Document:

Exhibit

EXHIBIT 10.1

SEVERANCE AND CHANGE IN CONTROL AGREEMENT

This Severance and Change in Control Agreement (the "Agreement") is made and entered into by and between Bradley Ringwald ("Executive") and First Financial Bank (the "Company"), effective as of the Closing date of the Merger of MainSource Financial Group, Inc. (“MSFG”) with and into First Financial Bancorp., the parent organization of the Company (“FFBC”), pursuant to the Agreement and Plan of Merger between MSFG and FFBC dated July 25, 2017  (the "Effective Date").

RECITALS

		
	1.
	The Board of Directors of the Company (the "Board") recognizes that it is possible that the Company could terminate Executive's employment with the Company and from time to time the Company may consider the possibility of an acquisition by another company or other change in control transaction.  The Board also recognizes that such considerations can be a distraction to Executive and can cause Executive to consider alternative employment opportunities.  The Board has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of such a termination of employment or the occurrence of a Change in Control (as defined herein) of the Company.

		
	2.
	The Board believes that it is in the best interests of the Company and its shareholders to provide Executive with an incentive to continue his or her employment with the Company and to motivate Executive to maximize the value of the Company for the benefit of its shareholders.

		
	3.
	The Board believes that it is imperative to provide Executive with certain severance benefits upon Executive's termination of employment and with certain additional benefits following a Change in Control.  These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change in Control.

		
	4.
	The Company and Executive wish to terminate any and all rights and obligations the Company and/or Executive had under any prior employment, severance practices or change in control agreement in exchange for this Agreement.

		
	5.
	Certain capitalized terms used in the Agreement, and not otherwise defined, are defined in Section 8 below.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Company and Executive (each, the “Party,” and together, the “Parties”) hereto agree as follows:

		
	1.
	Term of Agreement.  This Agreement is expressly conditioned upon the successful completion of the merger of MainSource Financial Group, Inc. with and into First Financial Bancorp. (the “Merger”) as described in the Agreement and Plan of Merger between the parties dated July 25, 2017.  

Provided the above condition is satisfied, the Initial Term of this Agreement will begin on the day immediately following consummation of the Merger and continue until April 30, 2019 (the “Initial Term”), unless sooner terminated pursuant to Section 3 of this Agreement.  The term of this Agreement shall renew automatically for successive one-year periods after the Initial Term (the “Renewal Terms”), unless and until non-renewed by either the Company or Executive upon not less than ninety (90) days’ prior written notice given by either party prior to the end of the Initial Term or 

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any Renewal Term, as applicable (it being understood that non-renewal of this Agreement shall not result in a termination of employment unless the party providing such notice of non-renewal also specifies in such notice that Executive’s employment shall terminate at the expiration of the then-current term pursuant to Section 3 of this Agreement).  The Initial Term and all Renewal Terms, if any, shall constitute the “Term.”  Notwithstanding the foregoing, in the event of the consummation of a “Change in Control” of the Company (as defined below), the Term shall be the one-year period following the consummation of such Change in Control, without the possibility of non-renewal.  For purposes of this Agreement, a “Change in Control” has the meaning given such term in the Company’s Amended and Restated 2012 Stock Plan, or any stock plan intended to succeed the Amended and Restated 2012 Stock Plan, as in effect on the Effective Date.

		
	2.
	At-Will Employment.  The Company and Executive acknowledge that Executive's employment is and will continue to be at-will, as defined under applicable law.  If Executive's employment terminates for any reason, including (without limitation) any termination of employment not set forth in Section 3, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses or pursuant to written agreements with the Company, including equity award agreements.

		
	3.
	Severance Benefits.

		
	a)
	Termination Without Cause and not in Connection with a Change in Control.  If the Company terminates Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled (as defined below) or Executive's death at any time (other than in connection with a Change in Control which is exclusively governed by Section 3(b) of the Agreement), then, subject to the terms of this Agreement, Executive will receive the following payments and benefits at the times specified below:

		
	i.
	Severance Payments.  Executive will receive severance in an amount equal to 24 months of Executive's base salary as in effect immediately prior to the date of Executive's termination of employment, less all required tax withholdings and other applicable deductions, payable in equal installments over the Restricted Period in accordance with Section 3(f). Notwithstanding the foregoing, the Company in its sole and absolute discretion may accelerate any installment payment or portion thereof to be paid on any date prior to the date the installment payment would otherwise be paid, subject to the limitations of Section 6.

		
	ii.
	Termination Short-Term Bonus Payment.  Executive shall be entitled to an annual bonus for the year of termination determined in accordance with the following:

		
	A.
	In the event Executive is a Covered Executive (for purposes of Section 162(m) of the Code) for the year of his or her termination of employment or, as determined in the sole discretion of the Company, would have been a Covered Executive for such year if he or she had continued employment until the end of the year, then to the extent necessary to ensure the deductibility of compensation otherwise payable to Executive under the Company’s annual short term incentive plan, Executive shall receive a lump sum severance payment equal to the lesser of (x) 2 times the Executive’s target annual short-term incentive plan bonus or (y) 2 times the average of the three most recent actual annual bonus awards paid (or payable) to Executive by the Company, or the average actual annual bonus payouts for such lesser number of completed performance years for which Executive was eligible to receive an annual bonus). 

 
		
	B.
	For any year in which the preceding paragraph A does not apply, in lieu of the amount otherwise payable to Executive under paragraph A, Executive shall receive a  

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payment equal to 2 times Executive's target annual short-term incentive plan bonus as in effect for the fiscal year in which Executive's termination occurs (or the target annual short-term incentive plan bonus that is in effect for the previous year if the target bonus for the current year is not ratified/approved by the compensation committee of the Board of Directors as of Executive’s termination of employment).  

		
	C.
	Such amount shall be paid following Executive’s termination of employment, but in no event later than March 15th of the year following the year of Executive’s termination of employment.

		
	iii.
	Continued Executive Benefits.  If the Company’s severance practices of general applicability at the time of Executive’s date of termination provides for continued payment by the Company of all or a portion of the cost of the premiums for continuation coverage under the Company’s health care plan pursuant to Section 4980B of the Code (“COBRA Coverage”) and if the Executive timely and properly elects such COBRA Coverage, the Company shall pay on the Executive’s behalf the difference between the monthly COBRA Coverage premium paid by the Executive for himself and his dependents and the monthly premium amount paid by similarly situated active employees for the same coverage. Such reimbursement shall be paid directly to the COBRA Coverage administrator (if any) and shall be treated as a taxable benefit to the Executive. The Executive shall be eligible to receive such reimbursement until the earliest of: (a) the twelve-month anniversary of the Executive’s termination of employment; (b) the date the Executive is no longer eligible to receive COBRA Coverage; or (c) the date on which the Executive otherwise becomes eligible to receive substantially similar coverage from another employer.  The Company reserves the right to modify or terminate the COBRA Coverage benefit provided hereunder to the extent necessary to comply with applicable law.  

		
	iv.
	During the one‐year period following the date of termination, Executive shall be entitled to full executive outplacement assistance with an agency selected by the Company with the fee paid by the Company in an amount not to exceed five percent (5%) of Executive’s base salary (“Outplacement Assistance”).

		
	v.
	Except as expressly provided in this Section 3(a) and in Section 3(e) below, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the Company’s termination of Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death at any time (other than in connection with a Change in Control under which is exclusively governed by Section 3(b) of the Agreement).  Under no circumstances will Executive be entitled to benefits under both Section 3(a) and Section 3(b) of this Agreement.

		
	b)
	Termination Without Cause or Resignation for Good Reason in Connection with a Change in Control.  If, immediately prior to a Change in Control (as determined in the sole discretion of the Company) or during the one year period that commences upon a Change in Control, (x) the Company terminates Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death, or (y) Executive resigns from such employment for Good Reason, then, subject to the terms of this Agreement, Executive will receive the following severance benefits from the Company, in lieu of the benefits described in Section 3(a) above:

		
	i.
	Severance Payments.  Executive will receive severance in an amount equal to 24 months of Executive's base salary as in effect immediately prior to the date of Executive's termination of employment, less all required tax withholdings and other applicable deductions, payable in equal installments in accordance with Section 3(f). Notwithstanding the foregoing, the Company or its successor in its sole and absolute discretion may accelerate any installment 

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payment or portion thereof to be paid on any date prior to the date the installment payment would otherwise be paid, subject to the limitations of Section 6.

		
	ii.
	Short-Term Bonus Payment.  Executive will receive a lump sum severance payment equal to 2 times Executive's full target annual short-term incentive plan bonus as in effect for the fiscal year in which Executive's termination occurs (or, if greater, as in effect for the fiscal year in which the Change in Control occurs), less all required tax withholdings and other applicable deductions.  Such amount shall be paid following Executive’s termination of employment, but in no event later than March 15th of the year following the year of Executive’s termination of employment.

		
	iii.
	Continued Executive Benefits.  COBRA Coverage as described in Section 3(a)(iii) of this Agreement.

		
	iv.
	Outplacement Assistance as described in Section 3(a)(iv) of this Agreement.

		
	v.
	Except as expressly provided in this Section 3(b) and in Section 3(e) below, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the Company’s termination of Executive's employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive's death or Executive resigns from such employment for Good Reason where such separation of employment occurs immediately prior to a Change in Control (as determined in the sole discretion of the Company) or during the one year period that commences upon a Change in Control.  Under no circumstances will Executive be entitled to benefits under both Section 3(a) and Section 3(b) of this Agreement. 

		
	c)
	Termination Due to Executive’s Death or Disability, Termination by the Company for Cause or Voluntary Termination by Executive.  If, during the Term, Executive’s employment is terminated: (1) by reason of Executive’s death or Disability, (2) by the Company for Cause; or (3) voluntarily by Executive, the Company’s obligations to Executive shall be limited to the payment of the Accrued Obligations, as defined below, and the timely payment or provision of the Other Benefits, as defined below.  The Accrued Obligations shall be paid to Executive or his estate or beneficiary in the event of his death, as applicable, in a lump sum in cash within thirty (30) days of the date of termination.  Other than the Accrued Obligations and Other Benefits, Executive shall have no right to receive any compensation or other benefits as a result of or in connection with the termination of his employment with the Company due to death or Disability, by the Company for Cause, or by resignation by Executive.   

		
	d)
	Cessation of Payments and Benefits.  Notwithstanding any other provision of this Agreement to the contrary, the obligation of the Company to pay or provide the benefits under Sections 3(a) and 3(b) shall automatically and immediately terminate upon a breach by Executive of this Agreement, including without limitation a breach of Executive’s obligations under Section 5, other than an immaterial and inadvertent breach of any provision other than those set forth in Section 5 that is discontinued and/or remedied (to the extent subject to cure) by Executive promptly to the Company’s satisfaction.

		
	e)
	Accrued Obligations and Other Benefits.  Upon Executive’s separation of employment for any reason, the Company shall pay: (1) Executive’s accrued and unpaid Base Salary through the date of termination, to the extent not theretofore paid (the “Accrued Obligations”), which payments shall not be subject to the Release and shall be paid within thirty (30) days of the date of termination; and (2) any other benefits (other than benefits under any severance or termination 

4

pay plan of the Company or the Affiliated Companies) that are otherwise required to be provided to Executive or to which Executive is otherwise eligible to receive through the date of termination under the terms of the applicable Company plan shall be provided to Executive consistent with the terms of the applicable Company plan (the “Other Benefits”).  Such payment of the Other Benefits shall not be subject to the Executive’s execution of the Release unless otherwise called for in the applicable governing Company plan.

		
	f)
	Timing of Payments.  Subject to any specific timing provisions in Section 3(a), 3(b), or 7 as applicable, payment of severance under this Section 3 shall be made or commence to be made as soon as practicable following Executive's termination of employment in equal installments (no less frequently than monthly) in accordance with the Company’s general policies and procedures for the payment of salaries to its executive officers.

		
	g)
	Full Settlement.  Except as expressly provided in this Section 3, Executive shall have no right to receive any compensation or other benefits under this Agreement as a result of or in connection with the termination of this Agreement or the termination of Executive’s employment with the Company.  If the Company has other severance programs or plans in place during the Term, Executive shall not be eligible for benefits under any such programs or plans.  

		
	4.
	Conditions to Receipt of Severance.  Executive agrees that in order to receive the benefits provided in Section 3(a) or Section 3(b) (as applicable, the “Severance Benefits”):

		
	a)
	Executive must execute and not thereafter revoke his signature to a general release in a form provided by and acceptable to the Company (the “Release”) by the deadline set by the Company for the return of the Release.  The Company will set a deadline for return of the Release (the “Release Deadline”) that will be no later than 60 days following the termination of employment.  If the termination of employment occurs at a time during the calendar year where the Release Deadline could occur in the calendar year following the calendar year in which Executive's termination of employment occurs, then any severance payments or benefits under this Agreement that are not exempt from Section 409A will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or such later time as required by (i) the payment schedule applicable to each payment or benefit as set forth in Section 3, (ii) the date the Release becomes effective, or (iii) Section 6; provided that the first payment shall include all amounts that would have been paid to Executive if payment had commenced on the date of Executive's termination of employment.

		
	b)
	The Executive shall comply with requirements of Section 5 both during and after his or her employment.  

		
	5.
	Non-Competition, Non-Solicitation, Confidential Information.  

		
	a)
	Non‐competition. During the term of Executive’s employment and during the first six-months of the Restricted Period (as defined below), other than following a termination by the Company for Cause (as defined below) in which case this Section 5(a) shall be inapplicable, Executive shall not directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for the Company), enter into, engage in, or promote or assist (financially or otherwise), directly or indirectly, any business which provides any commercial banking, savings banking, mortgage lending, or any similar lending or banking services (the “Restricted Services”) anywhere in the geographic area consisting of any county in which any of the Affiliated Companies operate banking offices at any time during the Executive's employment with the Company or any Affiliated 

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Companies. (the “Restricted Territory”).  Notwithstanding the foregoing, ownership, for personal investment purposes only, of 1% or less of the outstanding capital stock of a publicly traded Company shall not constitute a violation hereof.
		
	b)
	Non‐solicitation of Clients.  During the Executive's employment with the Company or any Affiliated Companies (as defined below) and for a period of 24 months after Executive is no longer employed by any Affiliated Companies (the “Restricted Period”), Executive shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for the Company or any Affiliated Companies):

		
	(i)
	Solicit or attempt in any manner to persuade any Client of any Affiliated Company to cease to do business, to refrain from doing business or to reduce the amount of business which any Client has customarily done or contemplates doing with any of the Affiliated Companies; or

		
	(ii)
	Interfere with or damage (or attempt to interfere with or damage) any relationship between any Affiliated Company and any Client.

		
	c)
	Non‐solicitation of Employees; No Hire.  During the Executive's employment with the Company or any Affiliated Companies and for a period of one year after Executive is no longer employed by the Company or any Affiliated Companies, Executive shall not, directly or indirectly, whether individually or as a shareholder or other owner, partner, member, director, officer, employee, independent contractor, creditor or agent of any person (other than for any Affiliated Company):

		
	(i)
	Solicit any employee, officer, director, agent or independent contractor of any Affiliated Company to terminate his or her relationship with, or otherwise refrain from rendering services to, any Affiliated Company, or otherwise interfere or attempt to interfere in any way with any Affiliated Company's relationship with any of its employees, officers, directors, agents or independent contractors; or

		
	(ii)
	Hire, attempt to hire, employ or engage any person who, at any time within the two-year period immediately preceding such hire, or attempt to hire, employment or engagement, was an employee, officer or director of any Company or Affiliated Company.

		
	d)
	Non-disclosure of Confidential Information.  

		
	(i)
	During Executive's employment with Company or any Affiliated Company and after the termination of such employment for any reason, Executive shall not, without the prior written consent of the General Counsel of Company (or such person's designee) or as may be otherwise required by law or legal process, communicate or divulge any Confidential Information to any person or entity other than Company or an Affiliated Company, their employees, and those designated by Company or an Affiliated Company, or use any Confidential Information except for the benefit of Company or an Affiliated Company.  Upon service to Executive of any subpoena, court order or other legal process requiring Executive to disclose Confidential Information, Executive shall immediately provide written notice to Company of such service and the content of any Confidential Information to be disclosed. 

		
	(ii)
	Immediately upon the termination of Executive's employment with Company or an Affiliated Company for any reason, Executive shall return to Company or the applicable Affiliated Company all Confidential Information in Executive's possession, including but 

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not limited to any and all copies, reproductions, notes, or extracts of Confidential Information in paper or electronic form. 

		
	e) 
	Non‐disparagement.  Executive shall not, directly or indirectly, at any time (whether during Executive’s employment or thereafter), make any public statement (oral or written), or take any other action, that is disparaging to any Affiliated Company.  This Agreement shall not preclude Executive from making truthful statements to correct any false statements made by any Affiliated Company or any person acting on behalf thereof about Executive or prohibit Executive from reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity, including but not limited to the U.S. Department of Justice or the U.S. Securities and Exchange Commission, or from participating in any investigation by such governmental agency or entity.

		
	f) 
	Enforcement; Remedies; Blue Pencil.  Executive acknowledges that:  (1) the various covenants, restrictions, and obligations set forth in this Section 5 are separate and independent obligations, and may be enforced separately or in any combination; (2) the provisions of this Section 5 are fundamental and essential for the protection of the Company’s and the Affiliated Companies’ legitimate business and proprietary interests, and the Affiliated Companies (other than the Company) are intended third-party beneficiaries of such provisions; (3) such provisions are reasonable and appropriate in all respects and impose no undue hardship on Executive; and (4) in the event of any violation by Executive of any of such provisions, the Company and, if applicable, the Affiliated Companies, will suffer irreparable harm and their remedies at law may be inadequate.  In the event of any violation or attempted violation of any provision of this Section 5 by Executive, the Company and the Affiliated Companies, or any of them, as the case may be, shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief, without any showing of irreparable harm or damage or the posting of any bond, in addition to any other rights or remedies that may then be available to them, including, without limitation, money damages and the cessation of the payments contemplated under Section 3.  If any of the covenants set forth in this Section 5 is finally held to be invalid, illegal or unenforceable (whether in whole or in part), such covenant shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining such covenants shall not be affected thereby.

6.     Section 409A of the Code.

		
	a.
	Although the Company does not guarantee the tax treatment of any payments under the Agreement, the intent of the Parties is that the payments and benefits under this Agreement be exempt from, or comply with, Section 409A of the Code and all Treasury Regulations and guidance promulgated thereunder (“Code Section 409A”) and to the maximum extent permitted the Agreement shall be limited, construed and interpreted in accordance with such intent.  In no event whatsoever shall the Company or its affiliates or their respective officers, directors, employees or agents be liable for any additional tax, interest or penalties that may be imposed on Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

		
	b.
	Notwithstanding any other provision of this Agreement to the contrary, to the extent that any reimbursement of expenses constitutes “deferred compensation” under Code Section 409A, such reimbursement shall be provided no later than December 31 of the year following the year in which the expense was incurred.  The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year.  The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year.

		
	c.
	For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the right to receive payments in the form of installment 

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payments shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment shall at all times be considered a separate and distinct payment.  Whenever a payment under this Agreement may be paid within a specified period, the actual date of payment within the specified period shall be within the sole discretion of the Company.

		
	d.
	Notwithstanding any other provision of this Agreement to the contrary, if at the time of Executive’s separation from service (as defined in Code Section 409A), Executive is a “Specified Employee”, then the Company will defer the payment or commencement of any nonqualified deferred compensation subject to Code Section 409A payable upon separation from service (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six (6) months following separation from service or, if earlier, the earliest other date as is permitted under Code Section 409A (and any amounts that otherwise would have been paid during this deferral period will be paid in a lump sum on the day after the expiration of the six (6) month period or such shorter period, if applicable).  Executive will be a “Specified Employee” for purposes of this Agreement if, on the date of Executive’s separation from service, Executive is an individual who is, under the method of determination adopted by the Company designated as, or within the category of employees deemed to be, a “Specified Employee” within the meaning and in accordance with Treasury Regulation Section 1.409A-1(i).  The Company shall determine in its sole discretion all matters relating to who is a “Specified Employee” and the application of and effects of the change in such determination.

		
	e.
	Notwithstanding anything in this Agreement or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “non-qualified deferred compensation” within the meaning of Code Section 409A upon or following a termination of the Executive’s employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” and the date of such separation from service shall be the date of termination for purposes of any such payment or benefits.

		
	7.
	Limitation on Payments Under Certain Circumstances.

		
	a.
	Anything in this Agreement to the contrary notwithstanding, in the event the Accounting Firm (as defined below) shall determine that receipt of all Payments (as defined below) would subject Executive to the excise tax under Section 4999 of the Code, the Accounting Firm shall determine whether to reduce any of the Severance Benefits paid or payable pursuant to this Agreement so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount (as defined below).  The Severance Benefits shall be so reduced only if the Accounting Firm determines that Executive would have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Severance Benefits were so reduced.  If the Accounting Firm determines that Executive would not have a greater Net After-Tax Receipt of aggregate Payments if the Severance Benefits were so reduced, Executive shall receive all Severance Benefits to which Executive is entitled hereunder.

		
	b.
	If the Accounting Firm determines that the aggregate Agreement Payments should be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, the Company shall promptly give Executive notice to that effect and a copy of the detailed calculation thereof.  All determinations made by the Accounting Firm under this Section 7 shall be binding upon the Company and Executive and shall be made as soon as reasonably practicable and in no event later than thirty (30) days following the date of termination.  For purposes of reducing the Severance Benefits so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount, only amounts payable under this Agreement (and no other payments) shall be reduced.  The reduction of the amounts payable hereunder, if applicable, shall be made by 

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reducing the payments and benefits under the following sections in the following order: (1) first, any payments under Section 3(a)(iv) or Section 3(b)(iv); (2) second, any payments under Section 3(a)(iii) or Section 3(b)(iii); (3) third, any payments under Section 3(a)(ii or Section 3(b)(ii); and (4) fourth, any payments under Section 3(a)(i) or Section 3(b)(i).  If payments to be reduced are payable at different times, the amounts shall be reduced (but not below zero) on a pro rata basis All fees and expenses of the Accounting Firm shall be borne solely by the Company.

		
	c.
	As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement that should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Executive pursuant to this Agreement could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Safe Harbor Amount hereunder.  In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or Executive that the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, Executive shall promptly (and in no event later than sixty (60) days following the date on which the Overpayment is determined) pay any such Overpayment to the Company together with interest at the rate used to calculate present value under Section 280G of the Code; provided, however, that no amount shall be payable by Executive to the Company if and to the extent such payment would not either reduce the amount on which Executive is subject to tax under Sections 1 and 4999 of the Code or generate a refund of such taxes.  If the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than sixty (60) days following the date on which the Underpayment is determined) by the Company to or for the benefit of Executive together with interest at the rate used to calculate present value under Section 280G of the Code.  Executive shall have no right to any Underpayment unless and until the Accounting Firm determines that an Underpayment is due.

		
	d.
	The Company shall cooperate with Executive in good faith in valuing, and the Accounting Firm shall take into account the value of, services provided or to be provided by Executive (including without limitation Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, including those set forth in Section 5 of this Agreement) before, on or after the date of a change in ownership or control of the Company (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of the regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the regulations under Section 280G of the Code in accordance with Q&A-5(a) of the regulations under Section 280G of the Code.

		
	e.
	Definitions.  For purposes of this Section, the following terms shall have the meaning set forth below:

“Accounting Firm” shall mean a nationally recognized certified public accounting firm that is selected by the Company for purposes of making the applicable determinations under Section 7 and is reasonably acceptable to Executive, which firm shall not, without Executive’s consent, be a firm serving as accountant or auditor for the individual, entity or group effecting the change in control or ownership.

“Net After-Tax Receipt” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the Code and 

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under applicable state and local laws, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied to Executive’s taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm determined to be likely to apply to Executive in the relevant tax year(s).

“Parachute Value” of a Payment means the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the excise tax under Section 4999 of the Code will apply to such Payment.

“Payment” means any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether paid or payable pursuant to this Agreement or otherwise.

“Safe Harbor Amount” means (1) 3.0 times Executive’s “base amount,” within the meaning of Section 280G(b)(3) of the Code, minus (2) $1.00.

		
	8.
	Defined Terms.  For purposes of this Agreement, the following terms shall have the meaning set forth below:

		
	a)
	“Affiliated Companies” shall mean the Company, all of its direct or indirect subsidiaries, and any other entities controlled by, controlling, or under common control with the Company, including any successors thereof, except that, following the consummation of a Change in Control, for purposes of Sections 5(a) and 5(b), Affiliated Companies shall be limited to the Company and its subsidiaries as of immediately prior to the consummation of such Change in Control.

		
	b)
	“Cause” shall mean, as determined in the sole discretion of the Company, any one or more of the following:

		
	1.
	an indictment of Executive, or plea of guilty or plea of nolo contendere by Executive, to a charge of an act constituting a felony under the federal laws of the United States, the laws of any state, or any other applicable law, (II) fraud, embezzlement, or misappropriation of assets, (III) willful misfeasance or dishonesty, or (IV) other actions or criminal conduct which materially and adversely affects the business (including business reputation) or financial condition of the Company;

		
	2.
	the continued failure of Executive to (I) perform substantially Executive’s duties with the Company (other than any such failures resulting from incapacity due to physical or mental illness), (II) observe all material obligations and conditions to be performed and observed by Executive under this Agreement, or (III) perform his or her duties in accordance, in all material respects, with the policies and directions established from time to time by the Chief Executive Officer, the Board or a duly authorized Board committee (any such failure, a (“Performance Failure”), and to correct such Performance Failure within not more than fifteen (15) days following written notice from the Chief Executive Officer or the Board delivered to Executive, which notice specifically identifies the manner in which the Chief Executive Officer or the Board believes that Executive has not substantially performed; or

10

		
	3.
	having corrected (or the Company having waived the correction of) a Performance Failure, the occurrence of any subsequent Performance Failure (whether of the same or different type or nature).

		
	c)
	“Change in Control” has the meaning given such term in the Company’s 2012 Amended and Restated Stock Plan (or a successor plan thereto) as in effect on the Effective Date.

		
	d)
	“Client” shall mean the customers or clients of the Company or any Affiliated Company and shall include any and all individuals, organizations, or business entities that: (a) were actual customers or clients of the Company or any Affiliated Company during Executive’s employment by the Company or any Affiliated Company, or which were prospective customers of the Company or any Affiliated Company during Executive’s employment; and (b) with which or whom Executive had contact or about whom Executive obtained Confidential Information during the Term from the Company or any Affiliated Company.  For purposes of this definition, an individual, organization, or business entity is a “prospective” client or customer of the Company or any Affiliated Company if the Executive or any other the Company or any Affiliated Company employee, officer or manager took steps to obtain or secure the business of the individual, organization, or business entity.

		
	e)
	“Code” means the Internal Revenue Code of 1986, as amended. 

		
	f)
	“Confidential Information” shall mean all trade secrets, proprietary data, and other confidential information of or relating to any Affiliated Company, including without limitation financial information, information relating to business operations, services, promotional practices, and relationships with customers, suppliers, employees, independent contractors, or other parties, and any information which any Affiliated Company is obligated to treat as confidential pursuant to any course of dealing or any agreement to which it is a party or otherwise bound, provided that Confidential Information shall not include information that is or becomes available to the general public and did not become so available through any breach of this Agreement by Executive or Executive’s breach of a duty owed to the Company.

		
	g)
	“Executive” shall have the meaning provided in Code Section 162(m)(3) and related guidance.  

		
	h)
	“Disability” or “Disabled” means, as determined in the sole discretion of the Company, that Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one (1) year.

		
	i)
	“Good Reason” means Executive's termination of employment within ninety (90) days following the expiration of any cure period (discussed below) following the occurrence, without Executive's consent, of one or more of the following:

		
	i.
	A material reduction in Executive's base compensation (except where there is a reduction applicable to all similarly situated executive officers generally); provided, that a reduction of less than ten percent (10%) will not be considered a material reduction in base compensation; or

		
	ii.
	A material breach by the Company of a material provision of this Agreement.

Executive will not be considered to have resigned for Good Reason unless executive provides the Company with written notice of the existence of the applicable good reason condition within sixty (60) days of the date the Executive believes the condition first arose, specifically identifying the acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not 

11

less than thirty (30) days following the date of such notice during which such condition must not have been cured.

		
	j)
	“Section 409A” means Code Section 409A, and the final regulations and any guidance promulgated thereunder or any state law equivalent.

		
	k)
	“Solicit” shall mean any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, inviting, advising, persuading, encouraging or requesting any person or entity, in any manner, to take or refrain from taking any action; provided, however, that the term “Solicit” shall not include general advertisements by an entity with which Executive is associated or other communications in any media not targeted specifically at any specific individual described in Section 5(b) or 5(c).

		
	9.
	Successors.

		
	a)
	Company Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term “Company” will include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 9(a) or which becomes bound by the terms of this Agreement by operation of law.

		
	b)
	Executive's Successors.  The terms of this Agreement and all rights of Executive hereunder will inure to the benefit of, and be enforceable by, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

		
	10.
	Arbitration.

		
	a)
	Arbitration.  Subject to the right of the Company and the Affiliated Companies to exercise the remedies described in Section 5 of this Agreement or the right of Executive to challenge, defend or contest same in any court having jurisdiction, the Parties agree that any and all controversies, claims, or disputes between Executive and the Company or any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise arising out of, relating to, or resulting from Executive's employment with the Company or termination thereof, including any breach of this Agreement, will be subject to binding arbitration under the then applicable Commercial Arbitration Rules of the American Arbitration Association. Claims subject to arbitration include but are not limited to claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Sarbanes Oxley Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Ohio Employment Practices Law, the Ohio Whistleblower Protection Law,  the Ohio Equal Pay Law, and  the Ohio State Wage Payment and Work Hour Laws, claims for breach of contract (express or implied), claims for violation of public policy or wrongful termination, and any other statutory or common law claim.

		
	b)
	Procedure.  In any such arbitration, the arbitrators shall consist of a panel of three arbitrators, which shall act by majority vote and which shall consist of one arbitrator selected by each party subject to the arbitration and a third arbitrator selected by the two arbitrators so selected, who shall be either a certified public accountant or an attorney at law licensed to practice in the State of Ohio and who shall act as chairman of the arbitration panel; provided that, if one party selects 

12

its arbitrator for the panel and the other party fails to so select its arbitrator within ten (10) business days after being requested by the first party to do so, then the sole arbitrator shall be the arbitrator selected by the first party.  A decision in any such arbitration shall apply both to the particular question submitted and to all similar questions arising thereafter and shall be binding and conclusive upon both parties and shall be enforceable in any court having jurisdiction over the party to be charged.  Each party shall bear the cost of its own attorney’s fees.  However, if any party prevails on a claim, which, according to applicable law, affords the prevailing party attorney’s fees, the arbitrator may award reasonable attorney’s fees to the prevailing party.  All other costs and expenses of arbitration shall be borne by the Company.  All rights and remedies of each party under this Agreement are cumulative and in addition to all other rights and remedies that may be available to that party from time to time, whether under any other agreement, at law or in equity.  Any arbitration under this Agreement shall be conducted in Cincinnati, Ohio.

		
	c)
	Remedy.  Except as otherwise provided by law or this Agreement, arbitration shall be the sole, exclusive, and final remedy for any dispute between Executive and the Company.  Accordingly, except as otherwise provided by law or this Agreement, Executive and the Company hereby waive the right to seek remedies for any such disputes in court, including the right to a jury trial.  Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator will not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted.

		
	d)
	Administrative Relief.  Executive is not prohibited from pursuing an administrative claim with a local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, including, but not limited to, the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission, the National Labor Relations Board, or the Workers' Compensation Board.  However, Executive may not pursue court action regarding any such claim, except as permitted by law.

		
	11.
	Voluntary Nature of Agreement.  Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO A JURY TRIAL.  Finally, Executive Agrees that Executive has been provided an opportunity to seek the advice of an attorney of the Executive’s choice before signing this Agreement.

		
	12.
	Notice.

		
	a)
	General.  Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid.  In the case of Executive, mailed notices will be addressed to him or her at the home address which he or she most recently communicated to the Company in writing.  In the case of the Company, mailed notices will be addressed to its corporate headquarters, and all notices will be directed to the attention of its chief legal officer.

		
	b)
	Notice of Termination.  Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in accordance with Section 12(a) of this Agreement.  Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts 

13

and circumstances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice), subject to any applicable cure period.  The failure by Executive or the Company to include in the notice any fact or circumstance which contributes to a showing of Good Reason or Cause, as applicable, will not waive any right of Executive or the Company, as applicable, hereunder or preclude Executive or the Company, as applicable, from asserting such fact or circumstance in enforcing his or her or its rights hereunder, as applicable.

		
	13.
	Miscellaneous Provisions.

		
	a)
	No Duty to Mitigate.  Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.

		
	b)
	Waiver.  No provision of this Agreement will be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time.

		
	c)
	Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

		
	d)
	Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto and supersedes in their entirety all prior or contemporaneous representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to the subject matter hereof.  Executive acknowledges and agrees that this Agreement encompasses all the rights of Executive to any severance payments and/or benefits based on the termination of Executive's employment and Executive hereby agrees that he or she has no such rights except as stated herein.  No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.

		
	e)
	Choice of Law.  The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Ohio without giving effect to provisions governing the choice of law.

		
	f)
	Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.

		
	g)
	Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes, as determined in the Company's reasonable judgment.

		
	h)
	Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

		
	i)
	Compliance with Applicable Law.   The benefits paid and provided under this Agreement are subject to and conditioned upon compliance with applicable requirements of federal, state and local law and regulation, whether currently in effect or subsequently enacted, including without limitation, 12 U.S.C. Section 1828(k) and the regulations promulgated thereunder in 12 C.F.R. 

14

Part 359.  Consistent with the foregoing, the Company shall have the right to defer, cancel or recoup any payment or refuse to provide any benefit under this Agreement in the event the Company determines in good faith, acting in its sole discretion, that making such payment or providing such benefit violates any applicable law or regulation.  Further, benefits paid and provided under this Agreement may be subject to any claw back policy generally applicable to the executives of the Company as may be required by applicable law or as may be established by the Company in its sole discretion. To the extent determined necessary to comply with the Guidance on Sound Incentive Compensation Policies issued by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Company and the Office of Thrift Supervision on June 21, 2010, as it may be implemented, modified and interpreted from time to time, the Executive and the Company mutually agree to amend the provisions of this Agreement and to cooperate in good faith with respect thereto.

IN WITNESS THEREOF, Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.

EXECUTIVE        FIRST FINANCIAL BANK

By:         /s/ Bradley Ringwald        By:    /s/ Claude E. Davis 

Name:    Bradley Ringwald        Name:   Claude E. Davis 
Title:     President, Commercial Banking        Title:  President and CEO

Date    9/27/17        Date    3/28/2018
 

4822-2326-2796, v. 1

15Exhibit

        

EXHIBIT 10.4

LIMITED LIABILITY COMPANY AGREEMENT
OF
NMFC SENIOR LOAN PROGRAM III LLC

    

TABLE OF CONTENTS	
				
	Article 1 DEFINITIONS
	1
	

	Article 2 GENERAL PROVISIONS
	7
	

	 
	Section 2.1    Formation of the Limited Liability Company
	7
	

	 
	Section 2.2    Company Name
	7
	

	 
	Section 2.3    Place of Business; Agent for Service of Process
	7
	

	 
	Section 2.4    Principal Purpose and Powers of the Company
	7
	

	 
	Section 2.5    Fiscal Year
	9
	

	 
	Section 2.6    Liability of Members
	9
	

	 
	Section 2.7    Member List
	9
	

	 
	Section 2.8    Member Representations and Warranties
	9
	

	 
	Section 2.9    Separate Legal Entity
	9
	

	Article 3 COMPANY CAPITAL AND INTERESTS
	12
	

	 
	Section 3.1    Capital Commitments; Capital Contributions
	12
	

	 
	Section 3.2    Temporary Advances
	13
	

	 
	Section 3.3    Defaulting Members
	13
	

	 
	Section 3.4    Interest or Withdrawals
	15
	

	Article 4 ALLOCATIONS
	15
	

	 
	Section 4.1    Capital Accounts
	15
	

	 
	Section 4.2    General Allocations  
	15
	

	 
	Section 4.3    Changes of Interests 
	15
	

	 
	Section 4.4    Income Taxes and Tax Capital Accounts
	16
	

	Article 5 DISTRIBUTIONS
	16
	

	 
	Section 5.1    General
	16
	

	 
	Section 5.2    Withholding
	17
	

	 
	Section 5.3    Reserves; Re-Investment; 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
	19
	

	 
	Section 6.3    Meetings of the Board
	20
	

	 
	Section 6.4    Quorum; Acts of the Board; Material Actions
	20
	

	 
	Section 6.5    Participation in Meetings by Electronic Communications
	21
	

	 
	Section 6.6    Compensation of Board Members; Expenses
	21
	

	 
	Section 6.7    Removal of Board Members
	21
	

	 
	Section 6.8    Board as Agent
	22
	

	 
	Section 6.9    Officers
	22
	

	 
	Section 6.10    Officers as Agents
	22
	

	 
	Section 6.11    Duties of Board, Board Members and Officers; Disclaimer of Duties
	22
	

	 
	Section 6.12    Reliance by Third Parties
	23
	

	 
	Section 6.13    Allocation of Investment Opportunities
	23
	

	 
	Section 6.14    Indemnification; Exculpation
	23
	

i
        

        

	
				
	 
	Section 6.15    Tax Matters Member
	26
	

	Article 7 TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS
	26
	

	 
	Section 7.1    Transfers by Members
	26
	

	 
	Section 7.2    Withdrawal by Members
	28
	

	Article 8 TERM, DISSOLUTION AND LIQUIDATION OF COMPANY
	28
	

	 
	Section 8.1    Term
	28
	

	 
	Section 8.2    Dissolution
	28
	

	 
	Section 8.3    Wind-Up
	30
	

	Article 9 ACCOUNTING, REPORTING AND VALUATION PROVISIONS
	31
	

	 
	Section 9.1    Books and Accounts
	31
	

	 
	Section 9.2    Financial Reports; Tax Return
	32
	

	 
	Section 9.3    Confidentiality
	33
	

	 
	Section 9.4    Valuation
	35
	

	Article 10 MISCELLANEOUS PROVISIONS
	36
	

	 
	Section 10.1    Power of Attorney
	36
	

	 
	Section 10.2    Determination of Disputes
	37
	

	 
	Section 10.3    Certificate of Formation; Other Documents
	37
	

	 
	Section 10.4    Force Majeure
	37
	

	 
	Section 10.5    Notice of Litigation or Regulatory Proceedings
	37
	

	 
	Section 10.6    Applicable Law
	38
	

	 
	Section 10.7    Waivers
	38
	

	 
	Section 10.8    Notices
	38
	

	 
	Section 10.9    Construction
	38
	

	 
	Section 10.10    Amendments
	39
	

	 
	Section 10.11    Legal Counsel
	40
	

	 
	Section 10.12    Execution
	40
	

	 
	Section 10.13    Binding Effect
	40
	

	 
	Section 10.14    Severability
	40
	

	 
	Section 10.15    Computation of Time
	40
	

	 
	Section 10.16    Entire Agreement
	40
	

ii

    

 
LIMITED LIABILITY COMPANY AGREEMENT
OF
NMFC SENIOR LOAN PROGRAM III LLC
This Limited Liability Company Agreement of NMFC Senior Loan Program III LLC (the “Company”), dated as of April 25, 2018, is entered into by and between SkyKnight Income II, 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:
“Account Control Agreement” shall have the meaning set forth in Section 2.4(b).
“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 Administration 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.
“Board Observer” shall mean each individual designated by a Member from time to time to serve in such capacity in accordance with Section 6.2(c).  
“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.

2

        

“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.
“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.

3

        

“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 25, 2018.
“Investment” shall mean, to the extent permitted by the Credit 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 fifth 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).
“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.
“Investor-Related Taxes” shall mean any tax withheld  from the Company or paid over by the Company, in each case, directly or indirectly, with respect to or on behalf of a Member, and interest, penalties and/or any additional amounts with respect thereto, including without limitation, (i) a tax that is determined 

4

        

based on the status, action or inaction (including the failure of a Member to provide information to eliminate or reduce withholding or other taxes) of a Member, or (ii) an “imputed underpayment” within the meaning of Section 6225 of the Code and any other similar tax, attributable to a Member, as determined by the NMFC in its discretion.
“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.
“Credit and Security Agreement” shall have the meaning set forth in Section 2.4(b).
“CSA Administrative Agent” shall have the meaning set forth in Section 2.4(b).
“CSA Lenders” shall have the meaning set forth in Section 2.4(b).
“CSA Securities Intermediary” 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-Contributing Member” shall have the meaning set forth in Section 3.2.
“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 

5

        

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).
“Priority of Payments” shall mean the provisions of the Credit and Security Agreement setting forth the order of application and distribution on a periodic basis of principal proceeds, interest proceeds and other proceeds of the Company’s investments. 
“Proceeding” shall have the meaning set forth in Section 6.14(a).
“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.
“Promissory Notes” shall mean the promissory notes, variable funding notes or other notes delivered to the CSA Lenders from time to time pursuant to the Credit and Security Agreement, as amended, restated, replaced, modified or supplemented from time to time.
“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.
“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 II, 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).

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“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.
“Transaction Documents” shall mean the Credit and Security Agreement, the Account Control Agreement, the Promissory Notes and the other “Transaction Documents” or “Loan Documents” as defined in the Credit and Security Agreement.
“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.
“Valid Company Purposes” shall include, subject to the terms and provisions of the Credit 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)  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 

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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 III 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).  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 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 Credit and Security Agreement so long as the Credit 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 Credit and Security Agreement and the other Transaction Documents, by borrowing from the lenders under the Credit and Security Agreement;
(ii)    to purchase Portfolio Investments from Persons who are not Affiliates of the Company, and so long as the Credit and Security Agreement remains in full force and effect, solely to the extent permitted by the Credit 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 Credit and Security Agreement remains in full force and effect, solely to the extent permitted by the Credit and Security Agreement;

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(iv)    to dispose of Portfolio Investments from time to time, and so long as the Credit and Security Agreement remains in full force and effect, solely to the extent permitted by the Credit and Security Agreement;
(v)    to hold property ancillary to the Portfolio Investments such as equity securities received upon exercise of remedies or in connection with a workout or bankruptcy proceeding affecting the applicable Portfolio Company and proceeds thereof, and so long as the Credit and Security Agreement remains in full force and effect, solely to the extent permitted by the Credit and Security Agreement;
(vi)    to enter into and to exercise its rights and perform its obligations under the credit and security agreement, loan and servicing agreement or other credit facility agreement (as amended, restated, modified or supplemented from time to time, the “Credit and Security Agreement”), to be entered into among the Company, as the borrower, each of the lenders from time to time party thereto (the “CSA Lenders”), NMFC, as the collateral manager or servicer, Citibank, N.A., as the administrative agent (together with any successor in such capacity, the “CSA Administrative Agent”), and U.S. Bank National Association, as the collateral agent (together with any successor in such capacity, the “CSA Collateral Agent”) and collateral administrator (together with any successor in such capacity, the “CSA Collateral Administrator”);
(vii)    to enter into and to exercise its rights and perform its obligations under the securities account control agreement or similar agreement (as amended, restated, modified or supplemented from time to time, the “Account Control Agreement”), among the Company, as debtor, the CSA Collateral Agent, as secured party, and U.S. Bank National Association, as the securities intermediary (together with any successor in such capacity, the “CSA Securities Intermediary”);
(viii)    (A) to grant a security interest to the CSA Collateral Agent, for the benefit of the CSA Lenders and the other Secured Parties (as defined in the Credit 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 Credit and Security Agreement, the “Collateral”) to secure all of its obligations under the Transaction Documents; (B) to execute and deliver Promissory Notes to the CSA Lenders if required under the Credit and Security Agreement or requested by any of the CSA Lenders; (C) to appoint NMFC as its servicer or collateral manager under the Credit and Security Agreement and authorize NMFC to acquire, administrate and dispose of Portfolio Investments in accordance with the terms of this Agreement and the Credit and Security Agreement as further set forth in Section 6.1(c) hereof; and (D) to enter into, execute and deliver, perform its obligations under and exercise its rights under any of the other Transaction Documents;
(ix)    to open and maintain all bank accounts and/or securities accounts permitted or required by the Credit and Security Agreement and to pay all fees and expenses in connection therewith;
(x)    to preserve and maintain its limited liability company existence; and

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(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 (i) 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, (ii) such Member is not a “Benefit Plan Investor”, as that term is defined under Section 3(42) of ERISA and any regulations promulgated thereunder, (iii) such Member is duly incorporated or formed, as applicable, and is validly existing in good standing as a corporation or limited liability company, as applicable, under the laws of the State of Delaware and possesses all requisite power and authority necessary to carry out the its obligations under this Agreement; and (iv) the execution and delivery of this Agreement by such Member, and the performance by such Member of its obligations hereunder, have been duly authorized by all necessary corporate or limited liability company action, as applicable, and upon execution and delivery by each of the other parties hereto, this Agreement will be a legal, valid and binding agreement of such Member, enforceable against such Member in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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;

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(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 the CSA Securities Intermediary or other commercial banking institutions if permitted by the Credit 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 Credit 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 or permitted by this Agreement or the Credit and Security Agreement;
(j)    transact all business with Affiliates on an arm’s length basis (except for services provided by NMFC in its capacity as Collateral Manager) and pursuant to enforceable agreements (it being understood that (i) the Transaction Documents satisfy such requirement and (ii) actions taken in accordance with the express provisions of the Transaction Documents satisfy such requirement);
(k)    prepare separate tax returns from its Members (so long as the Company has more than one Member);
(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 (provided that NMFC, as collateral manager or servicer under the Credit and Security Agreement, will not receive compensation for such services);
(m)    not acquire obligations or securities of any Member or, except as otherwise provided in the Credit and Security Agreement or any other Transaction Document, pledge its assets for the benefit of any other Person;

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(n)    except as required by the Credit 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 the indebtedness to be incurred under the Credit and Security Agreement (including as evidenced by the Promissory Notes) or as expressly permitted herein or under the Credit 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 Credit 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 Credit 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 Credit 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 (which may include NMFC in its capacity as collateral manager or servicer under the Credit and Security Agreement or a replacement collateral manager or servicer in accordance with Section 6.1(c) hereof).  Except to the extent provided herein, in the Administrative Services Agreement or in the Credit and Security Agreement or any other Transaction Document (including as provided in the preceding sentence), 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.

ARTICLE 3     
COMPANY CAPITAL AND INTERESTS

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 

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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 three (3) 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, 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 Credit 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 Credit 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.  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 the extent that Expenses are not reimbursed by the obligor of an Investment made by the Company, 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 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 the obligations  of 

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another Member who fails to make Capital Contributions as set forth in Section 3.1 or to provide the funding contemplated by Section 3.2(b) (“Non-Contributing Member”), by paying the amount of such Temporary Advance to the Company on behalf of the Non-Contributing Member.  Temporary Advances plus interest at the Temporary Advance Rate accrued thereon, shall be repaid directly by the Non-Contributing Member or be returned, as and when available, from Investment Proceeds otherwise distributable to such Non-Contributing Member (and such distributions shall be treated for all purposes of this Agreement as distributed to such Non-Contributing Member); 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 Non-Contributing 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 Non-Contributing Member shall constitute a Temporary Advance. The parties agree that the Temporary Advances shall be a non-recourse loan from the Member making such Temporary Advance to the Non-Contributing Member followed by a Capital Contribution by the Non-Contributing Member to the Company.
(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 from the advancing Member to the Non-Contributing Member and repaid or returned to the advancing Member (together with interest accruing on such amount accrued thereon at the Temporary Advance Rate) as set forth in Section 3.2(a); provided that all interest due and payable in respect of any Temporary Advance shall be the sole responsibility of the Non-Contributing Member(s) and shall not reduce the amount of such Non-Contributing Member(s) remaining Capital Commitment.

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;

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(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;
(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.

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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 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.
(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, including but not limited the minimum gain chargeback requirements of Treasury Regulations Sections 1.704-2(f) and 1.704-2(i)(4) and the “qualified income offset” requirements of Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

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 

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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).

ARTICLE 5     
DISTRIBUTIONS

Section 5.1    General.
(a)    Subject to Section 3.2 and Section 5.1(b), amounts received by the Company pursuant to Priority of Payments under the Credit and Security Agreement (collectively “Investment Proceeds”) shall, to the extent permitted by the Credit and Security Agreement, 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 distribute any amounts to the Members in accordance with Section 5.1(c);
(iv)    Fourth, 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

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(v)    Fifth, 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 (ii) of Section 5.1(a) and if permitted by the Credit and Security Agreement, 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 or Investor-Related Taxes, including, without limitation, any interest, penalties or additions with respect thereto, imposed on any income of or distributions to such Member, and such withheld amount and any Investor-Related Taxes with respect to a Member shall be considered 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 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 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).

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(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 deemed to be distributed to such Member and 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.
(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.
(c)    The Company will appoint NMFC as its collateral manager or servicer under the Credit and Security Agreement.  In such capacity, NMFC will have authority to acquire, administrate and dispose of investments and other assets on behalf of the Company to the extent permitted under this Agreement and the Credit and Servicing Agreement and to take such other actions as are delegated or assigned to it on behalf of the Borrower under the Transaction Documents.  NMFC will not receive compensation for such services but will be entitled to be reimbursed by the Company for its out-of-pocket expenses and to customary indemnification from the Company, which the Company shall pay to it subject to the Priority of Payments under the Credit and Security Agreement.  In accordance with the Credit and Security Agreement, if certain termination events occur (including an Event of Default under and as defined in the Credit and Security Agreement), the CSA Administrative Agent, at the direction of the requisite percentage of the CSA Lenders, may remove and replace NMFC with a third party to act as collateral manager or servicer, which replacement collateral manager or servicer may be entitled to payment of a fee to be paid by the Company subject to the Priority of Payments under the Credit and Security Agreement.

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 

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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 of Board Members shall be three (3), and each Member shall have the right to designate or appoint one (1) initial Board Member, and the Members may 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.
(c)    In addition to any Board Members designated or appointed by the Members pursuant to Section 6.2(a), each Member shall have the right to designate one (1) Board Observer from time to time, who shall be entitled to receive notice of and attend any meetings of the Board, and to receive any written or electronic materials distributed to Board Members generally, but shall have no voting rights.  For the avoidance of doubt, Board Observers shall have no rights or privileges other than as expressly set forth in this Section 6.2(c), including any authority, either express or implied, to act on behalf of or otherwise bind the Company, and shall not be considered Board Members for any purpose hereunder.

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 

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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 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), to take any of the following actions with respect to the Company (each such action, a “Material Action”):  (i) 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, (ii) file a petition or consent to a petition seeking reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (iii) 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, (iv) except as required by law, admit in writing its inability to pay its debts generally as they become due, (v) commence any action or proceeding for the dissolution of the Company pursuant to Section 8.2 hereof or consent to such proceeding or action, (vi) amend, modify or waive any Special Purpose Provisions or (vii) 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.

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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).  
(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.  

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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, 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, including NMFC acting in its capacity as collateral manager or servicer on behalf of the Company and any replacement collateral manager or servicer, shall be conclusive 

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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 (including NMFC as collateral manager or servicer for the Company under the Credit and Security Agreement and any replacement collateral manager or servicer), each Board Member (including each Independent 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, 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 

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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 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), other provisions of this Agreement, the Transaction Documents or other contractual arrangements.
(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, 

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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 Priority of Payments under the Credit 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 CSA Lenders and other Secured Parties under (and as defined in) the Credit and Security Agreement.

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 Member of the Company.  The Tax Matters Member shall have the authority to make, or cause to be made, all relevant decisions and elections, including, with respect to audits relating to tax returns filed for taxable years beginning after 2017, an election under Section 6226 of the Code, as then in effect, and any similar elections under state or local law.  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.  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 

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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 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;

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(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 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.

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(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. Upon the occurrence of any event that causes the last remaining member of the Company 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 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), to the fullest extent permitted by law, the personal representative of such member is hereby authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Company or the Member in 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 Credit 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 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 

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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 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 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 

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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;
(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) and Section 5.1(a)(v).
(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 

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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.
(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 2018 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:

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(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 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, 

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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 (i) 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, (i) 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, (i) 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 (i) 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 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; 

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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.

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.

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(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 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

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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 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.

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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 Proceedings. 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.

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 

38

        

(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.
(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.

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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 Credit and Security Agreement is outstanding, neither the Members nor the Company shall amend, alter or change any of Sections 2.4, 2.9, 3.1, 3.2, 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 CSA Administrative Agent consents in advance and in writing and such action has been approved by 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).  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 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 Credit 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.

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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.

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]

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 II, 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

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

Independent Board Member

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

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Schedule A
Member List
Dated as of:  April 25, 2018
	
					
	Member
	

Address
	Capital Commitment
	

Capital Contributions 
(since Formation)
	

Proportionate Share

	

SkyKnight Income II, LLC
	SkyKnight Capital, L.P.
One Letterman Drive, Building C, Suite 3-950
San Francisco, CA 94129
	$20,000,000
	

$0
	

20.0%

	

New Mountain Finance Corporation
	

787 Seventh Avenue, 48th Floor, New York, NY 10019
	$80,000,000
	

$0
	

80.0%

42
        

    

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;

45
        

        

(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;

46

        

(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 Agent or by Board Approval.

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

	Cash
	$0

	Other Assets
	$0

	 
	 

	Total
	$—

Initial Capital Contributions of New Mountain Finance Corporation:
	
		
	Asset
	Value

	Cash
	$0

	Other Assets
	$0

	 
	 

	Total
	$—

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

	SkyKnight Income II, LLC
	20.0%
	$20,000,000

	New Mountain Finance Corporation
	80.0%
	$80,000,000

	   Total
	100%
	$100,000,000

46

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