Section 8.9;
(iii)    the principal amount of each Note offered to be prepaid;
(iv)    the interest that would be due on each Note offered to be prepaid, accrued to, but excluding, the Section 8.9 Proposed Prepayment Date;
(v)    that the conditions of this Section 8.9 have been fulfilled; and
(vi)    in reasonable detail, the nature and amount of the Minimum Unsecured Debt Deficiency.
Section 8.10.    Prepayment on Below Investment Grade Event Without Make-Whole  
(a)    Notice of Below Investment Grade Event.  In the event that any Below Investment Grade Event shall exist, the Company may within ten Business Days after the occurrence of the Below Investment Grade Event (the “Section 8.10 Prepayment Offer Deadline”) offer to prepay all, but not less than all, of the Notes.
(b)    Offer to Prepay Notes.  The offer to prepay the Notes contemplated by paragraph (a) of this Section 8.10 shall be an offer to prepay, in accordance with and subject to this Section 8.10, the Notes held by each holder (in this case only, “holder” in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the “Section 8.10 Proposed Prepayment Date”).  The Section 8.10 Proposed Prepayment Date shall be not less than 30 days and not more than 90 days after the date of such offer (if the Section 8.10 Proposed Prepayment Date shall not be specified in such offer, the Section 8.10 Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of such offer).  
(c)    Rejection.  A holder of the Notes may accept the offer to prepay made pursuant to this Section 8.10 by causing a notice of such acceptance to be delivered to the Company not later than 15 days after receipt by such holder of the most recent offer of prepayment.  A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.10 shall be deemed to constitute a rejection of such offer by such holder.
(d)    Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.10 shall be at 100% of the principal amount of such Notes, together with interest on such Notes accrued to, but excluding, the date of prepayment, but without any Make-Whole Amount or any other premium.  

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(e)    Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.10 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying:
(i)    the Section 8.10 Proposed Prepayment Date;
(ii)    that such offer is made pursuant to this Section 8.10;
(iii)    the principal amount of each Note offered to be prepaid;
(iv)    the interest that would be due on each Note offered to be prepaid, accrued to, but excluding, the Section 8.10 Proposed Prepayment Date;
(v)    that the conditions of this Section 8.10 have been fulfilled; and
(vi)    in reasonable detail, the nature of the Below Investment Grade Event.
		
	SECTION 9.
	AFFIRMATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:
Section 9.1.    Compliance with Laws.  Without limiting Section 10.4, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Without limiting the foregoing, the Company will, and will cause its Subsidiaries to, conduct its business and other activities in compliance in all Material respects with the applicable provisions of the Investment Company Act and any applicable rules, regulations or orders issued by the SEC thereunder.
Section 9.2.    Insurance.  The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.
Section 9.3.    Maintenance of Properties.  The Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such 

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4.    Payment of Taxes and Claims.  The Company will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 
Section 9.5.    Corporate Existence, Etc.  Subject to Section 10.2, the Company will at all times preserve and keep its corporate existence in full force and effect.  Subject to Section 10.2, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6.    Books and Records.  The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be.  The Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets.  The Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue to maintain such system.
Section 9.7    Subsidiary Guarantors.  The Company will cause each of its Subsidiaries (other than Financing Subsidiaries and Foreign Subsidiaries) that (i) guarantees any Indebtedness under any Material Credit Facility for which the Company is a borrower or (ii) otherwise becomes liable at any time, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility for which the Company is a guarantor to concurrently therewith:
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(a)    enter into an agreement in form and substance satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (i) the prompt payment in full when due of all amounts payable by the Company pursuant to the Notes (whether for principal, interest, Make-Whole Amount or otherwise) and this Agreement, including, without limitation, all indemnities, fees and expenses payable by the Company thereunder and (ii) the prompt, full and faithful performance, observance and discharge by the Company of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be performed, observed or discharged by it (a “Subsidiary Guaranty”); and
(b)    deliver the following to each of holder of a Note:
(i)    an executed counterpart of such Subsidiary Guaranty;
(ii)    a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6, and 5.7 of this Agreement (but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);
(iii)    all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder; and 
(iv)    an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty as the Required Holders may reasonably request.
Section 9.8.    Rating Confirmation.  The Company covenants and agrees that, at its sole cost and expense, it shall cause to be maintained at all times a Rating from at least one NRSRO that indicates that it will monitor the rating on an ongoing basis.  No later than May 15 of each year (beginning May 15, 2017) the Company further covenants and agrees it shall provide a notice to each of the holders of the Notes sent in the manner provided in Section 18 with respect to all then current Ratings. 
Section 9.9.    Status of RIC and BDC.  The Company shall at all times, subject to applicable grace periods set forth in the Code, maintain its status as a RIC, and as a “business development company” under the Investment Company Act.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

		
	SECTION 10.
	NEGATIVE COVENANTS.

The Company covenants that so long as any of the Notes are outstanding:
Section 10.1.    Transactions with Affiliates.  The Company will not and will not permit any Subsidiary to enter into directly or indirectly any transaction or group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except (i) in the ordinary course and pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate, (ii) transactions otherwise permitted under this Agreement, (iii) transactions permitted under the Goldman Facility (whether or not the Goldman Facility remains outstanding) or the Replacement Facility, (iv) transactions with Affiliates that are set forth in Schedule 10.1, or (v) or a transaction that has been (A) approved by a majority of the independent directors of the Board of Directors of the Company and (B) consented to by the Required Holders (such consent not to be unreasonably withheld or delayed).
Section 10.2.    Fundamental Changes.  The Company will not, nor will it permit any of the Subsidiary Guarantors to, enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution).  The Company will not, nor will it permit any of the Subsidiary Guarantors to, convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its assets, whether now owned or hereafter acquired.
Notwithstanding the foregoing provisions of this Section:
(a)    any Subsidiary Guarantor may be merged or consolidated with or into the Company or any other Subsidiary Guarantor; provided that if any such transaction shall be between a Subsidiary Guarantor and a wholly owned Subsidiary Guarantor, the wholly owned Subsidiary Guarantor shall be the continuing or surviving corporation;
(b)    any Subsidiary Guarantor may convey, sell, lease, transfer or otherwise dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Company or any Subsidiary Guarantor;
(c)    the Obligors may convey, sell, transfer or otherwise dispose of all or substantially all of their assets (other than to a Financing Subsidiary) so long as after giving effect to such conveyance, sale, transfer or other disposition (and any concurrent acquisitions of Portfolio Investments or payment of outstanding Indebtedness), no Default or Event of Default hereunder or as defined under the Goldman Facility or the Replacement Facility shall have occurred or be continuing;
(d)    the Obligors convey, sell, transfer or otherwise dispose of all or substantially all of their assets to a Financing Subsidiary so long as after giving effect to such sale, transfer or other disposition (and any concurrent acquisitions of Portfolio Investments or payment of outstanding Indebtedness), no Default or Event of Default hereunder or as defined under the Goldman Facility or the Replacement Facility shall have occurred or be continuing and the Company delivers to the holders of the Notes a certificate of a Senior Financial Officer to such effect;

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	NOTE PURCHASE AGREEMENT

        

(e)    the Company may merge or consolidate with any other Person so long as (i) the Company is the continuing or surviving entity in such transaction and (ii) at the time thereof and after giving effect thereto, no Default or Event of Default shall have occurred or be continuing; and
(f)    the Company may merge or consolidate with any other Person, or convey, sell, lease, transfer, or otherwise dispose of all or substantially all of its assets, so long as: 
(i)    the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any state thereof (including the District of Columbia), and, if the Company is not such corporation or limited liability company, (A) such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes applicable to the Company, as appropriate, and (B) such corporation or limited liability company shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and 
(ii)    each Subsidiary Guarantor under any Subsidiary Guaranty that is outstanding at the time such transaction or each transaction in such a series of transactions occurs reaffirms its obligations under such Subsidiary Guaranty in writing at such time pursuant to documentation that is reasonably acceptable to the Required Holders; and
(iii)    immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.
Section 10.3.    Line of Business.  The Company will not engage in any business if, as a result, the general nature of the business in which the Company would then be engaged would be substantially changed from the general nature of the business in which the Company is engaged on the date of this Agreement as described in the Initial Disclosure Materials, other than in accordance with its Investment Policies.  
Section 10.4.    Terrorism Sanctions Regulations.  The Company will not and will not permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person or Canada Blocked Person), own or control a Blocked Person or Canada Blocked Person or any Person that is the target  of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions or Canadian Economic Sanctions Laws, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions or Canadian Economic Sanctions Laws.
    

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	NOTE PURCHASE AGREEMENT

        

Section 10.5.    Liens.  The Company will not to directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except Liens permitted under the Goldman Facility or the Replacement Facility.
Section 10.6.    Restricted Payments.  The Company will not, nor will it permit any Subsidiary Guarantor to, declare or make, or agree to declare, pay or make, directly or indirectly, any Restricted Payment, except that the Company may declare and pay a Restricted Payment if, in every such case, immediately after such transaction, (i) the Investment Company Act Asset Coverage would be achieved after deducting the amount of such Restricted Payment, (ii) such Restricted Payment would be permitted under the Goldman Facility or the Replacement Facility and (iii) no Default shall have occurred and be continuing or would result therefrom.
Section 10.7.    Certain Financial Covenants.
(a)    Minimum Shareholders’ Equity.  The Company will not permit Shareholders’ Equity at the last day of any fiscal quarter of the Company to be less than $390,481,875 plus 25% of the net proceeds of the sale of Equity Interests by the Company and its Subsidiaries after January 1, 2016. 
(b)    Asset Coverage Ratio.  The Company will not permit the Asset Coverage Ratio (i) immediately after giving effect to the sale of the Notes or (ii) as of the last Business Day of any fiscal quarter to be less than the Investment Company Act Asset Coverage. 
Section 10.8.    Most Favored Lender Status.  (a) If the Company or any Subsidiary Guarantor (i) is as of the date of this Agreement a party to a credit facility, loan agreement or other like financial instrument under which the Company or any Subsidiary Guarantor may incur Unsecured Debt in excess of $5,000,000 (an “Existing Credit Facility”), or (ii) after the date of this Agreement enters into any amendment or other modification of any Existing Credit Facility (an “Amended Credit Facility”) or (iii) enters into any new credit facility, whether with commercial banks or other Institutional Investors pursuant to a credit agreement, note purchase agreement or other like agreement after the date of this Agreement under which the Company or any Subsidiary Guarantor may incur Unsecured Debt in excess of $5,000,000 (in any such case, a “New Credit Facility”), that in any such case has on the date of this Agreement, or after the date of this Agreement results in, one or more additional or more restrictive MFL Provisions (whether constituting a financial covenant or an event of default) imposed on the Company or such Subsidiary Guarantor, as applicable, than those contained in this Agreement being contained in any such Existing Credit Facility, Amended Credit Facility or New Credit Facility, as the case may be (such additional or more restrictive MFL Provision or event of default, as the case may be, together with all definitions relating thereto, in the case of an Existing Credit Facility, including as amended by an Amended Credit Facility, the “Existing Facility Additional Provision(s)” and in the case of a New Credit Facility, the “New Facility Additional Provision(s)”), then the terms of this Agreement, without any further action on the part of the Company, any Subsidiary Guarantor or any of the holders of the Notes, will unconditionally be deemed on the effective date of such Amended Credit Facility or New Credit Facility, as the case may be, or the date hereof in the case of an Existing Credit Facility to be automatically amended to include the Existing Facility Additional Provision(s) or such New Facility Additional Provision(s), as the case may be, and imposed on the same party hereunder that is subject to such provision under the Existing Credit Facility, the Amended Credit 

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Facility, or the New Credit Facility, as applicable, and any event of default in respect of any such additional or more restrictive MFL Provision(s) so included herein shall be deemed to be an Event of Default under Section 11(c) (after giving effect to any grace or cure provisions under such Existing Facility Additional Provision(s) or such New Facility Additional Provision(s) or event of default), subject to all applicable terms and provisions of this Agreement, including, without limitation, all rights and remedies exercisable by the holders of the Notes hereunder.
(b)    If after the date of execution of any Amended Credit Facility or a New Credit Facility, as the case may be, any one or more of the Existing Facility Additional Provision(s) or the New Facility Additional Provision(s) is excluded, terminated, loosened, tightened, amended or otherwise modified under the corresponding Amended Credit Facility or New Credit Facility, as applicable, then and in such event any such Existing Facility Additional Provision(s) or New Facility Additional Provision(s) theretofore included in this Agreement pursuant to the requirements of this Section 10.8 shall then and thereupon automatically and without any further action by any Person be so excluded, terminated, loosened, tightened or otherwise amended or modified under this Section 10.8 to the same extent as the exclusion, termination, loosening, tightening of other amendment or modification thereof under the Amended Credit Facility or New Credit Facility; provided that if a Default or Event of Default shall have occurred and be continuing by reason of the Existing Facility Additional Provision(s) or the New Facility Additional Provision(s) at the time any such Existing Facility Additional Provision(s) or New Facility Additional Provision(s) is or are to be so excluded, terminated, loosened, tightened, amended or modified under this Section 10.8, the prior written consent thereto of the Required Holders shall be required as a condition to the exclusion, termination, loosening, tightening or other amendment or modification of any such Existing Facility Additional Provision(s) or New Facility Additional Provision(s), as the case may be; and provided, further, that in any and all events, the financial covenant(s) and related definitions or any event of default constituting any financial covenant and Events of Default contained in this Agreement as in effect on the date of this Agreement shall not in any event be deemed or construed to be excluded, terminated, loosened, relaxed, amended or otherwise modified by operation of the terms of this Section 10.8.
(c)    The Company shall from time to time, upon request by the Required Holders, promptly execute and deliver at its expense (including, without limitation, the reasonable and documented fees and expenses of one counsel for the holders of the Notes, taken as a whole) an amendment to this Agreement in form and substance reasonably satisfactory to the Required Holders evidencing that, pursuant to this Section 10.8, this Agreement then and thereafter includes, excludes, amends or otherwise modifies any Existing Facility Additional Provision(s) or New Facility Additional Provision(s), as the case may be; provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment.
    

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	NOTE PURCHASE AGREEMENT

        

(d)    The Company agrees that it will not, nor will it permit any Subsidiary or Affiliate to, directly or indirectly, pay or cause to be paid any consideration or remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any creditor of the Company, any co-obligor or any Subsidiary as consideration for or as an inducement to the entering into by any such creditor of any amendment, waiver or other modification to any Existing Credit Facility or New Credit Facility, as the case may be, the effect of which amendment, waiver or other modification is to exclude, terminate, loosen, tighten or otherwise amend or modify any Existing Facility Additional Provision(s) or New Facility Additional Provision(s), unless such consideration or remuneration is concurrently paid, on the same terms, ratably to the holders of all of the Notes then outstanding.
		
	SECTION 11.
	EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a)    the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b)    the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
(c)    the Company defaults in the performance of or compliance with any term contained in (i) Section 7.1(d) and such shall continue unremedied for a period of five or more days or (ii) Section 10 or any Existing Facility Additional Provisions or New Facility Additional Provisions; or
(d)    the Company or any Subsidiary Guarantor defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) or in any Subsidiary Guaranty and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or
    

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	NOTE PURCHASE AGREEMENT

        

(e)    (i) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made, or (ii) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor or by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing furnished in connection with such Subsidiary Guaranty proves to have been false or incorrect in any material respect on the date as of which made; or
(f)    (i) the Company or any Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Material Indebtedness beyond any period of grace provided with respect thereto, or (ii) the Company or any Significant Subsidiary is in default in the performance of or compliance with any term of any evidence of any Material Indebtedness or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Material Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Material Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time, other than with respect to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, and other than with respect to convertible debt that becomes due as a result of a conversion or redemption event, other than as a result of an “event of default” (as defined in the documents governing such convertible Material Indebtedness)), (x) the Company or any Significant Subsidiary has become obligated to purchase or repay Material Indebtedness before its regular maturity or before its regularly scheduled dates of payment, or (y) one or more Persons have the right to require the Company or any Significant Subsidiary so to purchase or repay such Material Indebtedness, in each case other than a default, event, or condition that relates to a Change in Control and with respect to which Section 8.8 applies; or
(g)    the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(h)    a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Subsidiaries and such petition shall not be dismissed within 60 days; or
(i)    one or more final judgments or orders for the payment of money aggregating in excess of $25,000,000, including, without limitation, any such final order enforcing a binding arbitration decision, are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or
(j)    any Subsidiary Guaranty shall cease to be in full force and effect, any Subsidiary Guarantor or any Person acting on behalf of any Subsidiary Guarantor shall contest in any manner the validity, binding nature or enforceability of any Subsidiary Guaranty, or the obligations of any Subsidiary Guarantor under any Subsidiary Guaranty are not or cease to be legal, valid, binding and enforceable in accordance with the terms of such Subsidiary Guaranty.
		
	SECTION 12.
	REMEDIES ON DEFAULT, ETC.

Section 12.1.    Acceleration.  (a)  If an Event of Default with respect to the Company described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
(b)    If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
(c)    If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 12.2.    Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or Subsidiary Guaranty, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3.    Rescission.  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of more than 50% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4.    No Waivers or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

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	NOTE PURCHASE AGREEMENT

        

		
	SECTION 13.
	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

Section 13.1.    Registration of Notes.  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
Section 13.2.    Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.
Section 13.3.    Replacement of Notes.  Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
(a)    in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(b)    in the case of mutilation, upon surrender and cancellation thereof,
within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
		
	SECTION 14.
	PAYMENTS ON NOTES.

Section 14.1.    Place of Payment.  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of Wells Fargo Bank, National Association in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
Section 14.2.    Home Office Payment.  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.
		
	SECTION 15.
	EXPENSES, ETC.

Section 15.1.    Transaction Expenses.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, any Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any Subsidiary Guaranty or the Notes, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and 

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	NOTE PURCHASE AGREEMENT

        

by the Notes and any Subsidiary Guaranty and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO, provided, that such costs and expenses under this clause (c) shall not exceed $3,500.  The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) and (ii) any and all wire transfer fees that any bank deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note.
Section 15.2.    Survival.  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Subsidiary Guaranty or the Notes, and the termination of this Agreement.
		
	SECTION 16.
	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, this Agreement, the Notes and any Subsidiary Guaranties embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

		
	SECTION 17.
	AMENDMENT  AND WAIVER.

Section 17.1.    Requirements.  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:
(a)    no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; and
(b)     no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or (y) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2 and Section 17.1(c)), 11(a), 11(b), 12, 17 or 20.
Section 17.2.    Solicitation of Holders of Notes.
(a)    Solicitation.  The Company will provide each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Subsidiary Guaranty.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 17 or any Subsidiary Guaranty to each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
(b)    Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary Guaranty or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.
(c)    Consent in Contemplation of Transfer.  Any consent given pursuant to this Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate of the Company in connection with such consent shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 17.3.    Binding Effect, etc.  Any amendment or waiver consented to as provided in this Section 17 or any Subsidiary Guaranty applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any holder of a Note and no delay in exercising any rights hereunder or under any Note or Subsidiary Guaranty shall operate as a waiver of any rights of any holder of such Note.
Section 17.4.    Notes Held by Company, Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty or the Notes, or have directed the taking of any action provided herein or in any Subsidiary Guaranty or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
		
	SECTION 18.
	NOTICES.

Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (with charges prepaid) or (d) by e-mail, provided, that upon request of any holder to receive paper copies of such notices or communications, the Company will promptly deliver such paper copies to such holder.  Any such notice must be sent:
(i)    if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,
(ii)    if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or
(iii)    if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer, or at such other address as the Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

		
	SECTION 19.
	REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
		
	SECTION 20.
	CONFIDENTIAL INFORMATION

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, personnel under contract, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any Subsidiary Guaranty.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to 

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 20.
In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.
		
	SECTION 21.
	SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (other than any entity that has elected to be regulated as a “business development company” under the Investment Company Act) (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.
		
	SECTION 22.
	MISCELLANEOUS.

Section 22.1.    Successors and Assigns.  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

Section 22.2.    Accounting Terms.  All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.  For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 - Fair Value Option, International Accounting Standard 39 - Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
Section 22.3.    Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4.    Construction, etc.  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
Section 22.5.    Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
Section 22.6.    Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
Section 22.7.    Jurisdiction and Process; Waiver of Jury Trial.  (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
    

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

(b)    The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c)    Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d)    THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

*    *    *    *    *

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

	
				
	 
	Very truly yours,
	 

	 
	 
	 
	 

	 
	NEW MOUNTAIN FINANCE CORPORATION
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	By:
	/s/ Shiraz Y. Kajee
	 

	 
	 
	     Name: Shiraz Y. Kajee
	 

	 
	 
	     Title:  Chief Financial Officer and Treasurer
	 

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	NEW MOUNTAIN FINANCE CORPORATION
	NOTE PURCHASE AGREEMENT

        

This Agreement is hereby
accepted and agreed to as 
of the date hereof.

	
				
	 
	SUN LIFE & HEALTH INSURANCE COMPANY
	 

	 
	 
	(U.S.)
	 

	 
	 
	 
	 

	 
	By:
	   /s/ Ann C. King
	 

	 
	 
	     Name: Ann C. King
	 

	 
	 
	     Title: Assistant Vice President and Senior Counsel
	 

	 
	 
	 
	 

	 
	By:
	   /s/ David Belanger
	 

	 
	 
	     Name: David Belanger
	 

	 
	 
	     Title: Managing Director
	 

	 
	 
	               Private Fixed Income
	 

	 
	 
	 
	 

	 
	SUN LIFE ASSURANCE COMPANY OF CANADA
	 

	 
	 
	 
	 

	 
	By:
	   /s/ Ann C. King
	 

	 
	 
	     Name: Ann C. King
	 

	 
	 
	     Title: Assistant Vice President and Senior Counsel
	 

	 
	 
	 
	 

	 
	By:
	   /s/ David Belanger
	 

	 
	 
	     Name: David Belanger
	 

	 
	 
	     Title: Managing Director
	 

	 
	 
	               Private Fixed Income
	 

                        

                        

‐47‐

DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
“Adjusted Interest Rate” is defined in Section 1.2(e).
“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Company, shall include any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests.  Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.  Notwithstanding anything herein to the contrary, the term “Affiliate” shall not include any Person that constitutes a Portfolio Investment.
“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Amended Credit Facility” is defined in Section 10.8.
“Anti-Corruption Laws” is defined in Section 5.16(d)(1).
“Anti-Money Laundering Laws” is defined in Section 5.16(c).
“Asset Coverage Ratio” means the ratio, determined on a consolidated basis for Company and its Subsidiaries, without duplication, of (a) the value of total assets of the Company and its Subsidiaries, less all liabilities and indebtedness not represented by senior securities, to (b) the aggregate amount of senior securities representing indebtedness of Company and its Subsidiaries (including this Agreement), in each case as determined pursuant to the Investment Company Act, and any orders of the Securities and Exchange Commission issued to or with respect to Company thereunder, including any exemptive relief granted by the Securities and Exchange Commission with respect to the indebtedness of any SBIC Subsidiary.
“Below Investment Grade Event” is defined in Section 1.2(f).
“Blocked Person” is defined in Section 5.16(a).
“Business Day” means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

SCHEDULE A 
(to Note Purchase Agreement)

“Canada Blocked Person” means (i) a “terrorist group” as defined for the purposes of Part II.1 of the Criminal Code (Canada), as amended or (ii) a Person identified in or pursuant to (x) Part II.1 of the Criminal Code (Canada), as amended or (y) regulations or orders promulgated pursuant to the Special Economic Measures Act (Canada), as amended, the United Nations Act (Canada), as amended, or the Freezing Assets of Corrupt Foreign Officials Act (Canada), as amended, in any case pursuant to this clause (ii) as a Person in respect of whose property or benefit a holder of Notes would be prohibited from entering into or facilitating a related financial transaction.
“Canadian Economic Sanctions Laws” means those laws, including enabling legislation, orders-in-council or other regulations administered and enforced by Canada or a political subdivision of Canada pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including Part II.1 of the Criminal Code (Canada), as amended, the Special Economic Measures Act (Canada), as amended, the United Nations Act (Canada), as amended, the Export and Import Permits Act (Canada), as amended, and the Freezing Assets of Corrupt Foreign Officials Act (Canada), as amended, and including all regulations promulgated under any of the foregoing, or any other similar sanctions program or action.
“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.
“Cash” means any immediately available funds in Dollars or in any currency other than Dollars (measured in terms of the Dollar Equivalent thereof) which is a freely convertible currency. 
“Change in Control” means (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), other than a Permitted Holder, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding shares of capital stock, membership interest or partnership interest, as applicable, in the External Manager or (ii) the Company shall cease to be managed by the External Manager or an Affiliate thereof. 
“CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment Act.
“Closing” is defined in Section 3.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
“Company” means New Mountain Finance Corporation, a Delaware corporation or any successor that becomes such in the manner prescribed in Section 10.2.

‐2‐

“Confidential Information” is defined in Section 20.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates. 
“Currency” means Dollars or any Foreign Currency.
“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Default Rate” means that rate of interest that is the greater of (i) 2% per annum above the rate of interest of the Notes then in effect or (ii) 2% over the rate of interest publicly announced by Wells Fargo Bank, National Association in New York, New York as its “base” or “prime” rate.
“Disclosure Documents” is defined in Section 5.3.
“Dollar Equivalent” means, on any date of determination, with respect to an amount denominated in any Foreign Currency, the amount of Dollars that would be required to purchase such amount of such Foreign Currency on the date two Business Days prior to such date, based upon the spot selling rate at which Wells Fargo Bank, National Association offers to sell such Foreign Currency for Dollars in the London foreign exchange market at approximately 11:00 a.m., London time, for delivery two Business Days later.
“Dollars” or “$” refers to lawful money of the United States of America.
“Egan-Jones” means Egan-Jones Ratings Co., or any successor thereto.
“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.
“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests or equivalents (however designated, including any instrument treated as equity for U.S. 

‐3‐

federal income tax purposes) in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 
“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.
“Event of Default” is defined in Section 11.
“Existing Credit Facility” is defined in Section 10.8.
“Existing Facility Additional Provisions” is defined in Section 10.8.
“External Manager” means New Mountain Finance Advisers BDC, L.L.C., a Delaware limited liability company.
“Family Member” means, with respect to any individual, any other individual having a relationship by blood (to the second degree of consanguinity), marriage, or adoption to such individual. 
“Family Trusts” means, with respect to any individual, trusts or other estate planning vehicles established for the primary benefit of such individual or Family Members of such individual and in respect of which such individual or a bona fide third party trustee serves as trustee or in a similar capacity. 
“Financing Subsidiary” means an SPE Subsidiary or an SBIC Subsidiary. 
“Foreign Currency” means at any time any Currency other than Dollars.
“Foreign Subsidiary” means any (a) direct or indirect Subsidiary of the Company that is organized under the laws of any jurisdiction other than the United States or its territories or possessions and that is treated as a corporation for United States federal income tax purposes, (b) direct or indirect Subsidiary of the Company which is a “controlled foreign corporation” within the meaning of the Code or (c) direct or indirect Subsidiary that is disregarded as an entity that is separate from its owner for United States federal income tax purposes and substantially all of its assets consist of the Capital Stock of one or more direct or indirect Foreign Subsidiaries. 
“Form 10-K” is defined in Section 7.1(b).
“Form 10-Q” is defined in Section 7.1(a).
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.

‐4‐

“Goldman Facility” means that certain senior secured revolving credit facility dated as of June 4, 2014, as the same may be amended or amended and restated from time to time, by and among the Company, as borrower, Goldman Sachs Bank USA, as administrative agent, syndication agent, and lender, and the lenders from time to time party thereto.
“Governmental Authority” means
(a)    the government of
(i)    the United States of America or any state or other political subdivision thereof, or
(ii)    any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or
(b)    any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:
(a)    to purchase such indebtedness or obligation or any property constituting security therefor;
(b)    to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;
(c)    to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or
(d)    otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

‐5‐

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.  
“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange protection agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. 
“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
“INHAM Exemption” is defined in Section 6.2(e).
“Indebtedness” with respect to any Person means, at any time, without duplication,
(a)    its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;
(b)    its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);
(c)    (i) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all liabilities which would appear on its balance sheet in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were accounted for as Capital Leases;
(d)    all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);

‐6‐

(e)    all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money);
(f)    the aggregate Swap Termination Value of all Swap Contracts of such Person; and
(g)    any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.  
Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.
“Initial Disclosure Materials” is defined in Section 5.3.
“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.
“Investment” means, for any Person: (a) Equity Interests, bonds, notes, debentures or other securities of any other Person or any agreement to acquire any Equity Interests, bonds, notes, debentures or other securities of any other Person (and any rights or proceeds in respect of (x) any “short sale” of securities or (y) any sale of any securities at a time when such securities are not owned by such Person); (b) deposits, advances, loans or other extensions of credit made to any other Person (including purchases of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); or (c) Hedging Agreements.
“Investment Company Act” means the Investment Company Act of 1940, and the rules and regulations promulgated thereunder and all exemptive relief, if any, obtained by the Company thereunder, as the same may be amended from time to time.
“Investment Company Act Asset Coverage” means the minimum asset coverage required to be held by the Company to comply with the Investment Company Act.
“Investment Grade” means a rating of at least “BBB-” or higher by S&P or its equivalent by any other NRSRO.
“Investment Policies” means, with respect to the Company, the investment objectives, policies, restrictions and limitations as the same may be changed, altered, expanded, amended, modified, terminated or restated from time to time.

‐7‐

“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Make-Whole Amount” is defined in Section 8.6.
“Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company and its Subsidiaries (other than Financing Subsidiaries) taken as a whole.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries (other than Financing Subsidiaries) taken as a whole (excluding in any case a decline in the net asset value of the Company or a change in general market conditions or values of the Portfolio Investments), (b) the ability of the Company to perform its obligations under this Agreement and the Notes, (c) the ability of any Subsidiary Guarantor to perform its obligations under its Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Notes or any Subsidiary Guaranty.
“Material Credit Facility” means, as to the Company and its Subsidiaries, 
(a)    the Goldman Facility or the Replacement Facility, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and
(b)    any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the date of Closing by the Company or any Subsidiary (other than a Financing Subsidiary or Foreign Subsidiary), or in respect of which the Company or any Subsidiary (other than a Financing Subsidiary or Foreign Subsidiary) is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”), in a principal amount outstanding or available for borrowing equal to or greater than $10,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency); and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a Material Credit Facility.  
“Material Indebtedness” means (a) Indebtedness (other than Hedging Agreements), of any one or more of the Company and its Subsidiaries in an aggregate principal amount exceeding $25,000,000 and (b) obligations in respect of one or more Hedging Agreements under which the maximum aggregate amount (giving effect to any netting agreements) that the Company and its Subsidiaries would be required to pay if such Hedging Agreement(s) were terminated at such time would exceed $25,000,000.
“Maturity Date” is defined in the first paragraph of each Note.

‐8‐

“MFL Provision” means any (a) covenant (whether constituting a covenant or an event of default) that requires the Company or any Subsidiary to (i) maintain any level of financial performance (including without limitation, any specified level of net worth, total assets, cash flows or net income, however expressed), (ii) maintain any relationship of any component of its capital structure to any other component thereof (including, without limitation, the relationship of indebtedness, senior indebtedness or subordinated indebtedness to total capitalization or to net worth, however expressed), (iii) maintain any measure of its ability to service its indebtedness (including, without limitation, exceeding any specified ratio of revenues, cash flow or income to interest expense, rental expense, capital expenditures and/or scheduled payments of indebtedness, however expressed) or (iv) not to exceed any maximum level of indebtedness, however expressed; or (b) threshold in any “cross-default”, “cross acceleration” or “judgment” event of default.
“Minimum Unsecured Debt Deficiency” means a condition at any date when the aggregate outstanding principal amount of Unsecured Debt is less than $150,000,000; provided that to the extent any Unsecured Debt outstanding on the date of this Agreement has been converted into Equity Interests in the Company and such Equity Interests have not been purchased, redeemed, retired, acquired, cancelled or terminated by the Company, such “$150,000,000” shall be reduced by the amount so converted. 
“NAIC” means the National Association of Insurance Commissioners or any successor thereto.
“Notes” is defined in Section 1.
“NRSRO” means a Nationally Recognized Statistical Rating Organization so designated by the SEC whose status has been confirmed by the SVO.
“Obligors” means, collectively, the Company and the Subsidiary Guarantors.
“OFAC” is defined in Section 5.16(a).
“OFAC Listed Person” is defined in Section 5.16(a).
“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

‐9‐

“Permitted Holders” means New Mountain Capital, LLC (or any Affiliate thereof), senior management and employees of New Mountain Capital, LLC and its Subsidiaries (in each case, as of the date hereof) and their Family Members and their Family Trusts. 
“Permitted SBIC Guaranty” means a guarantee by the Company of Indebtedness of an SBIC Subsidiary on the SBA’s then applicable form, provided that the recourse to the Company thereunder is expressly limited only to periods after the occurrence of an event or condition that is an impermissible change in the control of such SBIC Subsidiary (it being understood that, as provided in paragraph (l) of Section 11, it shall be an Event of Default hereunder if any such event or condition giving rise to such recourse occurs).  
“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
“Portfolio Investment” means (i) any Investment held by the Company or one of its Subsidiaries in their asset portfolio and (ii) any investment held by the Company or one of its Subsidiaries that is listed on the Company’s consolidated Schedule of Investments included in any filing with the SEC (or, for investments made during a given quarter and before a consolidated Schedule of Investments is filed with respect to the end of such quarter, will be listed on the Company’s consolidated Schedule of Investments to be filed with the SEC with respect to the end of such quarter during which the Investment is made), including, without limitation, any such Schedule of Investments filed (or to be filed) with any of the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, registration statements, or prospectuses.
“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.
“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
“PTE” is defined in Section 6.2(a).
“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of 

‐10‐

a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.
“QPAM Exemption” is defined in Section 6.2(d). 
“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.
“Rating” means the public unsecured, long-term issuer rating of the Company issued by a NRSRO or a public rating issued by a NRSRO of any Unsecured Debt of the Company, including the Notes.
“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.
“Replacement Facility” means at any time on or after the Goldman Facility is expired or terminated, the senior secured credit facility or similar secured loan agreement to which the Company is a party as borrower and pursuant to which substantially all of the Company’s assets, other than investments in Subsidiaries, are pledged. 
“Required Holders” means at any time on or after the Closing, the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).
“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any shares of any class of capital stock of the Company or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such shares of capital stock of the Company or any option, warrant or other right to acquire any such shares of capital stock of the Company (it being understood that none of: (w) the conversion features under convertible notes; (x) the triggering and/or settlement thereof; or (y) any cash payment made by the Company in respect of partial shares relating thereto, shall constitute a Restricted Payment hereunder). 
“RIC” means a person qualifying for treatment as a “regulated investment company” under the Code. 
“SBA” means the United States Small Business Administration. 
“SBIC Equity Commitment” means a commitment by the Company to make one or more capital contributions to an SBIC Subsidiary.

‐11‐

“SBIC Subsidiary” means any direct or indirect Subsidiary (including such Subsidiary’s general partner or managing entity to the extent that  the only material asset of such general partner or managing entity is its equity interest in the SBIC Subsidiary) of the Company licensed as a small business investment company under the Small Business Investment Act of 1958, as amended, (or that has applied for such a license and is actively pursuing the granting thereof by appropriate proceedings promptly instituted and diligently conducted) and which is designated by the Company (as provided below) as an SBIC Subsidiary, so long as (a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such Subsidiary: (i) is Guaranteed by the Company or any Subsidiary (other than a Permitted SBIC Guaranty), (ii) is recourse to or obligates the Company or any Subsidiary in any way (other than in respect of any SBIC Equity Commitment or Permitted SBIC Guaranty), or (iii) subjects any property of the Company or any Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than Equity Interests in any SBIC Subsidiary pledged to secure such Indebtedness, and (b) none of the Company or any Subsidiary has any obligation to maintain or preserve such Subsidiary’s financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Company shall be effected pursuant to a certificate of a Financial Officer delivered to the holders of the Notes, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions.  
“S&P” means Standard & Poor’s Ratings Group, and any successor thereto.
“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.
“Section 8.8 Proposed Prepayment Date” is defined in Section 8.8(c).
“Section 8.9 Prepayment Offer Deadline” is defined in Section 8.9.
“Section 8.9 Proposed Prepayment Date” is defined in Section 8.9(b).
“Section 8.10 Prepayment Offer Deadline” is defined in Section 8.10.
“Section 8.10 Proposed Prepayment Date” is defined in Section 8.10(b).
“Securities” or “Security” shall have the meaning specified in section 2(a)(1) of the Securities Act. 
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

‐12‐

“Shareholders’ Equity” means, at any date, the amount determined on a consolidated basis, without duplication, in accordance with GAAP, of shareholders’ equity or net assets, as applicable, for the Company and its Subsidiaries at such date. 
“Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (within the meaning specified in Rule 1-02(w) of Regulation S-X, promulgated under the Securities Act) of the Company, excluding any Subsidiary of the Company which is (a) a nonrecourse or limited recourse subsidiary, (b) a bankruptcy remote special purpose vehicle, (c) that is not consolidated with the Company for purposes of GAAP, or (d) any Financing Subsidiary; provided that each Subsidiary Guarantor shall be deemed to be a “Significant Subsidiary.
“Source” is defined in Section 6.2. 
“SPE Subsidiary” means a direct or indirect Subsidiary of the Company to which any Obligor sells, conveys or otherwise transfers (whether directly or indirectly) Portfolio Investments, which engages in no material activities other than in connection with the purchase or financing of such assets and other portfolio investments and which is designated by the Company (as provided below) as an SPE Subsidiary:
(a)    no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is Guaranteed by any Obligor (other than Guarantees in respect of Standard Securitization Undertakings), (ii) is recourse to or obligates any Obligor in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings or any Guaranty thereof,
(b)    with which no Obligor has any material contract, agreement, arrangement or understanding other than on fair and reasonable terms no less favorable to such Obligor than those that might be obtained at the time in comparable arm’s length transactions with Persons that are not Affiliates of any Obligor, other than fees payable in the ordinary course of business in connection with servicing receivables, and
(c)    to which no Obligor has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Company shall be effected pursuant to a certificate of a Financial Officer delivered to the holders of the Notes, which certificate shall include a statement to the effect that, to the best of such officer’s knowledge, such designation complied with the foregoing conditions.  Each Subsidiary of an SPE Subsidiary shall be deemed to be an SPE Subsidiary and shall comply with the foregoing requirements of this definition. 
“Standard Securitization Undertakings” means, collectively, (a) customary arm’s-length servicing obligations (together with any related performance guarantees), (b) obligations (together with any related performance guarantees) to refund the purchase price or grant purchase price credits 

‐13‐

for dilutive events or misrepresentations (in each case unrelated to the collectability of the assets sold or the creditworthiness of the associated account debtors) and (c) representations, warranties, covenants and indemnities (together with any related performance guarantees) of a type that are reasonably customary in accounts receivable securitizations.  Representations made at the time of transfer of an asset to an SPE Subsidiary as to the creditworthiness of the account debtor at such time and that to the transferor’s knowledge, no event has occurred and is continuing that could reasonably be expected to affect the collectability of such asset or cause it not to be paid in full, and any associated repurchase obligation for breach of any such representation, shall be deemed to be Standard Securitization Undertakings.
“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries).  Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a Subsidiary Guaranty.
“Subsidiary Guaranty” is defined in Section 9.7(a).
“Substitute Purchaser” is defined in Section 21.
“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.
“Swap Contract” means (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options, spot contracts or any other similar transactions or any of the foregoing (including, without limitation, any options to enter into any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market 

‐14‐

values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.
“Synthetic Lease” means, at any time, any lease (including leases that may be terminated by the lessee at any time) of any property (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.
“Unsecured Debt” means Indebtedness of the Company with a final maturity greater than one year from the date of determination outstanding at any time that is not secured in any manner by any Lien on assets of the Company or any of its Subsidiaries.  
“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“U.S. Economic Sanctions” is defined in Section 5.16(a).
“U.S. Government Securities” means securities that are direct obligations of, and obligations the timely payment of principal and interest on which is fully guaranteed by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America and in the form of conventional bills, bonds, and notes.

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

‐15‐

[FORM OF NOTE]
NEW MOUNTAIN FINANCE CORPORATION
5.313% SENIOR NOTE DUE MAY 15, 2021
	
		
	No. [_____]
	[Date]

	$[_______]
	PPN: 647551 A* 1

FOR VALUE RECEIVED, the undersigned, NEW MOUNTAIN FINANCE CORPORATION (herein called the “Company”), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] Dollars (or so much thereof as shall not have been prepaid) on May 15, 2021 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of (a) subject to adjustment pursuant to Section 1.2 of the hereinafter defined Note Purchase Agreement, 5.313% per annum from the date hereof, payable semiannually, on the 15th day of May and November in each year, commencing with the November 15, 2016 next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Note Purchase Agreement).
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at Wells Fargo Bank, National Association at its offices in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of May 4, 2016 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

SCHEDULE 1 
(to Note Purchase Agreement)

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.  
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

	
				
	 
	NEW MOUNTAIN FINANCE CORPORATION
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	By:
	 
	 

	 
	 
	     Title
	 

                        

‐2‐

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