U.S. $93,750,000 LOAN AND SECURITY AGREEMENT by and among NEW MOUNTAIN GUARDIAN (LEVERAGED), L.L.C., as the Collateral Administrator NEW MOUNTAIN GUARDIAN SPV FUNDING, L.L.C., as the Borrower EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO, as the...

Exhibit (f)(4)

EXECUTION VERSION

U.S. $93,750,000

LOAN AND SECURITY AGREEMENT

by and among

NEW MOUNTAIN GUARDIAN (LEVERAGED), L.L.C.,
as the Collateral Administrator

NEW MOUNTAIN GUARDIAN SPV FUNDING, L.L.C.,
as the Borrower

EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO,
as the Lenders

▇▇▇▇▇ FARGO SECURITIES, LLC,
as the Administrative Agent

and

▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as the Collateral Custodian

Dated as of October 27, 2010

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TABLE OF CONTENTS

(continued)

iii

TABLE OF CONTENTS

(continued)

iv

EXHIBITS

v

SCHEDULES

ANNEXES

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (as amended, modified, waived, supplemented, restated or replaced from time to time, this “Agreement”) is made as of October 27, 2010, by and among:

(1)                                  NEW MOUNTAIN GUARDIAN (LEVERAGED), L.L.C., a Delaware limited liability company, as the collateral administrator (the “Collateral Administrator”);

(2)                                  NEW MOUNTAIN GUARDIAN SPV FUNDING, L.L.C., a Delaware limited liability company, as the borrower (the “Borrower”);

(3)                                  EACH OF THE LENDERS FROM TIME TO TIME PARTY HERETO (together with its respective successors and assigns in such capacity, each a “Lender”, collectively, the “Lenders”);

(4)                                  ▇▇▇▇▇ FARGO SECURITIES, LLC, a Delaware limited liability company (together with its successors and assigns, “WFS”), as the administrative agent hereunder (together with its successors and assigns in such capacity, the “Administrative Agent”); and

(5)                                  ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“▇▇▇▇▇ Fargo”), not in its individual capacity but as the collateral custodian (together with its successors and assigns in such capacity, the “Collateral Custodian”).

R E C I T A L S

WHEREAS, the Borrower has requested the Lenders to purchase the Variable Funding Notes (as defined below) and extend credit thereunder by making Advances (as defined below) under the Variable Funding Notes from time to time prior to the Revolving Period End Date (as defined below) for the general business purposes of the Borrower;

WHEREAS, the Borrower has requested that the Collateral Administrator manage the Collateral (as defined below); and

WHEREAS, the Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, based upon the foregoing Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1.                                Certain Defined Terms.

Certain capitalized terms used throughout this Agreement are defined in this Section 1.1.  As used in this Agreement and its schedules, exhibits and other attachments, unless the context requires a different meaning, the following terms shall have the following meanings:

“1940 Act”:  The Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“Account”:  Any of the Collateral Account, the Principal Collection Account, the Interest Collection Account and any sub-accounts thereof reasonably deemed appropriate or necessary by the Administrative Agent for convenience in administering such accounts.

“Accreted Interest”:  Interest accrued on a Loan that is added to the principal amount of such Loan instead of being paid as it accrues.

“Accrual Period”:  With respect to (a) the first Payment Date, the period from the Closing Date to the first Payment Date, and (b) any subsequent Payment Date, the period from the immediately preceding Payment Date to the current Payment Date.

“Additional Amount”:  The meaning specified in Section 2.13(a).

“Additional Loans”:  All Loans that become part of the Collateral after the Closing Date.

“Administrative Agent”:  WFS, in its capacity as administrative agent, together with its successors and assigns, including any successor appointed pursuant to Section 11.6.

“Administrative Expenses”:  All amounts (including indemnification payments) due or accrued and payable by the Borrower to any Person pursuant to any Transaction Document, including, but not limited to, any third party service provider to the Borrower, any Lender or the Collateral Custodian, any Approved Broker Dealer or Approved Valuation Firm, accountants, agents and counsel of any of the foregoing for reasonable fees and expenses or any other Person in respect of any other reasonable fees, expenses, or other payments (including indemnification payments).

“Advance”:  The meaning specified in Section 2.1(b).

“Advance Date”: With respect to any Advance, the date on which such Advance is made.

“Advance Rate”:  70%.

“Advances Outstanding”:  On any day, the aggregate principal amount of all Advances outstanding on such day, after giving effect to all repayments of Advances and the making of new Advances on such day.

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“Affected Party”:  The Administrative Agent, each Lender, all assignees and participants of each Lender and any sub-agent of the Administrative Agent.

“Affiliate”:  With respect to a Person, means any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person, or is a director or officer of such Person; provided that for purposes of determining whether any Loan is an Eligible Loan or any Obligor is an Eligible Obligor, the term Affiliate shall not include any Affiliate relationship which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor.  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 20% or more 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”: The meaning specified in the Preamble.

“AIV”:  New Mountain Guardian AIV, L.P., a Delaware limited partnership.

“AIV Holding”:  New Mountain Guardian AIV Holdings Corporation, a Delaware corporation.

“AIV Indemnity Agreement”:  The Indemnity Agreement, dated as of the date hereof, between the Borrower and the AIV, as the same may be amended, restated, modified or supplemented from time to time.

“AIV Limited Partnership Agreement”: The Amended and Restated Limited Partnership Agreement of the AIV, dated as of December 1, 2008, as the same may be amended, restated, modified or supplemented from time to time.

“Amortization Period”:  The period beginning on the day after the occurrence of either (i) the Revolving Period End Date or (ii) the Termination Date and ending on the date on which the Commitments have been reduced to zero and the Obligations have been paid in full.

“Applicable Law”:  For any Person or property of such Person, all existing and future laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances and orders by any Governmental Authority which are applicable to such Person or property (including, without limitation, predatory lending laws, usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System), and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

“Applicable Spread”:  A rate per annum equal to 2.25%.

“Approved Broker Dealer”: Each broker dealer listed on part 1 of Schedule II hereto.

“Approved Valuation Firm”: Each valuation firm listed on part II of Schedule II hereto.

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“Asset Rejection Percentage”: The ratio of (a)(i) the number of Partially Eligible Loans submitted by the Borrower to the Administrative Agent to be included in the Collateral which are rejected by the Administrative Agent pursuant to clause (B) of the definition of “Eligible Loan” plus (ii) the number of Eligible Loans which are given an Assigned Value of less than ninety (90) percent of their respective Purchase Price by the Administrative Agent pursuant to clause (a) of the definition of “Assigned Value” to (b) the total number of Partially Eligible Loans submitted by the Borrower to the Administrative Agent to be included in the Collateral; provided that, until fifteen (15) Partially Eligible Loans have been submitted to the Administrative Agent by the Borrower, the Asset Rejection Percentage shall be zero.

“Assigned Value”:

(a)                                  With respect to each Loan, as of the Closing Date (with respect to any Loan included in the Collateral on such date) or any subsequent date on which a Loan is acquired by the Borrower (with respect to any Loan added to the Collateral after the Closing Date), the least of (i) the value of such Loan (expressed as a percentage of par) as determined by the Administrative Agent in its sole discretion as of the Closing Date (with respect to any Loan included in the Collateral on such date) or any subsequent date on which a Loan is acquired by the Borrower (with respect to any Loan added to the Collateral after the Closing Date), (ii) the amount paid to acquire such Loan by the Borrower (expressed as a percentage of par) and (iii) 100%.  For the avoidance of doubt, the “Assigned Value” of any Loan may not subsequently be adjusted absent a Value Adjustment Event with respect to such Loan.

(b)                                 If a Value Adjustment Event of the type described in clauses (c), (d) or (f) of the definition thereof with respect to such Loan occurs, the “Assigned Value” of such Loan will, automatically and without any action by the Administrative Agent, be zero.

(c)                                  If a Value Adjustment Event of the type described in clauses (a), (b), (e) or (g) of the definition thereof with respect to such Loan occurs, the “Assigned Value” of such Loan may be amended by the Administrative Agent in its sole discretion in accordance with the following methodology:

(i)                                     if such Loan is a Priced Loan, the value assigned to such Loan shall be:

(A)                              the average of the prices quoted by three (3) Approved Broker Dealers selected by the Administrative Agent in its sole discretion (expressed as a percentage of par); or

(B)                                if a value cannot be determined pursuant to clause (A), the average of the prices quoted by two (2) Approved Broker Dealers selected by the Administrative Agent in its sole discretion (expressed as a percentage of par); or

(C)                                if a value cannot be determined pursuant to clause (A) or (B), the price quoted (if any) by a nationally recognized pricing service or

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an Approved Broker Dealer selected by the Administrative Agent in its sole discretion (expressed as a percentage of par);

provided that, in each case, such amended Assigned Value shall not be higher than the Assigned Value of such Loan on the Closing Date or any subsequent date on which such Loan is acquired by the Borrower, as applicable; or

(ii)                                  if such Loan is not a Priced Loan, or if the Administrative Agent elects to determine the value of a Loan under clause (c)(i) by requesting bid prices from a nationally recognized pricing service or Approved Broker Dealers and less than two bid prices from Approved Broker Dealers are obtained or the Administrative Agent, in its sole discretion, determines any such bid price or pricing service quote is not accurate, the value of such Loan (expressed as a percentage of par) shall be determined by the Administrative Agent in its sole discretion as of the date of the relevant Value Adjustment Event.

The amended Assigned Value of each Loan shall be promptly communicated by the Administrative Agent to the Borrower pursuant to an Assigned Value Notice.

(d)                                 In the event the Borrower disagrees with the Administrative Agent’s determination of the Assigned Value of a Loan pursuant to clause (c)(i)(C) or clause (c)(ii) above, the Borrower may (at its expense) retain any Approved Valuation Firm to value such Loan and if the value (expressed as a percentage of par) determined by such Approved Valuation Firm is greater than the Administrative Agent’s determination of the Assigned Value, such Approved Valuation Firm’s valuation shall become the Assigned Value of such Loan; provided that (A) such Approved Valuation Firm must value such Loan within twenty (20) days after the Borrower’s receipt of the related Assigned Value Notice, and (B) the Assigned Value of such Loan shall be the value (expressed as a percentage of par) determined by the Administrative Agent pursuant to clause (c)(ii) above until such Approved Valuation Firm has determined its value.

(e)                                  In the event that a Value Adjustment Event results in the reduction of the Assigned Value of any Eligible Loan and, subsequent to such reduction, either (i) the Net Senior Leverage Ratio (in the case of any Value Adjustment Event pursuant to clause (a) of such definition), (ii) the Cash Interest Coverage Ratio (in connection with any Value Adjustment Event pursuant to clause (b) of such definition) or (iii) both the Net Senior Leverage Ratio and Cash Interest Coverage Ratio (in the case of any Value Adjustment Event pursuant to clauses (a) and (b) of such definition) is or are increased to the applicable levels reported on the Closing Date or any subsequent date on which such Loan is acquired by the Borrower, then the Borrower may, by written notice to the Administrative Agent, request that the Assigned Value of such Loan be re-determined in accordance with terms of the definition of “Assigned Value” in this Section 1.1; provided that the resulting increase (if any) to the Assigned Value of such Eligible Loan shall be no greater than the Assigned Value as of the Closing Date or any subsequent date on which such Loan is acquired by the Borrower, as applicable.

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“Assigned Value Notice”: A notice delivered by the Administrative Agent to the Borrower and the Collateral Custodian specifying the value of a Loan determined in accordance with terms of the definition of “Assigned Value” in this Section 1.1, which notice shall include the reasons supporting the Administrative Agent’s determination that a Value Adjustment Event has occurred.

“Availability”:  At any time, an amount equal to the excess, if any, of (i) the Maximum Availability minus (ii) the Advances Outstanding on such day; provided that at all times on and after the earlier to occur of the Revolving Period End Date, the Revolving Period Termination Date or the Termination Date, the Availability shall be zero.

“Available Capital”: On any date of determination, the Remaining Capital Commitments (as defined in the Fund Limited Partnership Agreement) on such date less the amount on such date of any outstanding liability under any guaranty or any borrowing by the Fund or any Alternative Investment Vehicle (as defined in the Fund Limited Partnership Agreement) in respect of which the partners of the Fund would be required to make a Capital Contribution (as defined in the Fund Limited Partnership Agreement) while such guarantees or borrowing remain outstanding.

“Available Funds”:  With respect to any Payment Date, all amounts on deposit in the Collection Account (including, without limitation, any Collections).

“Bankruptcy Code”:  The United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended from time to time.

“Base Rate”: For any day, the rate per annum (rounded upward, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Federal Funds Rate in effect on such day plus ½ of 1% and (b) the Prime Rate in effect on such day.

“BDC”:  New Mountain Guardian Corporation, a Delaware corporation that intends to elect on the SPV Merger Date to be regulated as a business development company under the 1940 Act.

“Benefit Plan”:  Any “employee benefit plan” as defined in Section 3(3) of ERISA which is subject to Title IV of ERISA and in respect of which the Borrower or any ERISA Affiliate of the Borrower is, or at any time during the preceding six years was, an “employer” as defined in Section 3(5) of ERISA.

“Borrower”: The meaning specified in the Preamble.

“Borrower LLC Agreement”: The Amended and Restated Limited Liability Company Agreement of the Borrower, dated as of October 27, 2010, as the same may be amended, restated, modified or supplemented from time to time.

“Borrower’s Notice”:  Any (a) Funding Notice or (b) Reinvestment Notice.

“Borrowing Base”:  As of any Measurement Date, an amount equal to the lesser of:

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(a)                                  the aggregate sum of (i) for each Eligible Loan as of such date, the product of (A) the Advance Rate for such Eligible Loan as of such date and (B) the OLB of such Eligible Loan as of such date, plus (ii) the aggregate amount on deposit in the Principal Collection Account reasonably determined by the Collateral Custodian to be payable to the Borrower on the next following Payment Date in accordance with Section 2.7 or Section 2.8, as applicable; or

(b)                                 (i) the sum of the OLB of all Eligible Loans as of such date minus (ii) the Required Minimum Equity Amount, plus (iii) the aggregate amount on deposit in the Principal Collection Account reasonably determined by the Collateral Custodian to be payable to the Borrower on the next following Payment Date in accordance with Section 2.7 or Section 2.8, as applicable.

“Borrowing Base Certificate”:  Each certificate, in the form of Exhibit A-4, required to be delivered by the Borrower on each Measurement Date.

“Breakage Costs”:  With respect to any Lender, any amount or amounts as shall compensate such Lender for any loss, cost or expense incurred by such Lender (as determined by the applicable Lender in such Lender’s reasonable discretion, but excluding the Applicable Spread) as a result of a payment by the Borrower of Advances Outstanding or Interest.  All Breakage Costs shall be due and payable hereunder on each Payment Date in accordance with Section 2.7 and Section 2.8.  The determination by the applicable Lender of the amount of any such loss, cost or expense shall be conclusive absent manifest error.

“Business Day”:  Any day (other than a Saturday or a Sunday) on which banks are not required or authorized to be closed in New York, New York, the location of the Collateral Custodian’s Corporate Trust Office or, solely with respect to the determination of the LIBOR Rate, London, England.

“Cash”: Cash or legal currency of the United States of America as at the time shall be legal tender for payment of all public and private debts.

“Cash Interest Coverage Ratio”: With respect to any Loan for any Relevant Test Period, either (a) the meaning of “Cash Interest Coverage Ratio” or comparable definition set forth in the Underlying Instruments for such Loan, or (b) in the case of any Loan with respect to which the related Underlying Instruments do not include a definition of “Cash Interest Coverage Ratio” or comparable definition, the ratio of (i) EBITDA to (ii) Cash Interest Expense of such Obligor with respect to the applicable Relevant Test Period, as calculated by the Borrower and Collateral Administrator in good faith.

“Cash Interest Expense”: With respect to any Obligor for any period, the amount which, in conformity with GAAP, would be set forth opposite the caption “interest expense” or any like caption reflected on the most recent financial statements delivered by such Obligor to the Borrower for such period.

“Certificated Security”:  The meaning specified in Section 8-102(a)(4) of the UCC.

“Change of Control”:  Any of the following:

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(a)                                  the creation, imposition or, to the knowledge of the Borrower or the Collateral Administrator, threatened imposition of any Lien on any limited liability company membership interest in the Borrower or the Collateral Administrator;

(b)                                 at any time prior to the IPO Date, the AIV Limited Partnership Agreement shall fail to be in full force and effect;

(c)                                  the Collateral Administrator LLC Agreement shall fail to be in full force and effect;

(d)                                 at any time prior to the SPV Merger Date, the failure of AIV to directly own 100% of the limited liability company membership interests in the Collateral Administrator; or;

(e)                                  at any time prior to the IPO Date, New Mountain Investments III, L.L.C. or any Affiliate thereof shall fail to be the general partner of either the Fund or the AIV;

(f)                                    the failure of the Collateral Administrator to directly own 100% of the limited liability company membership interests in the Borrower;

(g)                                 the dissolution, termination or liquidation in whole or in part, transfer or other disposition of all or substantially all of the assets of the Collateral Administrator;

(h)                                 at any time after the SPV Merger Date, if AIV Holding owns any of the limited liability company interests in the Collateral Administrator, the failure of the AIV to own 100% of the capital stock of AIV Holding;

(i)                                     at any time after the SPV Merger Date, the failure of AIV Holding, the BDC and New Mountain Guardian Advisors BDC to collectively own 100% of the limited liability company interests in the Collateral Administrator;

(j)                                     at any time after the SPV Merger Date, New Mountain Guardian Advisors BDC shall own 10% or more of the limited liability company interests in the Collateral Administrator;

(k)                                  at any time after the SPV Merger Date, any Taxable Entity Agreement shall fail to be in full force and effect; or

(l)                                     at any time after the SPV Merger Date, but prior to the IPO Date, the failure of New Mountain Guardian Partners, L.P. to own 100% of the stock of the BDC.

“Change of Tax Law”:  Any change in application or public announcement of an official position under or any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of any jurisdiction in which an Obligor, the Collateral Custodian or the Borrower, as applicable, is organized, or any political subdivision or taxing authority of any of the foregoing, affecting taxation, or change in the official application, enforcement or interpretation of such laws, regulations or rulings (including a holding by a court of competent

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jurisdiction), or any other action taken by a taxing authority or court of competent jurisdiction in the relevant jurisdiction, or the official proposal of any such action.

“Clearing Agency”:  An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

“Clearing Corporation”:  The meaning specified in Section 8-102(a)(5) of the UCC.

“Closing Date”:  October 27, 2010.

“Code”:  The Internal Revenue Code of 1986, as amended from time to time.

“Collateral”:  All of the Borrower’s right, title and interest in, to and under (in each case, whether now owned or existing, or hereafter acquired or arising) all Accounts, General Intangibles, Instruments and Investment Property and any and all other property of any type or nature owned by it, including but not limited to:

(a)                                  all Loans, Permitted Investments and Equity Securities, all payments thereon or with respect thereto and all contracts to purchase, commitment letters, confirmations and due bills relating to any Loans, Permitted Investments or Equity Securities;

(b)                                 the Accounts and all Cash and Financial Assets credited thereto and all income from the investment of funds therein;

(c)                                  all Transaction Documents to which the Borrower is a party;

(d)                                 all funds delivered to the Collateral Custodian (directly or through an Intermediary or bailee); and

(e)                                  all accounts, accessions, profits, income benefits, proceeds, substitutions and replacements, whether voluntary or involuntary, of and to any of the property of the Borrower described in the preceding clauses.

“Collateral Account”: A Securities Account created and maintained on the books and records of the Collateral Custodian entitled “Collateral Account” in the name of the Borrower and subject to the prior Lien of the Administrative Agent for the benefit of the Secured Parties.

“Collateral Administration Fee”:  The fee payable to the Collateral Administrator on each Payment Date in arrears in respect of each Collection Period, which fee shall be equal to (i) the OLB as of such Payment Date multiplied by (ii) a rate equal to 0.50% per annum.

“Collateral Administrator”:  The meaning specified in the Preamble.  For the avoidance of doubt, it is understood and agreed that, in connection with the SPV Merger, (i) each of (x) New Mountain Guardian Debt Funding, L.L.C. and (y) New Mountain Guardian Partners Debt Funding, L.L.C. or New Mountain Guardian Partners (Leveraged), L.L.C. will merge with and into the Collateral Administrator, with the Collateral Administrator surviving each of such mergers, and (ii) the Collateral Administrator will change its name to New Mountain Guardian

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Holdings, L.L.C.  From and after the SPV Merger Date, the term “Collateral Administrator” shall be deemed to refer to New Mountain Guardian Holdings, L.L.C.

“Collateral Administrator LLC Agreement”: (a) At any time prior to the SPV Merger Date, the Limited Liability Company Agreement of the Collateral Administrator, dated as of October 29, 2008, as the same may be amended, restated, modified or supplemented from time to time and (b) thereafter, the Limited Liability Company Agreement of the Collateral Administrator, dated substantially contemporaneously with the SPV Merger Date, as the same may be amended, restated, modified or supplemented from time to time.

“Collateral Administrator Termination Event”: The occurrence of any one of the following:

(a)                                  any failure by the Collateral Administrator to make any payment, transfer or deposit into the Collection Account as required by this Agreement which continues unremedied for a period of two (2) Business Days;

(b)                                 any failure on the part of the Collateral Administrator duly to observe or perform in any material respect any covenants or agreements of the Collateral Administrator set forth in any Transaction Document to which the Collateral Administrator is a party (including, without limitation, any material delegation of the Collateral Administrator’s duties) and the same continues unremedied after any applicable cure period;

(c)                                  the failure of the Collateral Administrator to make any payment when due (after giving effect to any related grace period) with respect to any recourse debt or other obligations, which debt or other obligations are in excess of United States $5,000,000, individually or in the aggregate, or the occurrence of any event or condition that has resulted in the acceleration of such recourse debt or other obligations, whether or not waived;

(d)                                 an Insolvency Event shall occur with respect to the Collateral Administrator;

(e)                                  the occurrence of an Event of Default described in Section 9.1(a) or Section 9.1(f);

(f)                                    the Collateral Administrator shall cease to (i) be the sole member of the Borrower or (ii) be the Collateral Administrator;

(g)                                 the occurrence or existence of any change with respect to the Collateral Administrator which the Administrative Agent in its sole discretion determines has a Material Adverse Effect (for the avoidance of doubt, the mergers of each of (x) New Mountain Guardian Debt Funding, L.L.C. and (y) New Mountain Guardian Partners Debt Funding, L.L.C. or New Mountain Guardian Partners (Leveraged), L.L.C. with and into the Collateral Administrator, with the Collateral Administrator surviving each of such mergers, and the subsequent name change of the Collateral Administrator to New Mountain Guardian Holdings, L.L.C., each in connection with the SPV Merger, shall not constitute a Material Adverse Effect on the Collateral Administrator);

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(h)                                 at any time prior to the IPO Date, any of the following events occur with respect to the General Partner:

(i)                                     a breach of its obligation to make capital contributions or fund its expenses in accordance with the Limited Partnership Agreements; or

(ii)                                  a finding by any court or governmental body of competent jurisdiction in a final, non-appealable judgment, or an admission by it in a settlement of any lawsuit, that it has committed fraud, willful misconduct, a material breach of its duties under the Limited Partnership Agreements, or a material violation of applicable securities laws, in each case which has a material adverse effect on the business of the Fund or the ability of the General Partner to perform its duties to the Fund; or

(iii)                               a conviction of, or plea of guilty or nolo contendere by the General Partner in respect of a felony in connection with any activity of the Fund or any of its Subsidiaries or Affiliates.

(i)                                     any failure by the Collateral Administrator to deliver any Required Reports hereunder on or before the date occurring two (2) Business Days after the date such report is required to be made or given, as the case may be, under the terms of this Agreement;

(j)                                     any representation, warranty or certification made by the Collateral Administrator in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made, which has a Material Adverse Effect and which continues to be unremedied for a period of ten (10) days after the earlier to occur of (i) the date on which written notice of such incorrectness shall have been given to the Collateral Administrator by the Administrative Agent and (ii) the date on which a Responsible Officer of the Collateral Administrator acquires knowledge thereof;

(k)                                  the rendering against the Collateral Administrator of one or more final judgments, decrees or orders for the payment of money in excess of United States $5,000,000, individually or in the aggregate, and the continuance of such judgment, decree or order unsatisfied and in effect for any period of more than sixty (60) consecutive days without a stay of execution;

(l)                                     any Change of Control described in clauses (a), (c), (d), (f), (g), (i), (j) or (k) of the related definition occurs with respect to the Collateral Administrator;

(m)                               the Collateral Administrator LLC Agreement shall fail to be in full force and effect or shall have been amended without the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld);

(n)                                 at any time prior to the IPO Date, the Available Capital is less than $35,250,000;

(o)                                 at any time prior to the IPO Date, the sum of (i) aggregate value of the investments of the New Mountain Funds, valued on the basis that such investments would be

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valued in each such New Mountain Fund’s reports to its partners and (ii) the aggregate remaining capital commitments of the New Mountain Funds, is less than $1,000,000,000; or

(p)                                 the SPV Merger occurs without the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld).

“Collateral Administrator Termination Notice”: The meaning specified in Section 6.11

“Collateral Custodian”:  ▇▇▇▇▇ Fargo Bank, National Association, not in its individual capacity, but solely as Collateral Custodian, its successor in interest pursuant to Section 7.3 or such Person as shall have been appointed Collateral Custodian pursuant to Section 7.5.

“Collateral Custodian Fee”:  The fees, expenses and indemnities set forth as such in the Collateral Custodian Fee Letter and as provided for in this Agreement or any other Transaction Document.

“Collateral Custodian Fee Letter”:  The Fee Schedule, updated as of October 8, 2010, as acknowledged by New Mountain Capital, L.L.C.

“Collateral Custodian Termination Notice”:  The meaning specified in Section 7.5.

“Collection Account”:  Collectively, the Interest Collection Account and the Principal Collection Account.

“Collection Period”:  With respect to the first Payment Date, the period from and including the Closing Date to and including the Determination Date preceding the first Payment Date; and thereafter, the period from but excluding the Determination Date preceding the previous Payment Date to and including the Determination Date preceding the current Payment Date.

“Collections”:  (a) All cash collections and other cash proceeds of any Loan, including, without limitation or duplication, any Interest Collections, Principal Collections, amendment fees, late fees, prepayment fees, waiver fees or other amounts received in respect thereof (but excluding any Excluded Amounts) and (b) interest earnings on Permitted Investments or otherwise in any Account.

“Commitment”:  With respect to each Lender, the commitment of such Lender to make Advances in accordance herewith in an amount not to exceed (a) prior to the earlier to occur of the Revolving Period End Date or the Termination Date, the dollar amount set forth opposite such Lender’s name on Annex B hereto or the amount set forth as such Lenders “Commitment” on Schedule I to the Joinder Supplement relating to such Lender, as applicable, and (b) on or after the earlier to occur of the Revolving Period End Date or the Termination Date, zero.

“Commitment Reduction Fee”: With respect to any reduction of the Facility Amount pursuant to Section 2.3(a), an amount equal to the product of (a) the amount of such reduction multiplied by (b) the applicable Commitment Reduction Percentage; provided that, if the Asset Rejection Percentage prior to the date of such reduction is greater than 50%, the Commitment Reduction Fee shall be zero.

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“Commitment Reduction Percentage”: (a) On or prior to October 27, 2011, a rate per annum equal to 3.0%, (b) after October 27, 2011 and on or prior to October 27, 2012, a rate per annum equal to 2.0%, (c) after October 27, 2012 and on or prior to October 27, 2013, a rate per annum equal to 1.0% and (d) after October 27, 2013, zero.

“Consolidation Confirmation”:  The meaning specified in Section 2.3(a).

“Contractual Obligation”:  With respect to any Person, any provision of any securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property is bound or to which either is subject.

“Corporate Trust Office”: The designated corporate trust office of the Collateral Custodian, currently located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or such other address within the United States as the Collateral Custodian may designate from time to time by notice to the Administrative Agent.

“Covenant Compliance Period”:  The period beginning on the Closing Date and ending on the date on which the Commitments have been terminated and the Obligations have been paid in full.

“Credit and Collection Policy”:  The written credit policies and procedures manual of the Seller and the Collateral Administrator set forth on Schedule IV, as such credit and collection policy may be as amended or supplemented from time to time in accordance with Section 5.1(h).

“Default”:  Any event (other than an event described by Section 9.1(o)) that, with the giving of notice or the lapse of time, or both, would become an Event of Default.

“Determination Date”:  The date that is five (5) days before each Payment Date.

“DIP Loan”:  Any Loan (i) with respect to which the related Obligor is a debtor-in-possession as defined under the Bankruptcy Code, (ii) which has the priority allowed pursuant to Section 364 of the Bankruptcy Code and (ii) the terms of which have been approved by a court of competent jurisdiction (the enforceability of which is not subject to any pending contested matter or proceeding).

“Discretionary Sale”:  The meaning specified in Section 2.15.

“Discretionary Sale Date”:  With respect to any Discretionary Sale, the Business Day on which such Discretionary Sale occurs.

“Dollars”:  Means, and the conventional “$” signifies, the lawful currency of the United States.

“Due Diligence Fee”: A fee in an amount equal to $25,000, due and payable pursuant to Section 2.11(b).

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“EBITDA”: With respect to the last four full fiscal quarters for which financial statements have been provided to the Borrower by or on behalf of any Obligor with respect to the related Loan, the meaning of “EBITDA”, “Adjusted EBITDA” or any comparable definition in the Underlying Instruments for each such Loan, and in any case that “EBITDA”, “Adjusted EBITDA” or such comparable definition is not defined in such Underlying Instruments, an amount, for the Obligor on such Loan and any parent that is obligated pursuant to the Underlying Instruments for such Loan (determined on a consolidated basis without duplication in accordance with GAAP) equal to earnings from continuing operations for such period plus (a) interest expense, (b) income taxes, (c) depreciation and amortization for such four fiscal quarter period (to the extent deducted in determining earnings from continuing operations for such period), (d) amortization of intangibles (including, but not limited to, goodwill, financing fees and other capitalized costs), other non-cash charges and organization costs, (e) extraordinary losses in accordance with GAAP, (f) one-time, non-recurring non-cash charges consistent with the compliance statements and financial reporting packages provided by the Obligors, and (g) and any other item the Borrower and the Administrative Agent mutually deem to be appropriate; provided that with respect to any Obligor for which four full fiscal quarters of economic data are not available, EBITDA shall be determined for such Obligor based on annualizing the economic data from the reporting periods actually available.

“Eligible Loan”:  Each Loan (A) for which the Administrative Agent and the Collateral Custodian have received (or, in accordance with clause (b) of the definition of “Required Loan Documents”, will receive) the related Required Loan Documents; (B) that has been approved by the Administrative Agent in its sole discretion no less recently than three (3) Business Days prior to the applicable Advance Date; and (C) that satisfies each of the following eligibility requirements (unless the Administrative Agent in its sole discretion agrees to waive any such eligibility requirement with respect to such Loan):

(a)           such Loan is a First Lien Loan;

(b)           such Loan is denominated and payable only in Dollars in the United States and does not permit the currency in which such Loan is payable to be changed; provided that up to five (5) percent of Eligible Loans may be denominated in a currency other than Dollars;

(c)           [intentionally omitted];

(d)           the acquisition of such Loan will not cause the Borrower to be required to register as an investment company under the 1940 Act;

(e)           such Loan does not constitute a DIP Loan;

(f)            the primary Underlying Asset for such Loan is not real property;

(g)           such Loan is in the form of and is treated as indebtedness of the related Obligor for United States federal income tax purposes;

(h)           as of the date such Loan is first included as part of the Collateral, such Loan is not delinquent in payment and, since its acquisition by the Seller (or, in the case of a Loan acquired directly from a third party, since the closing of such acquisition), such Loan has

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never been delinquent in payment of either principal or interest after taking into account any applicable grace or cure period;

(i)            such Loan and any Underlying Assets comply in all material respects with all Applicable Laws;

(j)            such Loan is eligible under its Underlying Instruments (giving effect to the provisions of Sections 9-406 and 9-408 of the UCC) to be sold to the Borrower and to have a security interest therein granted to the Administrative Agent, as agent for the Secured Parties;

(k)           such Loan, together with the Underlying Instruments related thereto, (i) is, to the knowledge of the Borrower following Borrower’s completion of customary due diligence, in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms, subject to customary bankruptcy, insolvency and equity limitations, (ii) is not subject to any litigation, dispute or offset, and (iii) contains provisions substantially to the effect that the Obligor’s payment obligations thereunder are absolute and unconditional without any right of rescission, setoff, counterclaim or defense for any reason against the Seller, the Borrower or any assignee;

(l)            such Loan (i) was originated and underwritten, or purchased and re-underwritten, by the Seller or by the Borrower in accordance with the Credit and Collection Policy and (ii) is fully documented;

(m)          the Borrower has good and marketable title to, and is the sole owner of, such Loan, and (ii) the Borrower has granted to the Administrative Agent a valid and perfected first priority (subject to Permitted Liens) security interest in the Loan and Underlying Instruments, for the benefit of the Secured Parties;

(n)           such Loan, and any payment made with respect to such Loan, is not subject to any withholding tax unless the Obligor thereon is required under the terms of the related Underlying Instrument to make “gross-up” payments that cover the full amount of such withholding tax on an after-tax basis;

(o)           all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority or any other Person required to be obtained, effected or given in connection with the making, acquisition, transfer or performance of such Loan have been duly obtained, effected or given and are in full force and effect;

(p)           such Loan and the Underlying Instruments related thereto, are eligible to be sold, assigned or transferred to the Borrower, and neither the sale, transfer or assignment of such Loan to the Borrower, nor the granting of a security interest hereunder to the Administrative Agent, violates, conflicts with or contravenes in any material respect any Applicable Law or any contractual or other restriction, limitation or encumbrance binding on the Borrower;

(q)           such Loan requires the related Obligor to pay customary maintenance, repair, insurance and taxes, together with all other ancillary costs and expenses, with respect to the related, underlying collateral of such Loan;

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(r)                                    such Loan has an original term to stated maturity that does not exceed ten (10) years;

(s)                                  the Underlying Instruments for such Loan do not contain a confidentiality provision that would prohibit the Administrative Agent or any Secured Party from obtaining all necessary information with regard to such Loan, so long as the Administrative Agent or such Secured Party, as applicable, has agreed to maintain the confidentiality of such information in accordance with the provisions of such Underlying Instruments;

(t)                                    such Loan provides for (i) periodic payments of accrued and unpaid interest in cash on a current basis at a rate of at least 1.50% per annum, no less frequently than semi-annually and (ii) a fixed amount of principal payable in cash no later than its stated maturity;

(u)                                 the Obligor with respect to such Loan is an Eligible Obligor;

(v)                                 such Loan is Registered;

(w)                               such Loan is not a participation interest;

(x)                                   all information provided by the Borrower or the Collateral Administrator with respect to the Loan is true, correct and complete in all material respects;

(y)                                 such Loan (A) is not an Equity Security and (B) does not provide for the conversion or exchange into an Equity Security at any time on or after the date it is included as part of the Collateral;

(z)                                   such Loan does not constitute Margin Stock;

(aa)                            such Loan does not require the Borrower to make advances in respect of such Loan at any time after the Borrower’s purchase of such Loan; and

(bb)                          such Loan satisfies such other eligibility criteria as may be mutually agreed upon by the Administrative Agent and the Borrower prior to the applicable Advance Date.

For purposes of determining compliance with clause (B) of the definition of “Eligible Loan,” each Loan included in the Loan List set forth on Schedule III hereto as of the Closing Date shall be deemed approved by the Administrative Agent.

“Eligible Obligor”:  On any Measurement Date, any Obligor:

(a)                                  that is a business organization (and not a natural person) duly organized and validly existing under the laws of its jurisdiction of organization;

(b)                                 that is not a Governmental Authority;

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(c)           that is not an Affiliate of the Borrower, the Seller or the Collateral Administrator;

(d)           that is organized and incorporated in the United States, unless otherwise approved in writing by the Administrative Agent in its sole discretion;

(e)           unless otherwise approved in writing by the Administrative Agent in its sole discretion, that is not the subject of an Insolvency Event and, as of the date on which such Loan becomes part of the Collateral, such Obligor has not, to the Borrower’s knowledge after completion of customary due diligence, experienced a material adverse change in its financial condition; and

(f)            where the sum of the OLB of all Eligible Loans made to such Obligor (including any Affiliate thereof) does not exceed $10,000,000; provided that, for up to three (3) Obligors on any Measurement Date, the sum of the OLB of all Eligible Loans made each such Obligor may equal an amount not to exceed $12,500,000.

“Eligible Repurchase Obligations”:  Repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b) of the definition of Permitted Investments.

“Equity Security”:  (i) Any equity security or any other security that is not eligible for purchase by the Borrower as a Loan, (ii) any security purchased as part of a “unit” with a Loan and that itself is not eligible for purchase by the Borrower as a Loan, (iii) any obligation that, at the time of commitment to acquire such obligation, was eligible for purchase by the Borrower as a Loan but that, as of any subsequent date of determination, no longer is eligible for purchase by the Borrower as a Loan, for so long as such obligation fails to satisfy such requirements; provided that, the following are not “Equity Securities”: (A) any United States real property interest as defined in Section 897 of the Code and any Treasury Regulation promulgated thereunder or (B) any interest in a partnership or any entity treated as a partnership within the meaning of Treasury Regulation §301.7701-3.

“ERISA”:  The United States Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated or issued thereunder.

“ERISA Affiliate”:  (a) Any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Borrower, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower.

“Eurodollar Disruption Event”:  The occurrence of any of the following:  (a) any Lender shall have notified the Administrative Agent of a determination by such Lender that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to fund any Advance, (b) any Lender shall have notified the Administrative Agent of a

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determination by such Lender that the rate at which deposits of United States dollars are being offered to such Lender in the London interbank market does not accurately reflect the cost to such Lender of making, funding or maintaining any Advance or (c) any Lender shall have notified the Administrative Agent of the inability of such Lender, as applicable, to obtain United States dollars in the London interbank market to make, fund or maintain any Advance.

“Event of Default”:  The meaning specified in Section 9.1.

“Excepted Persons”:  The meaning specified in Section 12.13(a).

“Exchange Act”:  The United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Amounts”:  Any amount received in the Collection Account with respect to any Loan included as part of the Collateral, which amount is attributable to the reimbursement of payment by the Borrower of any Tax, fee or other charge imposed by any Governmental Authority on such Loan or on any Underlying Assets.

“Existing Facilities”:  The collective reference to (a) the Loan and Security Agreement, dated as of October 21, 2009, among New Mountain Guardian Debt Funding, L.L.C., as borrower, the Collateral Administrator, the lenders from time to time party thereto, ▇▇▇▇▇ Fargo Securities, LLC, as administrative agent, and ▇▇▇▇▇ Fargo Bank, National Association, as collateral custodian, and the other “Transaction Documents” (as defined therein), and (b) the Loan and Security Agreement, dated as of November 19, 2009, among New Mountain Guardian Partners Debt Funding, L.L.C., as borrower, New Mountain Guardian Partners (Leveraged), L.L.C., as collateral manager, the lenders from time to time party thereto, ▇▇▇▇▇ Fargo Securities, LLC, as administrative agent, and ▇▇▇▇▇ Fargo Bank, National Association, as collateral custodian, and the other “Transaction Documents” (as defined therein), in each case as such agreements may be amended, restated, supplemented or otherwise modified from time to time.

“Excluded Taxes”:  The meaning specified in Section 2.13(a).

“Facility Amount”:  (a) At any time prior to the SPV Merger Date, $93,750,000 and (b) thereafter, $100,000,000, in each case as such amount may vary from time to time pursuant to Section 2.3 hereof; provided that on or after the earlier to occur of the Revolving Period End Date or the Termination Date, the Facility Amount shall mean the Advances Outstanding.

“Facility Maturity Date”:  October 27, 2015.

“FATCA”:  Sections 1471 through 1474 of the Code, as in effect on the Closing Date (including all regulations or official interpretations thereof issued after the Closing Date).

“FDIC”:  The Federal Deposit Insurance Corporation, and any successor thereto.

“Federal Funds Rate”:  For any period, a fluctuating interest per annum rate equal, for each day during such period, to the weighted average of the overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the next

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preceding Business Day), or, if for any reason such rate is not available on any day, the rate determined, in the sole discretion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. (Charlotte, North Carolina time) on such day.

“Fees”:  The Due Diligence Fee, the Non-Usage Fee and the Structuring Fee.

“Financial Asset”:  The meaning specified in Section 8-102(a)(9) of the UCC.

“Financial Sponsor”:  Any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.

“First Lien Loan”:  A Loan (i) that is not (and cannot by its terms become) subordinate in right of payment to any obligation of the Obligor in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (ii) that is secured by a pledge of collateral, which security interest is validly perfected and first priority under Applicable Law (subject to liens permitted under the Underlying Instruments) and (iii) the Collateral Administrator determines in good faith that the value of the collateral securing the loan on or about the time of origination equals or exceeds the outstanding principal balance of the Loan plus the aggregate outstanding balances of all other loans of equal or higher seniority secured by the same collateral.

“Fitch”:  Fitch, Inc. or any successor thereto.

“Fund”: New Mountain Partners III, L.P., a Delaware limited partnership.

“Fund Limited Partnership Agreement”: The Amended and Restated Limited Partnership Agreement of the Fund, dated as of May 25, 2007, as the same may be amended, and as the same may be further amended, restated, modified or supplemented from time to time.

“Funding Date”:  With respect to any Advance, the Business Day following the Business Day of receipt by the Administrative Agent and Lender of a Funding Notice and other required deliveries in accordance with Section 2.2.

“Funding Notice”:  A notice in the form of Exhibit A-1 requesting an Advance, including the items required by Section 2.2.

“GAAP”:  Generally accepted accounting principles as in effect from time to time in the United States.

“Gains”: With respect to any Eligible Loan, the greater of (a) all amounts received by the Borrower in connection with the taxable disposition of an Eligible Loan occurring after the Revolving Period minus the Purchase Price paid by the Borrower for such Eligible Loan and (b) zero.

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“General Intangible”:  The meaning specified in Section 9-102(a)(42) of the UCC.

“General Partner”: New Mountain Investments III, L.L.C., and any additional or successor general partners admitted to the Fund or the AIV as a general partner thereof in accordance with the terms of the applicable Limited Partnership Agreement, in each case in its capacity as a general partner of the Fund or the AIV.

“Governmental Authority”:  With respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.

“Highest Required Investment Category”:  (i)  With respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one (1) month instruments, “Aa2” and “P-1” for three (3) month instruments, “Aa3” and “P-1” for six (6) month instruments and “Aa2” and “P-1” for instruments with a term in excess of six (6) months, (ii) with respect to rating assigned by S&P, “A-1” for short-term instruments and “A” for long-term instruments, and (iii) with respect to rating assigned by Fitch (if such investment is rated by Fitch), “F-1+” for short-term instruments and “AAA” for long-term instruments.

“Increased Costs”:  Any amounts required to be paid by the Borrower to an Affected Party pursuant to Section 2.12.

“Indebtedness”:  With respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument or other evidence of indebtedness customary for indebtedness of that type, (b) all obligations of such Person under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (c) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) all indebtedness, obligations or liabilities of that Person in respect of derivatives, and (f) all obligations under direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in clauses (a) through (e) above.

“Indemnified Amounts”:  The meaning specified in Section 10.1(a).

“Indemnified Parties”:  The meaning specified in Section 10.1(a).

“Independent Manager”:  The meaning specified in Section 4.1(u)(xxvi).

“Independent Verification”:  The meaning specified in Section 2.7(d).

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“Indorsement”:  The meaning specified in Section 8-102(a)(11) of the UCC, and “Indorsed” has a corresponding meaning.

“Ineligible Assignee”: Any private investment company, investment firm, investment partnership, private equity fund or other private equity investment vehicle.

“Initial Advance”:  All Advances made on the Closing Date hereunder.

“Insolvency Event”:  With respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction over such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree, order or appointment shall remain unstayed and in effect for a period of sixty (60) consecutive days, (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, (c) the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or (d) the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

“Insolvency Laws”:  The Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

“Insolvency Proceeding”:  Any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.

“Instrument”:  The meaning specified in Section 9-102(a)(47) of the UCC.

“Interest”:  For each Accrual Period and the Advances Outstanding, the sum of the products (for each day during such Accrual Period) of:

where:

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provided that following the occurrence and during the continuation of an Event of Default, 2.00% shall be added to the otherwise applicable Interest for all outstanding amounts; provided further that (i) no provision of this Agreement shall require the payment or permit the collection of Interest in excess of the maximum permitted by Applicable Law, (ii) Interest shall not be considered paid by any distribution if at any time such distribution is rescinded or must otherwise be returned for any reason and (iii) such additional 2.00% shall not apply to overdue Interest.

“Interest Collections”:  All payments of interest on Loans and Permitted Investments, including any payments of accrued interest received on the sale of Loans or Permitted Investments and all payments of principal (including principal prepayments) on Permitted Investments purchased with the proceeds described in this definition, in each case, received in cash by or on behalf of the Borrower or Collateral Custodian; provided that Interest Collections shall not include (x) Sale Proceeds representing accrued interest that are applied toward payment for accrued interest on the purchase of an Additional Loan and (y) interest received in respect of a Loan (including in connection with any sale thereof), which interest was purchased with Principal Collections.

“Interest Collection Account”:  A Securities Account created and maintained on the books and records of the Collateral Custodian entitled “Interest Collection Account” in the name of the Borrower and subject to the prior Lien of the Administrative Agent for the benefit of the Secured Parties.

“Interest Rate”:  (a) The LIBOR Rate plus (b) the Applicable Spread; provided that, upon and during the occurrence of a Eurodollar Disruption Event, “Interest Rate” shall mean the Base Rate plus the Applicable Spread.  Accrued and unpaid interest on Advances shall be payable quarterly on each Payment Date.

“Intermediary”:  (a) A Clearing Corporation or (b) a Person, including a bank or broker, that in the ordinary course of its business maintains Securities Accounts for others and is acting in that capacity, which in each case is not an Affiliate of the Borrower or the Collateral Administrator.

“Investment”:  With respect to any Person, any direct or indirect loan, advance or investment by such Person in any other Person, whether by means of share purchase, capital contribution, loan or otherwise, excluding the acquisition of Loans pursuant to the Sale Agreement or otherwise and the acquisition of Equity Securities otherwise permitted by the terms hereof which are related to such Loans.

“Investment Property”:  The meaning specified in Section 9-102(a)(49) of the UCC.

“IPO Date”:  The date on which the BDC shall have completed an initial public offering of shares of its common stock to unaffiliated Persons.

“Joinder Supplement”:  An agreement among the Borrower, a Lender and the Administrative Agent in the form of Exhibit I to this Agreement (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Closing Date, as contemplated by Section 2.1(c).

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“Lender”:  ▇▇▇▇▇ Fargo Bank, National Association, and each financial institution which may from time to time become a Lender hereunder by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by Section 2.1(c).

“LIBOR Rate”: For any day during the Revolving Period, (a) the rate per annum appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, for such day, provided, if such day is not a Business Day, the immediately preceding Business Day, for a one-month maturity; and (b) if no rate specified in clause (a) of this definition so appears on Reuters Screen LIBOR01 Page (or any successor or substitute page), the interest rate per annum at which dollar deposits of $5,000,000 and for a one-month maturity are offered by the principal London office of Wachovia in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day.

“Lien”:  Any mortgage, lien, pledge, charge, right, claim, security interest or encumbrance of any kind of or on any Person’s assets or properties in favor of any other Person.

“Limited Partnership Agreements”:  The collective reference to the Fund Limited Partnership Agreement and the AIV Limited Partnership Agreement.

“Loan”:  Any commercial loan or note originated, acquired or reunderwritten by the Seller in the ordinary course of its business and sold to the Borrower or which the Borrower acquires from a third party.

“Loan File”:  For each Loan, the following documents or instruments:

(a)           copies of each of the documents included in the Required Loan Documents definition;

(b)           to the extent applicable to such Loan, the final copies for any related subordination agreement, intercreditor agreement, or similar instruments, assumption or substitution agreement or similar material operative document, in each case together with any amendment or modification thereto;

(c)           either (i) copies of any financing statements under the UCC, if any, and any related continuation statements, each showing the Obligor as debtor and each with evidence of filing thereon, or (ii) copies of any such financing statements certified by the Collateral Administrator to be true and complete copies thereof in instances where the original financing statements have been sent to the appropriate public filing office for filing.

“Loan List”:  The Loan List provided by the Borrower to the Administrative Agent and the Collateral Custodian, in the form of Schedule III hereto, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.

“Margin Stock”:  “Margin Stock” as defined under Regulation U.

“Markit”:  The Markit Loan Pricing service, a division of Markit Group Limited.

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“Materially Modified Loan”:  Any Loan subject to a Material Modification.

“Material Adverse Effect”:  With respect to any event or circumstance, a material adverse effect on (a) the business, financial condition, operations, performance or properties of the Borrower, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loans generally or any material portion of the Loans, (c) the rights and remedies of the Administrative Agent, the Lenders and the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower or the Collateral Administrator to perform its obligations under any Transaction Document to which it is a party, or (e) the status, existence, perfection, priority or enforceability of the Administrative Agent’s or the other Secured Parties’, lien on the Collateral.

“Material Modification”:  Any amendment or waiver of, or modification or supplement to, an Underlying Instrument governing a Loan executed or effected on or after the date on which the Borrower acquired such Loan that:

(a)           reduces or waives any or all of the principal amount of such Loan;

(b)           waives one or more interest payments, or permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Loan;

(c)           contractually or structurally subordinates such Loan by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than Permitted Liens) on any of the Underlying Assets securing such Loan; or

(d)           substitutes, alters or releases (other than as permitted by such Underlying Instruments) the Underlying Assets securing such Loan, and each such substitution, alteration or release, as determined in the sole reasonable discretion of the Administrative Agent, materially and adversely affects the value of such Loan; or

(e)           amends, waives, forbears, supplements or otherwise modifies in any way the definition of “Net Senior Leverage Ratio” or “Cash Interest Coverage Ratio” (or any respective comparable definition in its Underlying Instruments) or the definition of any component thereof in a manner that, in the sole discretion of the Administrative Agent, is materially adverse to the Administrative Agent or any Lender.

provided that no Material Modification will be deemed to have occurred with respect to any publicly rated Loan if after the occurrence of any of the events listed in the clauses (b) through (e) of this definition any of S&P, Fitch or Moody’s (or, if such Loan is rated by some or all of S&P, Fitch and ▇▇▇▇▇’▇ each of S&P, Fitch and ▇▇▇▇▇’▇) has affirmed its public rating of such Loan, in each case unless such Loan is considered to be “significantly modified” within the meaning of Treasury Regulation §1.1001-3.

“Maximum Availability”:  At any time, an amount equal to the lesser of (i) the Facility Amount and (ii) the Borrowing Base.

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“Measurement Date”:  Each of the following:  (i) the Closing Date; (ii) the date of any Borrower’s Notice, (iii) the date that the Collateral Administrator has actual knowledge of the occurrence of any Value Adjustment Event; (iv) the date that the Assigned Value of any Loan is adjusted; (v) the date that is five (5) days prior to each Payment Date, (vi) unless such date is five (5) or fewer days prior to the next Payment Date, the Business Day prior to the date any Principal Collections are to be released pursuant to Section 2.7(b) or Section 2.7(c); (vii) the date on which any Loan included in the latest calculation of the Borrowing Base fails to meet one or more of the criteria listed in the definition of “Eligible Loan” (other than any criteria thereof waived by the Administrative Agent on or prior to the related Funding Date in respect of such Loan) and (viii) the fifth Business Day of each calendar month;.

“Moody’s”:  ▇▇▇▇▇’▇ Investors Service, Inc., and any successor thereto.

“Multiemployer Plan”:  A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA that is or was at any time during the current year or the preceding five (5) years contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.

“Net Senior Leverage Ratio”: With respect to any Loan for any Relevant Test Period, either (a) the meaning of “Net Senior Leverage Ratio” or comparable definition set forth in the Underlying Instruments for such Loan, or (b) in the case of any Loan with respect to which the related Underlying Instruments do not include a definition of “Net Senior Leverage Ratio” or comparable definition, the ratio of (i) the senior Indebtedness (including, without limitation, such Loan) of the applicable Obligor as of the date of determination minus the Unrestricted Cash of such Obligor as of such date to (ii) EBITDA of such Obligor with respect to the applicable Relevant Test Period, as calculated by the Borrower and Collateral Administrator in good faith.

“New Mountain Funds”: The Fund and any investment vehicle for which the General Partner or any Affiliate thereof acts as the general partner or investment manager or serves in a similar capacity.

“New Mountain Guardian Advisors BDC”: New Mountain Guardian Advisors BDC, L.L.C., it being understood and agreed that, with respect to any provision herein that references New Mountain Guardian Advisors BDC, such provision shall only apply to it at such times as it holds any equity interests in the Collateral Administrator.

“Non-Usage Fee”:  A fee in an amount equal to the product of (a) the Unused Facility Amount multiplied by (b) the Non-Usage Fee Rate, due and payable pursuant to Section 2.11(a).

“Non-Usage Fee Rate”:  (a) During the first six (6) months following the Closing Date, 0.50% and (b) thereafter, (i) 0.50% of the first $18,750,000 of the Unused Facility Amount and (ii) a rate per annum equal to the then-current Applicable Spread on the portion of the Unused Facility Amount in excess of $18,750,000.

“Noteless Loan”:  A Loan with respect to which the Underlying Instruments do not require the Obligor to execute and deliver, and the Obligor has not executed and delivered, a promissory note evidencing any indebtedness created under such Loan.

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“Notice of Exclusive Control”: The meaning specified in the Securities Account Control Agreement.

“Obligations”:  The unpaid principal amount of, and interest (including, without limitation, interest accruing after the maturity of the Advances and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) on the Advances and all other obligations and liabilities of the Borrower to the Secured Parties, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out of or in connection with any Transaction Document, and any other document made, delivered or given in connection therewith or herewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of counsel to the Administrative Agent, the Collateral Custodian or to the Lenders that are required to be paid by the Borrower pursuant to the terms of the Transaction Documents) or otherwise.

“Obligor”:  With respect to any Loan, any Person or Persons obligated to make payments pursuant to or with respect to such Loan, including any guarantor thereof.  For purposes of determining whether any Loan is made to an Eligible Obligor, all Eligible Loans included as part of the Collateral or to be transferred to the Collateral, the Obligor of which is an Affiliate of another Obligor, shall be aggregated with all Eligible Loans of such Affiliate Obligor; for example, if Corporation A is an Affiliate of Corporation B, and the sum of the OLBs of all of Corporation A’s Eligible Loans included as part of the Collateral constitutes 10% of the aggregate OLB and the sum of the OLBs of all of Corporation B’s Eligible Loans included as part of the Collateral constitutes 10% of the aggregate OLB, the combined Obligor concentration for Corporation A and Corporation B would be 20%.

“Officer’s Certificate”:  A certificate signed by a Responsible Officer of the Person providing the applicable certification, as the case may be.

“OLB”:  For any Loan as of any date of determination, an amount equal to the lesser of (i) the product of (x) the Assigned Value of such Loan as of such date of determination, multiplied by (y) the principal balance of such Loan outstanding as of such date of determination, and (ii) the principal balance of such Loan outstanding as of such date of determination.

“Opinion of Counsel”:  A written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its sole discretion.

“Original Cash Interest Coverage Ratio”: With respect to any Loan, the Cash Interest Coverage Ratio for such Loan on the date such Loan was approved as an Eligible Loan by the Administrative Agent.

“Original Net Senior Leverage Ratio”: With respect to any Loan, the Net Senior Leverage Ratio for such Loan on the date such Loan was approved as an Eligible Loan by the Administrative Agent.

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“Partially Eligible Loan”:  Any Loan which meets each of the criteria listed in the definition of “Eligible Loan” other than clause (B) of such definition, whether or not rejected by the Administrative Agent pursuant to such clause (B).

“Payment Date”:  Quarterly on the 15th day of each January, April, July and October, or, if such day is not a Business Day, the next succeeding Business Day, commencing January 2011.

“Payment Duties”:  The meaning specified in Section 7.2(b)(iv).

“Pension Plans”:  The meaning specified in Section 4.1(x).

“Permitted Financing Arrangement”: Any revolving loan or credit facility, derivative instrument or similar financing arrangement (other than this Agreement) that the Collateral Administrator enters into that complies with the requirements set forth in Section 5.4(h).

“Permitted Investments”:  Negotiable instruments or securities or other investments (which may include obligations or securities of issuers for which the Collateral Custodian or an Affiliate of the Collateral Custodian provides services or receives compensation) that (i) except in the case of demand or time deposits, investments in money market funds and Eligible Repurchase Obligations, are represented by instruments in bearer or registered form or ownership of which is represented by book entries by a Clearing Agency or by a Federal Reserve Bank in favor of depository institutions eligible to have an account with such Federal Reserve Bank who hold such investments on behalf of their customers, (ii) as of any date of determination, mature by their terms on or prior to the Business Day preceding the next Payment Date, and (iii) evidence:

(a)           direct obligations of, and obligations fully guaranteed as to full and timely payment by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States);

(b)           demand deposits, time deposits or certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided that at the time of the Borrower’s investment or contractual commitment to invest therein, the commercial paper, if any, and short-term unsecured debt obligations (other than such obligation whose rating is based on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from Fitch and each Rating Agency in the Highest Required Investment Category granted by Fitch and such Rating Agency;

(c)           commercial paper, or other short term obligations, having, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating in the Highest Required Investment Category granted by each Rating Agency and Fitch;

(d)           demand deposits, time deposits or certificates of deposit that are fully insured by the FDIC and either have a rating on their certificates of deposit or short-term deposits from Moody’s and S&P of “P-1” and “A-1”, respectively, and if rated by Fitch, from Fitch of “F-1+”;

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(e)           notes that are payable on demand or bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;

(f)            investments in taxable money market funds or other regulated investment companies having, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category from each Rating Agency and Fitch (if rated by Fitch);

(g)           time deposits (having maturities of not more than 90 days) by an entity the commercial paper of which has, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category granted by each Rating Agency and Fitch; or

(h)           Eligible Repurchase Obligations with a rating acceptable to the Rating Agencies and Fitch, which in the case of S&P, shall be “A-1” and in the case of Fitch shall be “F-1+”.

The Collateral Custodian may, pursuant to the direction of the Collateral Administrator or the Administrative Agent, as applicable, purchase or sell to itself or an Affiliate, as principal or agent, the Permitted Investments described above.

“Permitted Liens”:  Any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) Liens for Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith and (c) Liens granted pursuant to or by the Transaction Documents.

“Person”:  An individual, partnership, corporation, limited liability company, joint stock company, trust (including a statutory or business trust), unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.

“Priced Loan”:  Any Loan for which a quoted price is available from Markit.

“Prime Rate”:  The rate announced by ▇▇▇▇▇ Fargo from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes.  The Prime Rate is not intended to be the lowest rate of interest charged by ▇▇▇▇▇ Fargo or any other specified financial institution in connection with extensions of credit to debtors.

“Principal Collections”:  All amounts received by the Borrower or the Collateral Custodian that are not Interest Collections to the extent received in cash by or on behalf of the Borrower or the Collateral Custodian.

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“Principal Collection Account”:  A Securities Account created and maintained on the books and records of the Collateral Custodian entitled “Principal Collection Account” in the name of the Borrower and subject to the prior Lien of the Administrative Agent for the benefit of the Secured Parties.

“Pro Rata Share”:  With respect to a Lender, the percentage obtained by dividing the Commitment of such Lender (as determined pursuant to the definition of Commitment) by the aggregate Commitments of all the Lenders (as determined pursuant to the definition of Commitment).

“Proceeds”:  With respect to any Collateral, all property that is receivable or received when such Collateral is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral.

“Purchase Price”:  With respect to any Loan, an amount (expressed as a percentage of par) equal to (i) the purchase price (or, if different principal amounts of such Loan were purchased at different purchase prices, the weighted average of such purchase prices) paid by the Seller or the Borrower (as applicable) for such Loan (exclusive of any interest, Accreted Interest and original issue discount) divided by (ii) the principal balance of such Loan outstanding as of the date of such purchase (exclusive of any interest, Accreted Interest and original issue discount).

“Qualified Institution”:  A depository institution or trust company organized under the laws of the United States of America or any one of the States thereof or the District of Columbia (or any domestic branch of a foreign bank), (i)(a) that has either (1) a long-term unsecured debt rating of “A” or better by S&P and “A2” or better by ▇▇▇▇▇’▇ or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P or “P-1” or better by ▇▇▇▇▇’▇, (b) the parent corporation of which has either (1) a long-term unsecured debt rating of “A” or better by S&P and “A2” or better by ▇▇▇▇▇’▇ or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P and “P-1” or better by ▇▇▇▇▇’▇ or (c) is otherwise acceptable to the Administrative Agent and (ii) the deposits of which are insured by the FDIC.

“Rating Agency”:  Each of S&P, Fitch and ▇▇▇▇▇’▇.

“Reinvestment Notice”:  Each notice required to be delivered by the Borrower in respect of any reinvestment of Principal Collections under Section 2.7(b), in the form of Exhibit A-3.

“Register”: The meaning specified in Section 12.16(b).

“Registered”: With respect to any registration-required obligation within the meaning of Section 163(f)(2) of the Code, a debt obligation that was issued after July 18, 1984 and that is in registered form within the meaning of Section 5f.103-1(c) of the Treasury Regulations.

“Regulation U”:  Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R. §221, or any successor regulation.

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“Relevant Test Period”: With respect to any Loan, the relevant test period for the calculation of Net Senior Leverage Ratio or Cash Interest Coverage Ratio, as applicable, for such Loan in accordance with the related Underlying Instruments or, if no such period is provided for therein, each period of the last four consecutive reported fiscal quarters of the principal Obligor on such Loan; provided that with respect to any Loan for which the relevant test period is not provided for in the related Underlying Instruments, if four (4) consecutive fiscal quarters have not yet elapsed since the closing date of the relevant Underlying Instruments, “Relevant Test Period” shall initially include the period from such closing date to the end of the fourth fiscal quarter thereafter, and shall subsequently include each period of the last four (4) consecutive reported fiscal quarters of such Obligor.

“Repayment Notice”:  Each notice required to be delivered by the Borrower in respect of any reduction in the Facility Amount or repayment of Advances Outstanding, in the form of Exhibit A-2.

“Reportable Event”: The meaning specified in Section 4.1(x).

“Reporting Date”:  The date that is two (2) Business Days prior to the 15th of each calendar month (unless in such month a Payment Date occurs in which case two (2) Business Days prior to such Payment Date), with the first Reporting Date occurring on November 11, 2010.

“Required Advance Reduction Amount”:  As of any Measurement Date, an amount equal to the greater of (a)(i) Advances Outstanding on such day minus (ii) the Maximum Availability on such day and (b) zero.

“Required Lenders”:  The Lenders representing an aggregate of more than 50% of the aggregate Commitments of the Lenders then in effect; provided that for the purposes of determining the Required Lenders, in the event that a Lender fails to provide funding for an Advance hereunder for which all conditions precedent have been satisfied, such Lender, as applicable, shall not constitute a Required Lender hereunder (and the Commitment of such Lender, as applicable, shall be disregarded for purposes of determining whether the consent of the Required Lenders has been obtained).

“Required Loan Documents”:

For each Loan, the following documents or instruments:

(a)           for each Loan other than a Noteless Loan, (1) a copy of the related executed promissory note or, in the case of a lost note, a copy of the executed underlying promissory note accompanied by an original executed affidavit and indemnity endorsed by the Borrower in blank (and an unbroken chain of endorsements from each prior holder of such promissory note to the Borrower), or (2) if such promissory note is not issued in the name of the Borrower, an executed copy of each assignment and assumption agreement, transfer document or instrument relating to such Loan evidencing the assignment of such Loan either (x) from the Seller to the Borrower and from the Borrower in blank, or (y) from any prior third party owner thereof directly to the Borrower and from the Borrower in blank; and

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(b)           to the extent applicable for the related Loan, copies of the executed (a) guaranty, (b) credit agreement, (c) loan agreement, (d) note purchase agreement, (e) sale and servicing agreement, (f) acquisition agreement (or similar agreement) and (g) security agreement; provided that to the extent that final copies of the foregoing documents are not available as of the related Funding Date, the latest available draft copies with the final copies to be delivered within ten (10) Business Days after such Funding Date.

“Required Minimum Equity Amount”:  The greater of (x)(I) at any times prior to the SPV Merger Date, $28,125,000 and (II) thereafter, $30,000,000 and (y) the aggregate OLB of the Loans of the three (3) largest Obligors forming part of the Collateral.

“Required Reports”:  Collectively, the Borrowing Base Certificate and the annual statements as to compliance and the annual independent public accountant’s report.

“Responsible Officer”:  With respect to any Person, any duly authorized officer of such Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

“Restricted Payment”:  (i) Any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of membership interests or in any junior class of membership interests of the Borrower; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests of the Borrower now or hereafter outstanding, and (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire membership interests of the Borrower now or hereafter outstanding.

“Review Criteria”:  The meaning specified in Section 7.2(b)(i).

“Revolving Period”:  The period commencing on the Closing Date and ending on the day preceding the earlier to occur of the Revolving Period End Date or the Termination Date.

“Revolving Period End Date”: The earliest to occur of (a) October 27, 2013 and (b) the date of the declaration of the Revolving Period End Date pursuant to Section 9.2(a).

“Revolving Period Termination Date”: The date of the declaration of the Termination Date pursuant to Section 9.2(a).

“S&P”:  Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.

“Sale Agreement”:  The Purchase and Sale Agreement, dated as of the date hereof, in substantially the form of Exhibit H, between the Seller and the Borrower, as amended, modified, waived, supplemented, restated or replaced from time to time.

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“Sale Proceeds”:  With respect to any Loan, all proceeds received as a result of the sale of such Loan, net of all out-of-pocket expenses of the Borrower, the Collateral Administrator and the Collateral Custodian incurred in connection with any such sale.

“Scheduled Payment”:  Each scheduled payment of principal and/or interest required to be made by an Obligor on the related Loan, as adjusted pursuant to the terms of the related Underlying Instruments, if applicable.

“Secured Party”:  (i) Each Lender, (ii) the Administrative Agent and (iii) the Collateral Custodian.

“Securities Account”:  The meaning specified in Section 8-501(a) of the UCC.

“Securities Account Control Agreement”:  The Account Control Agreement, dated as of the date hereof, among the Borrower, as the pledgor, the Collateral Administrator, the Administrative Agent and ▇▇▇▇▇ Fargo, as the Collateral Custodian and as the Securities Intermediary, as the same may be amended, modified, waived, supplemented or restated from time to time.

“Securities Act”:  The U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Securities Intermediary”:  (i) A Clearing Corporation; or (ii) a Person, including a bank or broker, that in the ordinary course of its business maintains Securities Accounts for others and is acting in that capacity.

“Security Certificate”:  The meaning specified in Section 8-102(a)(16) of the UCC.

“Security Entitlement”:  The meaning specified in Section 8-102(a)(17) of the UCC.

“Seller”:  New Mountain Guardian (Leveraged), L.L.C., in its individual capacity as seller of Loans to the Borrower.

“Solvent”:  As to any Person at any time, having a state of affairs such that all of the following conditions are met:  (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction, and does not propose to engage in a business or a transaction, for which such Person’s property assets would constitute unreasonably small capital.

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“SPV Merger”:  A series of merger agreements, contribution agreements and/or similar formation agreements pursuant to which (i) the Collateral Administrator shall acquire the investment portfolio of New Mountain Guardian Debt Funding, L.L.C., an indirect, wholly owned subsidiary of the AIV, and the investment portfolio of New Mountain Guardian Partners, L.P. and its Subsidiaries (thereby owning all existing assets of such entities and assuming all existing liabilities of such entities, including the outstanding Indebtedness financing such investment portfolios) excluding the assets and liabilities of the Borrower and New Mountain Guardian Partners SPV Funding, L.L.C., (ii) the Collateral Administrator shall become owned by the BDC and AIV Holding, (iii) the Collateral Administrator shall continue to hold an equity investment in the Borrower and (iv) New Mountain Guardian Partners SPV Funding, L.L.C. merges with and into the Borrower, with the Borrower being the survivor of such merger.

“SPV Merger Date”:  The date on which the SPV Merger occurs.

“Structuring Fee”:  An amount equal to $1,406,250, due and payable pursuant to Section 2.11(c).

“Subsidiary”:  As to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly, through one or more intermediaries, or both, by such Person.

“Taxable Entity”:  (i) At any time prior to the SPV Merger Date, the AIV and (ii) thereafter, the BDC and AIV Holding.

“Taxable Entity Agreement”:  (i) At any time prior to the SPV Merger Date, the AIV Limited Partnership Agreement and (ii) thereafter, the collective reference to the organizational documents of the BDC and AIV Holding.

“Taxes”:  Any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties, and additions thereto) that are imposed by any Governmental Authority.

“Termination Date”:  The earliest of (a) the date of the termination in whole of the Facility Amount pursuant to Section 2.3(a), (b) the Facility Maturity Date or (c) the date of the declaration of the Termination Date or the date of the automatic occurrence of the Termination Date pursuant to Section 9.2(a).

“Transaction”:  The meaning specified in Section 3.2.

“Transaction Documents”:  This Agreement, the Sale Agreement, the Securities Account Control Agreement, the AIV Indemnity Agreement, each Variable Funding Note, any Joinder Supplement, any Transferee Letter and the Collateral Custodian Fee Letter.

“Transferee Letter”:  The meaning specified in Section 12.16.

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“UCC”:  The Uniform Commercial Code as from time to time in effect in the applicable jurisdiction or jurisdictions.

“Uncertificated Security”:  The meaning specified in Section 8-102(a)(l8) of the UCC.

“Underlying Assets”:  With respect to a Loan, any property or other assets designated and pledged as collateral to secure repayment of such Loan, including, without limitation, to the extent provided for in the relevant Underlying Instruments, a pledge of the stock, membership or other ownership interests in the related Obligor and all Proceeds from any sale or other disposition of such property or other assets.

“Underlying Instruments”:  The loan agreement, credit agreement, indenture or other agreement pursuant to which a Loan or Permitted Investment has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan or Permitted Investment or of which the holders of such Loan or Permitted Investment are the beneficiaries.

“United States”:  The United States of America.

“Unrestricted Cash”: The meaning of “Unrestricted Cash” or any comparable definition in the Underlying Instruments for each Loan, and in any case that “Unrestricted Cash” or such comparable definition is not defined in such Underlying Instruments, all cash available for use for general corporate purposes and not held in any reserve account or legally or contractually restricted for any particular purposes or subject to any lien (other than blanket liens permitted under or granted in accordance with such Underlying Instruments), as reflected on the most recent financial statements of the relevant Obligor that have been delivered to the Borrower.

“Unused Facility Amount”:  (a) At any time prior to the SPV Merger Date, (i) $93,750,000 minus (ii) the Advances Outstanding at such time and (b) at any time on or after the SPV Merger Date, (i) $100,000,000 minus (ii) the Advances Outstanding at such time.

“USA Patriot Act”:  The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

“Value Adjustment Event”: With respect to any Loan, the occurrence of any one or more of the following events after the related Funding Date:

(a)           the Net Senior Leverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is (i) greater than 3.50 and (ii) greater than 0.50 higher than the Original Net Senior Leverage Ratio;

(b)           the Cash Interest Coverage Ratio for any Relevant Test Period of the related Obligor with respect to such Loan is (i) less than 1.50 to 1.00 and (ii) less than 85% of the Original Cash Interest Coverage Ratio;

(c)           a payment default under such Loan (after giving effect to any applicable grace or cure periods, but in any case not to exceed five (5) Business Days, in accordance with the Underlying Instruments);

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(d)           a default under such Loan, together with the election by any Person or group of Persons authorized to exercise any rights or remedies by the applicable Underlying Instruments (including, without limitation, the Borrower) to enforce any of their respective rights or remedies (including, without limitation, acceleration of the Loan) pursuant to the applicable Underlying Instruments;

(e)           the occurrence of a Material Modification with respect to such Loan;

(f)            an Insolvency Event with respect to the related Obligor; or

(g)           the failure to deliver (i) with respect to quarterly reports, any financial statements (including unaudited financial statements) to the Administrative Agent sufficient to calculate either the Net Senior Leverage Ratio or the Cash Interest Coverage Ratio of the related Obligor by the date that is no later than seventy (70) days after the end of the first, second or third quarter of any fiscal year and (ii) with respect to annual reports, any audited financial statements to the Administrative Agent sufficient to calculate either the Net Senior Leverage Ratio or the Cash Interest Coverage Ratio of the related Obligor by the date that is no later than one hundred and thirty (130) days after the end of any fiscal year.

“Variable Funding Note” or “VFN”:  The meaning specified in Section 2.1.

“▇▇▇▇▇ Fargo”:  ▇▇▇▇▇ Fargo Bank, National Association, a national banking association, in its individual capacity, and its successors and assigns.

“WFBNA”: ▇▇▇▇▇ Fargo Bank, National Association, in its capacity as a Lender.

“WFS”: The meaning specified in the Preamble.

Section 1.2.           Other Terms.

All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP.  All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.

Section 1.3.           Computation of Time Periods.

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

Section 1.4.           Limited Partnership Agreements.

Each provision or definition (including defined terms referenced herein) in either Limited Partnership Agreement which provision or definition is used in, incorporated by reference in or otherwise has any effect on a defined term or provision in this Agreement or any other Transaction Document shall be deemed to be references to such defined term or provision (as applicable) in the applicable Limited Partnership Agreement, as the same is in effect as of the date hereof; provided that, upon any amendment to either Limited Partnership Agreement, the

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Administrative Agent, in its sole discretion, may choose to apply any such definition or provision as amended to this Agreement or any of the Transaction Documents, in each case in its sole discretion.

Section 1.5.           Interpretation.

In each Transaction Document, unless a contrary intention appears:

(a)           the singular number includes the plural number and vice versa;

(b)           reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

(c)           reference to any gender includes each other gender;

(d)           reference to day or days without further qualification means calendar days;

(e)           reference to any time means Charlotte, North Carolina time;

(f)            reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor; and

(g)           reference 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 and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision.

ARTICLE II.

THE VARIABLE FUNDING NOTE

Section 2.1.           The Variable Funding Notes.

(a)           On the terms and conditions hereinafter set forth, the Borrower shall deliver (i) on the Closing Date, to each Lender at the applicable address set forth on Annex A to this Agreement, and (ii) on the effective date of any Joinder Supplement, to each additional Lender, at the address set forth in the applicable Joinder Supplement, a duly executed variable funding note in substantially the form of Exhibit B (each a “Variable Funding Note” or “VFN”), dated as of the date of this Agreement, each in a face amount equal to the applicable Lender’s Commitment as of the Closing Date or the effective date of any Joinder Supplement, as applicable, and otherwise duly completed.  Each Variable Funding Note shall evidence

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obligations in an amount equal, at any time, to the outstanding Advances by such Lender under the applicable VFN on such day.

(b)           During the Revolving Period, the Borrower may, at its option, request the Lenders to make advances of funds (each, an “Advance”) under the VFNs pursuant to a Funding Notice, in an aggregate amount up to the Availability as of the proposed Funding Date of the Advance; provided, however, that no Lender shall be obligated to make any Advance on or after the date that is two (2) Business Days prior to the earlier to occur of the Revolving Period End Date or the Termination Date.  Following the receipt of a Funding Notice, subject to the terms and conditions hereinafter set forth, during the Revolving Period, the Lenders shall fund such Advance.  Notwithstanding anything to the contrary herein, no Lender shall be obligated to provide the Borrower with aggregate funds in connection with an Advance that would exceed the least of (i) such Lender’s unused Commitment then in effect, (ii) the aggregate unused Commitments then in effect and (iii) the Availability on the proposed Funding Date of such Advance.

(c)           The Borrower may, with the written consent of the Administrative Agent, add additional Persons as Lenders and increase the Commitments hereunder; provided that the Commitment of any Lender may only be increased with the prior written consent of such Lender and the Administrative Agent.  Each additional Lender shall become a party hereto by executing and delivering to the Administrative Agent and the Borrower a Joinder Supplement and a representation letter in the form of Exhibit I.

Section 2.2.           Procedures for Advances by the Lenders.

(a)           Subject to the limitations set forth in Section 2.1(b), the Borrower may request an Advance from the Lenders by delivering to the Lenders at certain times the information and documents set forth in this Section 2.2.

(b)           No later than 3:00 p.m. (Charlotte, North Carolina time) on the Business Day prior to the proposed Funding Date, the Borrower (or the Collateral Administrator on its behalf) shall deliver:

(i)            to the Administrative Agent and the Collateral Custodian written notice of such proposed Funding Date (including a duly completed Borrowing Base Certificate updated to the date such Advance is requested and giving pro forma effect to the Advance requested and the use of the proceeds thereof);

(ii)           to the Administrative Agent a description of the Obligor and the Loan(s) to be funded by the proposed Advance;

(iii)          to the Administrative Agent a wire disbursement and authorization form, to the extent not previously delivered;

(iv)          to the Administrative Agent and the Collateral Custodian a duly completed Funding Notice which shall (a) specify the desired amount of such Advance, which amount must be at least equal to $500,000, to be allocated to each Lender in accordance with its Pro Rata Share, (b) specify the proposed Funding Date of such Advance, (c) specify the Loan(s)

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to be financed on such Funding Date (including the appropriate file number, Obligor, original loan balance, OLB, Assigned Value and Purchase Price for each Loan and identifying the proposed Advance Rate applicable to each such Loan) and (d) include a representation that all conditions precedent for an Advance described in Article III hereof have been met.  Each Funding Notice shall be irrevocable.  If any Funding Notice is received by the Administrative Agent and each Lender after 3:00 p.m. (Charlotte, North Carolina time) on the Business Day prior to the Business Day for which such Advance is requested or on a day that is not a Business Day, such Funding Notice shall be deemed to be received by the Administrative Agent and each Lender at 9:00 a.m. (Charlotte, North Carolina time) on the next Business Day.

(c)           On the proposed Funding Date, subject to the limitations set forth in Section 2.1(b) and upon satisfaction of the applicable conditions set forth in Article III, each Lender shall make available to the Borrower in same day funds, by wire transfer to the account designated by Borrower in the Funding Notice given pursuant to this Section 2.2, an amount equal to such Lender’s Pro Rata Share of the least of (i) the amount requested by the Borrower for such Advance, (ii) the aggregate unused Commitments then in effect and (iii) an amount equal to the Availability on such Funding Date.

(d)           On each Funding Date, the obligation of each Lender to remit its Pro Rata Share of any such Advance shall be several from that of each other Lender and the failure of any Lender to so make such amount available to the Borrower shall not relieve any other Lender of its obligation hereunder.

Section 2.3.           Reduction of the Facility Amount; Optional Repayments.

(a)           The Borrower shall be entitled at its option, at any time prior to the occurrence of an Event of Default, to terminate the Facility Amount in whole or reduce in part the portion of the Facility Amount that exceeds the sum of the Advances Outstanding, accrued Interest and Breakage Costs; provided that (i) the Borrower shall give at least one (1) Business Day’s prior written notice to the Administrative Agent of such termination or reduction in the form of Exhibit A-2; (ii) any partial reduction of the Facility Amount shall be in an amount equal to $5,000,000 and in integral multiples of $500,000 in excess thereof and (iii) in the case of such termination or reduction on or prior to October 27, 2013, the Borrower shall pay to the Administrative Agent the applicable Commitment Reduction Fee.  Any request for a reduction or termination pursuant to this Section 2.3(a) shall be irrevocable.  The Commitment of each Lender shall be reduced by an amount equal to its Pro Rata Share (prior to giving effect to any reduction of Commitments hereunder) of the aggregate amount of any reduction under this Section 2.3(a).  Notwithstanding anything in this Section 2.3(a) to the contrary, if (A) the Collateral Administrator elects to be regulated as a business development company under ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, (▇) the Collateral Administrator concludes in good faith based on the guidance of the Securities and Exchange Commission and/or the guidance of its legal or accounting advisors that it is advisable to consolidate the Obligations onto its balance sheet for financial reporting purposes, (C) substantially contemporaneously with the conclusion of the Collateral Administrator in clause (B), the Administrative Agent receives a written statement from the Collateral Administrator confirming that such consolidation is advisable and will be undertaken by the Collateral Administrator (the “Consolidation Confirmation”) and (D) the Borrower terminates (1) at least fifty (50) percent of the Facility Amount within three (3) months

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after receipt by the Administrative Agent of the Consolidation Confirmation and (2) one hundred (100) percent of the Facility Amount within six (6) months after receipt by the Administrative Agent of the Consolidation Confirmation, then the Commitment Reduction Fee in connection with such termination of the Facility Amount shall be deemed to be zero; provided that, for the avoidance of doubt, if the Borrower fails to terminate the entire Facility Amount within six (6) months after receipt by the Administrative Agent of the Consolidation Confirmation then the applicable Commitment Termination Fee shall be payable with respect to all of the Facility Amount terminated pursuant to this Section 2.3(a).

(b)           The Borrower shall be entitled at its option, at any time, to reduce Advances Outstanding; provided that (i) the Borrower shall give at least one (1) Business Day’s prior written notice of such reduction in the form of Exhibit A-2 to the Administrative Agent and (ii) any reduction of Advances Outstanding (other than with respect to repayments of Advances Outstanding made by the Borrower to reduce Advances Outstanding such that the Required Advance Reduction Amount is equal to zero) shall be in a minimum amount of $500,000 and in integral multiples of $100,000 in excess thereof.  In connection with any such reduction of Advances Outstanding, the Borrower shall deliver to each Lender (1) instructions to reduce such Advances Outstanding and (2) funds sufficient to repay such Advances Outstanding together with all accrued Interest and any Breakage Costs; provided that, the Advances Outstanding will not be reduced unless sufficient funds have been remitted to pay all such amounts in the succeeding sentence in full.  The Administrative Agent shall apply amounts received from the Borrower pursuant to this Section 2.3(b) to the pro rata reduction of the Advances Outstanding, to the payment of accrued Interest on the amount of the Advances Outstanding to be repaid and to the payment of any Breakage Costs.  Any Advance so repaid may, subject to the terms and conditions hereof, be reborrowed during the Revolving Period.  Any Repayment Notice relating to any repayment pursuant to this Section 2.3(b) shall be irrevocable.

Section 2.4.           Determination of Interest.

The Administrative Agent shall determine the Interest (including unpaid Interest related thereto, if any, due and payable on a prior Payment Date) to be paid by the Borrower with respect to each Advance on each Payment Date for the related Accrual Period and shall advise the Collateral Administrator thereof on the third Business Day prior to such Payment Date.

Section 2.5.           Notations on Variable Funding Notes.

Each Lender is hereby authorized to enter on a schedule attached to the VFN with respect to such Lender, as applicable, a notation (which may be computer generated) or to otherwise record in its internal books and records or computer system with respect to each Advance under the VFN made by the applicable Lender of (a) the date and principal amount thereof and (b) each payment and repayment of principal thereof.  Any such recordation shall, absent manifest error, constitute prima facie evidence of the outstanding Advances, as applicable, under each VFN.  The failure of any Lender to make any such notation on the schedule attached to the applicable VFN shall not limit or otherwise affect the obligation of the Borrower to repay the Advances in accordance with the terms set forth herein.

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Section 2.6.           Principal Repayments.

(a)           Unless sooner prepaid pursuant to the terms hereof, the Advances Outstanding shall be repaid in full on the Termination Date or on such later date as is agreed to in writing by the Borrower, the Collateral Administrator, the Administrative Agent and the Lenders.

(b)           The Required Advance Reduction Amount may be reduced to zero by the Borrower taking one or more of the following actions:

(i)            posts cash collateral in Dollars to the Principal Collection Account;

(ii)           repays Advances Outstanding; or

(iii)          posts additional Eligible Loans as Collateral; provided that the amount by which the Required Advance Reduction Amount shall be reduced pursuant to any such additional Eligible Loans shall be the Assigned Value of such Eligible Loans.

(c)           All repayments of any Advance or any portion thereof shall be made together with payment of (i) all Interest accrued and unpaid on the amount repaid to (but excluding) the date of such repayment and (ii) all Breakage Costs.

Section 2.7.           Settlement Procedures.

(a)           On each Payment Date, so long as no Event of Default has occurred and is continuing, the Collateral Administrator shall direct the Collateral Custodian to pay pursuant to the latest Borrowing Base Certificate (and the Collateral Custodian shall make payment from the Interest Collection Account to the extent of Available Funds, in reliance on the information set forth in such Borrowing Base Certificate) to the following Persons, the following amounts in the following order of priority:

(1)           to the Collateral Custodian, in an amount equal to any accrued and unpaid Collateral Custodian Fees;

(2)           to the Collateral Administrator, in an amount equal to any accrued and unpaid Collateral Administration Fees;

(3)           pro rata to each Lender, in an amount equal to any accrued and unpaid Interest;

(4)           pro rata to (a) each Lender, in an amount equal to any accrued and unpaid Commitment Reduction Fee and Breakage Costs and (b) to the Administrative Agent, any applicable Lender, the Collateral Custodian, the Affected Parties, the Indemnified Parties, or the Secured Parties, as applicable, all Fees and other amounts, including any Increased Costs, but other than the principal of Advances Outstanding, then due under this Agreement;

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(5)           pro rata to each Lender, if the Required Advance Reduction Amount is greater than zero, an amount necessary to reduce the Required Advance Reduction Amount to zero, pro rata in accordance with the amount of Advances Outstanding hereunder;

(6)           to the applicable party, to pay all other Administrative Expenses;

(7)           to the applicable Governmental Authority, any Tax or withholding Tax which, if not paid, could result in a Lien on the assets of the Borrower; and

(8)           any remaining amounts shall be distributed to the Borrower.

(b)           On each Payment Date, so long as no Event of Default has occurred and is continuing, the Collateral Administrator shall direct the Collateral Custodian to pay pursuant to the latest Borrowing Base Certificate (and the Collateral Custodian shall make payment from the Principal Collection Account to the extent of Available Funds, in reliance on the information set forth in such Borrowing Base Certificate) to the following Persons, the following amounts in the following order of priority:

(1)           to the extent not paid pursuant to Section 2.7(a), to the Collateral Custodian, in an amount equal to any accrued and unpaid Collateral Custodian Fees;

(2)           to the extent not paid pursuant to Section 2.7(a), to the Collateral Administrator, in an amount equal to any accrued and unpaid Collateral Administration Fees;

(3)           to the extent not paid pursuant to Section 2.7(a), pro rata to each Lender, in an amount equal to any accrued and unpaid Interest;

(4)           to the extent not paid pursuant to Section 2.7(a), pro rata to (a) each Lender, in an amount equal to any accrued and unpaid Commitment Reduction Fee and Breakage Costs and (b) to the Administrative Agent, any applicable Lender, the Collateral Custodian, the Affected Parties, the Indemnified Parties, or the Secured Parties, all other amounts, including any Increased Costs, but other than the principal of Advances Outstanding, then due under this Agreement;

(5)           to the extent not paid pursuant to Section 2.7(a), pro rata to each Lender, if the Required Advance Reduction Amount is greater than zero, an amount necessary to reduce the Required Advance Reduction Amount to zero, pro rata in accordance with the amount of Advances Outstanding hereunder;

(6)           during the Revolving Period, as directed by the Collateral Administrator, to repay Advances Outstanding, return cash to the Principal Collections Account and/or to be paid to the Borrower;

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(7)           after the end of the Revolving Period, to the Borrower in an amount sufficient to pay when due any Tax arising from Gains (including as a result of market discount) incurred prior to the SPV Merger Date (A) in respect of which no distribution has previously been made pursuant to this Section 2.7(b)(7) and (B) not subject to Independent Verification, calculated in accordance with the assumptions set forth in Section 6.5 of the AIV Limited Partnership Agreement as of the date hereof; provided, however, that the aggregate amount of such Gains  for purposes of such calculation shall be net of any losses of the Borrower or of the AIV, against which such Gains can be offset for tax purposes as of the date of such determination (including any losses from prior periods after the Revolving Period which were not utilized to offset Gains in such prior period);

(8)           after the end of the Revolving Period, to the Lenders to pay the Advances Outstanding;

(9)           to the extent not paid pursuant to Section 2.7(a), to the applicable party to pay all other Administrative Expenses;

(10)         to the extent not paid pursuant to Section 2.7(b)(7), to the applicable Governmental Authority, any Tax or withholding Tax which, if not paid, could result in a Lien on the assets of the Borrower; and

(11)         any remaining amounts shall be distributed to the Borrower.

(c)           The Collateral Administrator may, in its sole discretion, direct the Collateral Custodian to make a payment to the Borrower from the Principal Collection Account on any Business Day other than a Payment Date.

(d)           On each Borrowing Base Certificate delivered on any Payment Date where a distribution is requested pursuant to Section 2.7(b)(7), the Borrower shall set forth an itemized computation of the amount which would be distributed pursuant to Section 2.7(b)(7) (assuming sufficient Available Funds after distributions per Section 2.7(b)(1)-(6)) including calculation in reasonable detail regarding each component of such calculation as set forth herein and in the related Borrowing Base Certificate.  Such Borrowing Base Certificate shall set forth the amount of Gains (minus any such Gains for which a distribution has previously been made pursuant to Section 2.7(b)(7)) pursuant to which such Borrowing Base Certificate is being delivered, the amount of losses of the Borrower and the AIV available to offset such Gains, the applicable tax rates used in calculating such Taxes, and all other factors used to calculate such Tax.  Upon at least one (1) Business Day’s notice to the Borrower and the Collateral Custodian prior to the relevant Payment Date, the Administrative Agent may request independent verification of the inputs and calculations set forth in such Borrowing Base Certificate from an independent accounting firm (an “Independent Verification”), selected by the Administrative Agent, and reasonably acceptable to the Borrower and the AIV.  Such accounting firm shall be required to provide such verification within thirty (30) days of its engagement, and the determination of such  accounting firm shall be final and binding on all parties.  During the verification procedure the Collateral Custodian shall hold all Available Funds otherwise

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distributable on the Payment Date pursuant to Section 2.7(b)(7) in escrow for distribution as soon as such verification is finalized.  All parties to this Agreement shall cooperate fully with such accounting firm and provide, subject to confidentiality arrangements, all information and data requested by such accounting firm. The fee for such accounting firm’s verification shall be borne by the Administrative Agent, unless the determination concludes that there is a five (5) percent or greater overstatement in the amount of distribution set forth in such Borrowing Base Certificate, in which case the fee will be borne by the Borrower and treated as an Administrative Expense.

Section 2.8.           Alternate Settlement Procedures.

                On each Business Day following the occurrence of and during the continuation of an Event of Default, the Collateral Administrator (or, after delivery of a Notice of Exclusive Control, the Administrative Agent) shall direct the Collateral Custodian to pay pursuant to the latest Borrowing Base Certificate (and the Collateral Custodian shall make payment from the Collection Account to the extent of Available Funds, in reliance on the information set forth in such Borrowing Base Certificate) to the following Persons, the following amounts in the following order of priority:

(1)           to the Collateral Custodian, in an amount equal to any accrued and unpaid Collateral Custodian Fees;

(2)           to the Collateral Administrator, in an amount equal to any accrued and unpaid Collateral Administration Fees;

(3)           pro rata to each Lender, in an amount equal to any accrued and unpaid Interest;

(4)           pro rata to (a) each Lender, in an amount equal to any accrued and unpaid Commitment Reduction Fee and Breakage Costs and (b) to the Administrative Agent, any applicable Lender, the Collateral Custodian, the Affected Parties, the Indemnified Parties, or the Secured Parties, as applicable, all other Fees and amounts, including any Increased Costs, but other than the principal of Advances Outstanding, then due under this Agreement;

(5)           pro rata to the Lenders to pay Advances Outstanding;

(6)           to the applicable party, to pay all other Administrative Expenses;

(7)           to the applicable Governmental Authority, any Tax or withholding Tax which, if not paid, could result in a Lien on the assets of the Borrower; and

(8)           any remaining amounts shall be distributed to the Borrower.

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Section 2.9.           Collections and Allocations.

(a)           Collections.  The Collateral Administrator shall promptly identify any collections received as being on account of Interest Collections or Principal Collections and shall transfer, or cause to be transferred, all Collections received directly by it to the appropriate Collection Account by the close of business on the Business Day after such Collections are received.  Upon the transfer of Collections to the Collection Account, the Collateral Administrator shall segregate Principal Collections and Interest Collections and transfer the same to the Principal Collection Account and the Interest Collection Account, respectively.  The Collateral Administrator shall further include a statement as to the amount of Principal Collections and Interest Collections on deposit in the Principal Collection Account and the Interest Collection Account on each Reporting Date in the Borrowing Base Certificate delivered pursuant to Section 5.1(p).

(b)           Excluded Amounts.  With the prior written consent of the Administrative Agent, the Collateral Administrator may withdraw from the Collection Account any deposits thereto constituting Excluded Amounts if the Collateral Administrator has, prior to such withdrawal and consent, delivered to the Administrative Agent and each Lender a report setting forth the calculation of such Excluded Amounts in form and substance reasonably satisfactory to the Administrative Agent and each Lender.

(c)           Initial Deposits.  On the Funding Date with respect to any Loan or Additional Loan, the Collateral Administrator will deposit into the Collection Account all Collections received in respect of Loans being transferred to and included as part of the Collateral on such date.

(d)           Investment of Funds.  Until the occurrence of an Event of Default, to the extent there are uninvested amounts deposited in the Collection Account, all such amounts shall be invested in Permitted Investments selected by the Collateral Administrator on each Payment Date (or pursuant to standing instructions provided by the Collateral Administrator); provided that, from and after the occurrence of an Event of Default, to the extent there are uninvested amounts in the Collection Account, all such amounts may be invested in Permitted Investments selected by the Administrative Agent (which may be standing instructions).  All earnings (net of losses and investment expenses) thereon shall be retained or deposited into the Collection Account and shall be applied on each Payment Date pursuant to the provisions of Section 2.7 and Section 2.8 (as applicable).

Section 2.10.        Payments, Computations, Etc.

(a)           Unless otherwise expressly provided herein, all amounts to be paid or deposited by the Borrower or the Collateral Administrator hereunder shall be paid or deposited in accordance with the terms hereof no later than 3:00 p.m. (Charlotte, North Carolina time) on the day when due in lawful money of the United States in immediately available funds and any amount not received before such time shall be deemed received on the next Business Day.  The Borrower or the Collateral Administrator, as applicable, shall, to the extent permitted by law, pay to the Secured Parties interest on all amounts not paid or deposited when due hereunder at 5.25% per annum above the Prime Rate, payable on demand; provided that such interest rate shall not at

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any time exceed the maximum rate permitted by Applicable Law.  Such interest shall be for the account of the applicable Secured Party.  All computations of interest and other fees hereunder shall be made on the basis of a year consisting of 360 days (other than calculations with respect to the Base Rate, which shall be based on a year consisting of 365 or 366 days, as applicable) for the actual number of days elapsed.

(b)           Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of the payment of Interest or any fee payable hereunder, as the case may be.  For avoidance of doubt, to the extent that Available Funds are insufficient on any Payment Date to satisfy the full amount of any Increased Costs pursuant to Section 2.12, such unpaid amounts shall remain due and owing and shall accrue interest as provided in Section 2.10(a) until repaid in full.

(c)           If any Advance requested by the Borrower is not effectuated as a result of the Borrower’s actions or failure to fulfill any condition under Section 3.2, as the case may be, on the date specified therefor, the Borrower shall indemnify the applicable Lender against any reasonable loss, cost or expense incurred by the applicable Lender, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the applicable Lender to fund or maintain such Advance, but excluding the Applicable Spread.

Section 2.11.        Fees.

(a)           The Collateral Administrator on behalf of the Borrower shall pay or cause to be paid in accordance with Section 2.7(a)(4) and Section 2.8(4), as applicable, to each applicable Lender, quarterly in arrears, the applicable Non-Usage Fee.

(b)           The Collateral Administrator on behalf of the Borrower shall pay or cause to be paid to each applicable Lender, in respect of the Closing Date and each yearly anniversary thereof, the Due Diligence Fee.

(c)           The Collateral Administrator on behalf of the Borrower shall pay or cause to be paid to the Administrative Agent, in respect of the Closing Date, the Structuring Fee.

(d)           The Collateral Custodian shall be entitled to receive the Collateral Custodian Fee in accordance with Section 2.7(a)(1) and Section 2.8(1), as applicable.

(e)           The Borrower shall pay to Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP as counsel to the Administrative Agent, within two (2) Business Days following an invoice therefor, its reasonable estimated fees and out-of-pocket expenses through the Closing Date, and shall pay all additional reasonable fees and out-of-pocket expenses of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP required to be paid by the Borrower hereunder within thirty (30) days after receiving an invoice for such amounts.

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Section 2.12.        Increased Costs; Capital Adequacy; Illegality.

(a)           If either (i) the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation of any Applicable Law or (ii) the compliance by an Affected Party with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), shall (a) subject an Affected Party to any Tax (except for Taxes covered by Section 2.13 and changes in the rate on the overall net income of such Lender) with respect to its interest in the Collateral, or any right or obligation to make Advances hereunder, or on any payment made hereunder, (b) impose, modify or deem applicable any reserve requirement (including, without limitation, any reserve requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in the determination of Interest), special deposit or similar requirement against assets of, deposits with or for the amount of, or credit extended by, any Affected Party or (c) impose any other condition affecting the ownership interest in the Collateral conveyed to the Lenders hereunder or any Affected Party’s rights hereunder or under any other Transaction Document, the result of which is to increase the cost to any Affected Party or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement or under any other Transaction Document, then on the Payment Date following demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered.

(b)           If either (i) the introduction of or any change in or in the interpretation of any law, guideline, rule, regulation, directive or request or (ii) compliance by any Affected Party with any law, guideline, rule, regulation, directive or request from any central bank or other Governmental Authority or agency (whether or not having the force of law), including, without limitation, compliance by an Affected Party with any request or directive regarding capital adequacy has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such introduction, change or compliance (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, on the Payment Date following demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.  For the avoidance of doubt, if the issuance of any amendment or supplement to Interpretation No. 46 or to Statement of Financial Accounting Standards No. 140 by the Financial Accounting Standards Board or any other change in accounting standards or the issuance of any other pronouncement, release or interpretation, causes or requires the consolidation of all or a portion of the assets and liabilities of the Seller, the Borrower or any Lender with the assets and liabilities of the Administrative Agent, any Lender or shall otherwise impose any loss, cost, expense, reduction of return on capital or other loss, such event shall constitute a circumstance on which such Affected Party may base a claim for reimbursement under this Section 2.12.

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(c)           If as a result of any event or circumstance similar to those described in clause (a) or (b) of this Section 2.12, any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within ten (10) days after demand by such Affected Party, the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts payable or paid by it.

(d)           In determining any amount provided for in this Section 2.12, the Affected Party may use any reasonable averaging and attribution methods.  Any Affected Party making a claim under this Section 2.12 shall submit to the Collateral Administrator a written description as to such additional or increased cost or reduction and the calculation thereof, which written description shall be conclusive absent manifest error.

(e)           If a Eurodollar Disruption Event as described in clause (a) of the definition of “Eurodollar Disruption Event” with respect to any Lender occurred, such Lender shall in turn so notify the Borrower, whereupon all Advances Outstanding of the affected Lender in respect of which Interest accrues at the LIBOR Rate shall immediately be converted into Advances Outstanding in respect of which Interest accrues at the Base Rate.

(f)            Failure or delay on the part of any Affected Party to demand compensation pursuant to this Section 2.12 shall not constitute a waiver of such Affected Party’s right to demand or receive such compensation.  Notwithstanding anything to the contrary in this Section 2.12, the Borrower shall not be required to compensate an Affected Party pursuant to this Section 2.12 for any amounts incurred more than six (6) months prior to the date that such Affected Party notifies the Borrower of such Affected Party’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six (6) month period shall be extended to include the period of such retroactive effect.

(g)           Each Lender agrees that it will take such commercially reasonable actions as the Borrower may reasonably request that will avoid the need to pay, or reduce the amount of, any increased amounts referred to in this Section 2.12 or Section 2.13; provided that no Lender shall be obligated to take any actions that would, in the reasonable opinion of such Lender, be disadvantageous to such Lender.  In no event will Borrower be responsible for increased amounts referred to in this Section 2.12 which relates to any other entities to which Lenders provide financing.

Section 2.13.        Taxes.

(a)           All payments made by an Obligor in respect of a Loan and all payments made by the Borrower or Collateral Custodian under this Agreement or any other Transaction Document will be made free and clear of and without deduction or withholding for or on account of any Taxes unless required by Applicable Law.  If any Taxes are required to be withheld from any amounts payable to the Borrower or to any Indemnified Party, then the amount payable to such Person will be increased (the amount of such increase, the “Additional Amount”) such that every net payment made under this Agreement or any other Transaction Document after withholding for or on account of any such Taxes (including, without limitation, any Taxes on

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such increase) is not less than the amount that would have been paid had no such deduction or withholding been made.  The foregoing obligation to pay Additional Amounts with respect to payments required to be made under this Agreement will not, however, apply with respect to (i) net income, franchise Taxes or other similar Taxes imposed on any Indemnified Party (or, in the case of a pass-through entity with respect to such Taxes, any of its beneficial owners) by a taxing jurisdiction in which any such Person (or, in the case of a pass-through entity with respect to such Taxes, any of its beneficial owners) is organized, conducts business or maintains its lending office), (ii) any Taxes that would not have been imposed but for a present or former connection between the Indemnified Party (or, in the case of a pass-through entity with respect to such Taxes, any of its beneficial owners) and the jurisdiction imposing such Taxes (other than a connection arising solely from such Indemnified Party’s having executed, delivered, enforced or performed its obligation, or received payment, under this Agreement), (iii)  any Taxes that are United States federal withholding taxes imposed under FATCA or (iv) any Taxes imposed by reason of the failure of such Indemnified Party (or, in the case of a pass-through entity with respect to such Taxes, any of its beneficial owners) to comply with Section 2.13(d) other than (A) if such failure is due to a Change of Tax Law or (B) if it is legally inadvisable or otherwise commercially disadvantageous for such Indemnified Party to deliver such form or certificate and such form or certificate would require the disclosure of materially different information than the form or certificate that is or would be required with respect to such Indemnified Party pursuant to Section 2.13(d) within fifteen (15) days after the date hereof if it were an Indemnified Party on such date (clauses (i)-(iv), collectively, the “Excluded Taxes”).

(b)           The Borrower hereby indemnifies each Indemnified Party for the full amount of Taxes (other than Excluded Taxes) imposed with respect to any payment made by the Borrower or any Affiliate of the Borrower under this Agreement or any other Transaction Document and Taxes payable by such Person in respect of Additional Amounts and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.  All payments in respect of this indemnification shall be made on the Payment Date following the date a written demand therefor is delivered to the Borrower.

(c)           Within thirty (30) days after the date of any payment by the Borrower, any Affiliate of the Borrower or Collateral Custodian of any withheld Taxes, the Borrower will furnish to the Administrative Agent and each of the Lenders at the applicable address set forth on Annex A to this Agreement a certified copy of the original official receipt evidencing payment of the Tax or, if such original official receipt is not available, other appropriate evidence of payment thereof reasonably acceptable to the Indemnified Party.

(d)           Each Lender shall, to the extent required (and, in the case of a pass-through entity for the applicable Tax purposes, shall cause any of its beneficial owners to), deliver to the Borrower, with a copy to the Administrative Agent, (i) within fifteen (15) days after the date hereof, or at the time or times otherwise reasonably requested by the Borrower or the Administrative Agent, two (or such other number as may from time to time be prescribed by Applicable Law) duly completed copies of U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI or other Form W-8 or Form W-9 (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States taxing authorities or Applicable Law), as appropriate, to permit the Borrower to make payments hereunder for the account of such Lender without deduction or withholding or to permit

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deduction or withholding at a reduced rate of United States federal income or similar Taxes and (ii) upon the obsolescence of or after the occurrence of any event requiring a change in, any form or certificate previously delivered pursuant to this Section 2.13(d), copies (in such numbers as may from time to time be prescribed by Applicable Law or regulations) of such additional, amended or successor forms, certificates or statements as may be required under Applicable Law to permit the Borrower to make payments hereunder for the account of such Lender without deduction or withholding or to permit deduction or withholding at a reduced rate of United States federal income or similar Taxes to the extent such Lender is permitted to do so under Applicable Law.  From time to time, each Lender shall (and, in the case of a pass-through entity for the applicable Tax purpose, shall cause any of its beneficial owners to) promptly submit to the Borrower such additional duly completed and signed forms or certificates (or such successor forms or certificates as shall be adopted from time to time by the relevant taxing authorities) as may then be available under then Applicable Laws to claim any available exemption from or reduction of any Taxes in respect of any payment to be made to such Lender pursuant to this Agreement.

(e)           Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower and the Collateral Administrator contained in this Section 2.13 shall survive the termination of this Agreement.

Section 2.14.        Assignment of the Sale Agreement.

The Borrower hereby assigns to the Administrative Agent, for the ratable benefit of the Secured Parties hereunder, all of the Borrower’s right, title and interest in and to, but none of its obligations under, the Sale Agreement and any UCC financing statements filed under or in connection therewith.  In furtherance and not in limitation of the foregoing, the Borrower hereby assigns to the Administrative Agent for the benefit of the Secured Parties its right to indemnification under Article IX of the Sale Agreement.  The Borrower confirms that the Administrative Agent, on behalf of the Secured Parties, shall have the right to enforce the Borrower’s rights and remedies under the Sale Agreement and any UCC financing statements filed under or in connection therewith for the benefit of the Secured Parties.

Section 2.15.        Discretionary Sales.

Prior to the Revolving Period Termination Date, the Borrower shall have the right to sell Loans (each, a “Discretionary Sale”), subject to the following terms and conditions:

(i)            Any Discretionary Sale shall be made by the Collateral Administrator, on behalf of the Borrower, to an unaffiliated third party purchaser in a transaction (i) reflecting arms-length market terms and (ii) in which the Borrower makes no representations, warranties or covenants and provides no indemnification for the benefit of any other party to the Discretionary Sale (other than that the Borrower has good title thereto, free and clear of all Liens and has the right to sell the related Loan), provided that, the Borrower may make a Discretionary Sale to an Affiliate of the Borrower with the prior written consent of the Administrative Agent in its sole discretion;

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(ii)           After giving effect to the Discretionary Sale, the receipt of funds provided for in clause (iii) below and the assignment to the Borrower of the Collateral on any Discretionary Sale Date, the Administrative Agent and each lender shall have received from the Borrower a certificate establishing (and in the case of clause (a) including detail and a Borrowing Base calculation) that (a) the Required Advance Reduction Amount is equal to zero, (b) the representations and warranties contained in Section 4.1 hereof shall continue to be correct in all material respects, except to the extent relating to an earlier date and (c) no Event of Default shall have resulted;

(iii)          On the related Discretionary Sale Date, the Administrative Agent, each Lender and the Collateral Custodian, as applicable, shall have received, as applicable, in immediately available funds, an amount equal to the sum of (a) an amount sufficient to reduce the Advances Outstanding such that, after giving effect to the transfer of the Loans that are the subject of such Discretionary Sale, the Required Advance Reduction Amount will be equal to zero plus (b) an amount equal to all unpaid Interest then due and owing to the extent reasonably determined by the Administrative Agent and the Lenders to be attributable to that portion of the Advances Outstanding to be repaid in connection with the Discretionary Sale plus (c) an aggregate amount equal to the sum of all other Obligations due and owing to the Administrative Agent, each applicable Lender, the Affected Parties and the Indemnified Parties, as applicable, under this Agreement and the other Transaction Documents;

(iv)          On the related Discretionary Sale Date, the proceeds (net of normal transactional expenses) from such Discretionary Sale have been sent directly into the Collection Account;

(v)           No such Discretionary Sale may, without the prior written consent of the Administrative Agent, in its sole discretion, be made if an Event of Default has occurred and is continuing and the Obligations have been accelerated as a result thereof (and such acceleration has not been rescinded); and

(vi)          During the Revolving Period, the aggregate OLB of all Loans which are sold or intended to be sold by the Borrower in connection with a Discretionary Sale during any 12-month rolling period shall not exceed 30% of the highest aggregate OLB of all Eligible Loans as at any point during such 12-month period (or such lesser number of months as shall have elapsed as of such date); provided that, the Borrower may make Discretionary Sales of Loans exceeding 30% of the highest aggregate OLB of all Eligible Loans as at any point during such 12-month period either (i) with the prior written consent of the Administrative Agent or (ii) if (A) all proceeds from such Discretionary Sales are applied pursuant to Section 2.3(b) to reduce Advances Outstanding and (B) the Facility Amount is concurrently reduced pursuant to Section 2.3(a) by an amount equal to the proceeds from such Discretionary Sales.

If a Loan owned by the Borrower ceases to be an Eligible Loan solely due to a breach of representation or warranties of the seller, that Loan may be sold back to the seller upon notice to (but not the prior written consent of) the Administrative Agent if all other requirements of a Discretionary Sale (as set forth in this Section 2.15) are satisfied as of the date of such sale back to the seller.

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ARTICLE III.

CONDITIONS TO CLOSING AND ADVANCES

Section 3.1.           Conditions to Closing and Initial Advance.

No Lender shall be obligated to make any Advance hereunder on the occasion of the Initial Advance, nor shall any Lender, the Administrative Agent or the Collateral Custodian be obligated to take, fulfill or perform any other action hereunder, until the following conditions have been satisfied, in the sole discretion of, or waived in writing by the Administrative Agent:

(a)           Each Transaction Document shall have been duly executed by, and delivered to, the parties thereto, and the Administrative Agent shall have received such other documents, instruments, agreements and legal opinions as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement, including, without limitation, all those specified in the schedule of condition precedent documents attached hereto as Schedule I, each in form and substance satisfactory to the Administrative Agent;

(b)           The Administrative Agent shall have received satisfactory evidence that the Borrower, the Seller and the Collateral Administrator have obtained all required consents and approvals of all Persons to the execution, delivery and performance of this Agreement and the other Transaction Documents to which each is a party and the consummation of the transactions contemplated hereby or thereby;

(c)           The Borrower and the Collateral Administrator shall each have delivered to the Administrative Agent a certification in the form of Exhibit D, and such certification shall, with respect to the Collateral Administrator, include a representation that the Collateral Administrator has neither incurred nor suffered to exist any Indebtedness as of the Closing Date;

(d)           The Borrower and the Collateral Administrator shall each have delivered to the Administrative Agent a certificate as to whether such entity is Solvent in the form of Exhibit C.

(e)           The Collateral Administrator shall have delivered to the Administrative Agent certification that no Change of Control or Collateral Administrator Termination Event has occurred and is continuing.

(f)            The Administrative Agent shall have received, with a counterpart for each Lender, the executed legal opinion or opinions of Simpson, Thacher & ▇▇▇▇▇▇▇▇ LLP counsel to the Borrower, covering (i) enforceability, grant and perfection of the security interests on the Collateral, (ii) the sale of the Loans to the Borrower and (iii) non-consolidation of the Borrower, in each case in form and substance acceptable to the Administrative Agent in its reasonable discretion.

(g)           The Administrative Agent and each Lender shall have received copies of the Credit and Collection Policy.

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(h)           The Administrative Agent and the Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

(i)            On or prior to the date of the Initial Advance, each applicable Lender shall have received a duly executed copy of its Variable Funding Note, in a principal amount equal to the Commitment of the such Lender.

(j)            The UCC-1 financing statement is in proper form for filing in the filing office of the appropriate jurisdiction and, when filed, together with the Securities Account Control Agreement, is effective to perfect the Secured Parties’ security interest in the Collateral such that the Secured Parties’ security interest in the Collateral ranks senior to that of any other creditors of the Borrower (whether now existing or hereafter acquired).

Section 3.2.           Conditions Precedent to All Advances.

(a)           Each Advance under this Agreement and each reinvestment of Principal Collections pursuant to either Section 2.7(b) or Section 2.7(c) (each, a “Transaction”) shall be subject to the further conditions precedent that:

(i)            with respect to any Advance, the Collateral Administrator shall have delivered to the Administrative Agent (with a copy to the Collateral Custodian) no later than 3:00 p.m. (Charlotte, North Carolina time), one (1) Business Day prior to the related Funding Date:

(1)           a Funding Notice in the form of Exhibit A-1, a Borrowing Base Certificate and a Loan List; and

(2)           a Certificate of Assignment in the form of Exhibit F to the Loan and Security Agreement including Exhibit A thereto and containing such additional information as may be reasonably requested by the Administrative Agent and each Lender;

(ii)           with respect to any reinvestment of Principal Collections permitted by Section 2.7(b), the Collateral Administrator shall have delivered to the Administrative Agent, no later than 3:00 p.m. on the Business Day prior to any such reinvestment, a Reinvestment Notice in the form of Exhibit A-3 and a Borrowing Base Certificate, executed by the Collateral Administrator and the Borrower;

(b)           On the date of such Transaction the following shall be true and correct and the Borrower and the Collateral Administrator shall have certified in the related Borrower’s Notice that all conditions precedent to the requested Advance have been satisfied and shall thereby be deemed to have certified that:

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(i)            The representations and warranties contained in Section 4.1 and Section 4.2 are true and correct in all respects on and as of such day as though made on and as of such day and shall be deemed to have been made on such day (other than any representation and warranty that is made as of a specific date);

(ii)           No event has occurred, or would result from such Transaction or from the application of proceeds thereof, that constitutes an Event of Default, Default or Collateral Administrator Termination Event;

(iii)          On and as of such day, after giving effect to such Transaction, the Availability is greater than or equal to zero;

(iv)          On and as of such day, the Borrower and the Collateral Administrator each has performed all of the covenants and agreements contained in this Agreement to be performed by such Person on or prior to such day;

(v)           No Applicable Law shall prohibit or enjoin the making of such Advance by any Lender or the proposed reinvestment of Principal Collections.

(c)           The Revolving Period End Date or the Termination Date shall not have occurred;

(d)           On the date of such Transaction, the Administrative Agent shall have received such other approvals, opinions or documents as the Administrative Agent may reasonably require;

(e)           The Borrower and Collateral Administrator shall have delivered to the Administrative Agent all reports required to be delivered as of the date of such Transaction including, without limitation, all deliveries required by Section 2.2;

(f)            The Borrower shall have paid all fees then required to be paid and, without duplication of Section 2.11(e), shall have reimbursed the Lenders, the Collateral Custodian and the Administrative Agent for all fees, costs and expenses then required to be paid of closing the transactions contemplated hereunder and under the other Transaction Documents, including the reasonable attorney fees and any other legal and document preparation costs incurred by the Lenders, the Collateral Custodian and the Administrative Agent;

(g)           The Borrower shall have received a copy of a notice substantially in the form of Exhibit A-5 attached hereto, executed by the Administrative Agent, evidencing the approval of the Administrative Agent, in its sole discretion in accordance with clause (B) of the definition of “Eligible Loan”, of the Loans to be added to the Collateral; and

(h)           The Borrower shall have delivered to the Administrative Agent an Officer’s Certificate (which may be part of the applicable Borrower’s Notice) in form and substance reasonably satisfactory to the Administrative Agent certifying that each of the foregoing conditions precedent has been satisfied.

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The failure of the Borrower to satisfy any of the foregoing conditions precedent in respect of any Advance shall give rise to a right of the Administrative Agent and the applicable Lender, which right may be exercised at any time on the demand of the applicable Lender, to rescind the related Advance and direct the Borrower to pay to the Administrative Agent for the benefit of the applicable Lender an amount equal to the Advances made during any such time that any of the foregoing conditions precedent were not satisfied.

Section 3.3.           Custodianship; Transfer of Loans and Permitted Investments.

(a)           The Administrative Agent shall hold all Certificated Securities (whether Loans or Permitted Investments) and Instruments in physical form at the Corporate Trust Office.  Any successor Collateral Custodian shall be a state or national bank or trust company which is not an Affiliate of the Borrower and which is a Qualified Institution.

(b)           Each time that the Borrower (or the Collateral Administrator on behalf of the Borrower) shall direct or cause the acquisition of any Loan or Permitted Investment, the Borrower shall (or the Collateral Administrator on behalf of the Borrower), if such Loan or Permitted Investment has not already been transferred in accordance with its Underlying Instruments (including obtaining any necessary consents) to the Collateral Custodian, cause the transfer of such Loan or Permitted Investment in accordance with its Underlying Instruments (including obtaining any necessary consents) to the Collateral Custodian to be credited by the Collateral Custodian to the Collateral Account in accordance with the terms of this Agreement.  The security interest of the Administrative Agent in the funds or other property utilized in connection with such acquisition shall, immediately and without further action on the part of the Administrative Agent, be released.

(c)           The Borrower (or the Collateral Administrator on behalf of the Borrower) shall cause all Loans or Permitted Investments acquired by the Borrower to be transferred to the Collateral Custodian for credit by the Collateral Custodian to the Collateral Account, and shall cause all Loans and Permitted Investments acquired by the Borrower to be delivered to the Collateral Custodian by one of the following means (and shall take any and all other actions necessary to create and perfect in favor of the Administrative Agent a valid security interest in each Loan and Permitted Investment, which security interest shall be senior (subject to Permitted Liens) to that of any other creditor of the Borrower (whether now existing or hereafter acquired):

(i)            in the case of an Instrument or a Certificated Security represented by a Security Certificate in registered form by having it Indorsed to the Collateral Custodian or in blank by an effective Indorsement or registered in the name of the Administrative Agent and by (A) delivering such Instrument or Security Certificate to the Collateral Custodian at the Corporate Trust Office and (B) causing the Collateral Custodian to maintain (on behalf of the Administrative Agent) continuous possession of such Instrument or Security Certificate at the Corporate Trust Office;

(ii)           in the case of an Uncertificated Security, by (A) causing the Administrative Agent to become the registered owner of such Uncertificated Security and (B) causing such registration to remain effective;

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(iii)          in the case of any Security Entitlement, by causing each such Security Entitlement to be credited to a Securities Account in the name of the Borrower pursuant to the Securities Account Control Agreement;

(iv)          in the case of General Intangibles (including any Loan or Permitted Investment not evidenced by an Instrument) by filing, maintaining and continuing the effectiveness of, a financing statement naming the Borrower as debtor and the Administrative Agent as secured party and describing the Loan or Permitted Investment (as the case may be) as the collateral at the filing office of the Secretary of State for the State of Delaware.

(d)           The security interest of the Administrative Agent in any Collateral disposed of in a transaction permitted by this Agreement shall, immediately and without further action on the part of the Administrative Agent, be released and the Collateral Custodian shall immediately release such Collateral to, or as directed by, the Borrower.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

Section 4.1.           Representations and Warranties of the Borrower.

The Borrower represents and warrants as follows as of the Closing Date, each Funding Date, and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

(a)           Organization and Good Standing.  The Borrower has been duly organized, and is validly existing as a limited liability company in good standing, under the laws of the State of Delaware, with all requisite limited liability company power and authority to own or lease its properties and conduct its business as such business is presently conducted, and had at all relevant times, and now has all necessary power, authority and legal right to acquire, own and sell the Collateral.

(b)           Due Qualification.  The Borrower is (i) duly qualified to do business and is in good standing as a limited liability company in its jurisdiction of formation, and (ii) has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be so qualified or to have obtained such licenses or approvals could not reasonably be expected to have a Material Adverse Effect.

(c)           Power and Authority; Due Authorization; Execution and Delivery. The Borrower (i) has all necessary limited liability company power, authority and legal right to (a) execute and deliver each Transaction Document to which it is a party, and (b) carry out the terms of the Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary limited liability company action, the execution, delivery and performance of each Transaction Document to which it is a party and the transfer and assignment of an ownership and security interest in the Collateral on the terms and conditions herein provided.  This Agreement and each

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other Transaction Document to which the Borrower is a party have been duly executed and delivered by the Borrower.

(d)           Binding Obligation.  Each Transaction Document to which the Borrower is a party constitutes a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms, except as such enforceability may be limited by Insolvency Laws and by general principles of equity (whether considered in a suit at law or in equity).

(e)           No Violation.  The consummation of the transactions contemplated by each Transaction Document to which it is a party and the fulfillment of the terms thereof will not (i) in any material respect conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Borrower’s certificate of formation, operating agreement or any Contractual Obligation of the Borrower, (ii) result in the creation or imposition of any Lien (other than Permitted Liens) upon any of the Borrower’s properties pursuant to the terms of any such Contractual Obligation, other than this Agreement, or (iii) violate any Applicable Law in any material respect.

(f)            Agreements.  The Borrower is not a party to any agreement or instrument or subject to any corporate restriction that has resulted or could reasonably be expected to result in a Material Adverse Effect.  The Borrower is not in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, where such defaults could reasonably be expected to result in a Material Adverse Effect.

(g)           No Proceedings.  There is no litigation, proceeding or investigation pending or, to the knowledge of the Borrower, threatened against the Borrower, before any Governmental Authority (i) asserting the invalidity of any Transaction Document to which the Borrower is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by any Transaction Document to which the Borrower is a party or (iii) that could reasonably be expected to have Material Adverse Effect.

(h)           All Consents Required.  All approvals, authorizations, consents, orders, licenses, filings or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Borrower of each Transaction Document to which the Borrower is a party have been obtained.

(i)            Bulk Sales.  The execution, delivery and performance of this Agreement and the transactions contemplated hereby do not require compliance with any “bulk sales” act or similar law by the Borrower.

(j)            Solvency. The Borrower is not the subject of any Insolvency Proceedings or Insolvency Event.  The transactions under the Transaction Documents to which the Borrower is a party do not and will not render the Borrower not Solvent and the Borrower shall deliver to the Administrative Agent on the Closing Date a certification in the form of Exhibit C.

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(k)           Taxes.

(i)            At all times prior to the SPV Merger Date, (A) the AIV is a United States Person within the meaning of Section 7701(a)(30) of the Code and is treated as a partnership for U.S. federal income tax purposes and (B) the Borrower is, and has always been, a “disregarded entity” of the Collateral Administrator for U.S. federal income tax purposes.

(ii)           At all times on or after the SPV Merger Date, (A) the BDC and AIV Holding are United States Persons within the meaning of Section 7701(a)(30) of the Code and are treated as corporations for U.S. federal income tax purposes, (B) New Mountain Guardian Advisors BDC is a United States Person within the meaning of Section 7701(a)(30) of the Code and is treated for U.S. federal income tax purposes as a disregarded entity wholly owned by a United States person within the meaning of Section 7701(a)(30) of the Code and (C) the Borrower is a “disregarded entity” of the Collateral Administrator for U.S. federal income tax purposes.

(iii)          Each of the Borrower, the AIV, New Mountain Guardian Advisors BDC and each Taxable Entity has filed or caused to be filed all material tax and information returns that are required to be filed by it and has paid or made adequate provisions for the payment of all material Taxes and all material assessments made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Borrower, the AIV, New Mountain Guardian Advisors BDC, or such Taxable Entity, as applicable), and no material tax lien (other than a Permitted Lien in respect of Taxes) has been filed and, to the Borrower’s, the AIV’s, New Mountain Guardian Advisors BDC’s or any Taxable Entity’s knowledge, no claim is being asserted, with respect to any such Tax, fee or other charge.

(l)            Exchange Act Compliance; Regulations T, U and X.  None of the transactions contemplated herein or in the other Transaction Documents (including, without limitation, the use of the proceeds from the transfer of the Collateral) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.  The Borrower does not own or intend to carry or purchase, and no proceeds from the Advances will be used to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purpose credit” within the meaning of Regulation U.

(m)          Security Interest.

(i)            This Agreement creates a valid and continuing security interest (as defined in the UCC as in effect from time to time in the State of New York) in the Collateral in favor of the Administrative Agent, on behalf of the Secured Parties, which security interest is validly perfected under Article 9 of the UCC and is prior to all other Liens (except for Permitted Liens), and is enforceable as such against creditors of and purchasers from the Borrower;

(ii)           the Collateral is comprised of “instruments”, “security entitlements”, “general intangibles”, “certificated securities”, “uncertificated securities”, “securities accounts”, “investment property” and “proceeds” (each as defined in the applicable

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UCC) and such other categories of collateral under the applicable UCC as to which the Borrower has complied with its obligations under Section 4.1(m)(i);

(iii)          with respect to Collateral that constitute Security Entitlements:

(1)           all of such Security Entitlements have been credited to one of the Accounts and the securities intermediary for each Account has agreed to treat all assets credited to such Account as Financial Assets within the meaning of the UCC as in effect from time-to-time in the State of New York;

(2)           the Borrower has taken all steps necessary to enable the Administrative Agent to obtain “control” (within the meaning of the UCC as in effect from time-to-time in the State of New York) with respect to each Account; and

(3)           the Accounts are not in the name of any Person other than the Borrower, subject to the lien of the Administrative Agent.  The Borrower has not instructed the securities intermediary of any Account to comply with the entitlement order of any Person other than the Administrative Agent; provided that, until the Administrative Agent delivers a Notice of Exclusive Control, the Borrower and the Collateral Administrator may cause cash in the Accounts to be invested in Permitted Investments, and the proceeds thereof to be distributed in accordance with this Agreement.

(iv)          all Accounts constitute “securities accounts” as defined in the Section 8-501(a) of the UCC as in effect from time-to-time in the State of New York;

(v)           the Borrower owns and has good and marketable title to the Collateral free and clear of any Lien (other than Permitted Liens) of any Person;

(vi)          the Borrower has received all consents and approvals required by the terms of any Loan to the transfer and granting of a security interest in the Loans hereunder to the Administrative Agent, on behalf of the Secured Parties;

(vii)         the Borrower has taken all necessary steps to authorize the Administrative Agent to file all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in that portion of the Collateral in which a security interest may be perfected by filing pursuant to Article 9 of the UCC as in effect in the Borrower’s jurisdiction of organization;

(viii)        other than the security interest granted to the Administrative Agent, on behalf of the Secured Parties, pursuant to this Agreement, the Borrower has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral.  The Borrower has not authorized the filing of and is not aware of any financing statements against the Borrower that include a description of any collateral included in the Collateral other than any financing statement (A) relating to the security interest granted to the Borrower under the Sale Agreement or (B) that has been terminated and/or fully and validly assigned to the Administrative Agent on or prior to the date hereof.  There are no judgments or tax lien filings against the Borrower;

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(ix)           all original executed copies of each underlying promissory note that constitute or evidence each Loan that is evidenced by a promissory note has been or, subject to the delivery requirements contained herein, will be delivered to the Collateral Custodian;

(x)            other than in the case of Noteless Loans, the Borrower has received, or subject to the delivery requirements contained herein will receive, a written acknowledgment from the Collateral Custodian that the Collateral Custodian or its bailee is holding the underlying promissory notes that evidence all Loans evidenced by a promissory note solely on behalf of the Administrative Agent for the benefit of the Secured Parties;

(xi)           none of the underlying promissory notes that constitute or evidence the Loans has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Administrative Agent on behalf of the Secured Parties;

(xii)          with respect to Collateral that constitutes a “certificated security,” such certificated security has been delivered to the Collateral Custodian on behalf of the Administrative Agent and, if in registered form, has been specially Indorsed to the Collateral Custodian or in blank by an effective Indorsement or has been registered in the name of the Administrative Agent upon original issue or registration of transfer by the Borrower of such certificated security; and

(xiii)         in the case of an Uncertificated Security, by (A) causing the Administrative Agent to become the registered owner of such Uncertificated Security and (B) causing such registration to remain effective.

(n)           Reports Accurate.  All information, exhibits, financial statements, documents, books, records or reports furnished or to be furnished by the Borrower to the Administrative Agent or any Lender in connection with this Agreement are true, complete and correct in all material respects.

(o)           Location of Offices.  The Borrower’s location (within the meaning of Article 9 of the UCC) is, and at all times has been, the State of Delaware.  The Borrower’s Federal Employee Identification Number is correctly set forth on Exhibit D.  The Borrower has not changed its name (whether by amendment of its certificate of formation, by reorganization or otherwise) or its jurisdiction of organization and has not changed its location within the four (4) months preceding the Closing Date.

(p)           Collection Account.  The Collection Accounts (including any sub accounts thereof) are the only accounts to which Collections on the Collateral are sent.

(q)           Legal Name.  The Borrower’s exact legal name is, and at all times has been, New Mountain Guardian SPV Funding, L.L.C.

(r)            Sale Agreement.  The Sale Agreement is the only agreement pursuant to which the Borrower purchases Collateral from the Seller.

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(s)           Value Given.  The Borrower shall have given reasonably equivalent value to the Seller or the applicable third party seller of Collateral in consideration for the transfer to the Borrower of the Collateral, and no such transfer shall have been made for or on account of an antecedent debt, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

(t)            Accounting.  The Borrower accounts for the transfers to it of interests in Collateral as sales for legal (other than tax) purposes on its books, records and financial statements, in each case consistent with GAAP and with the requirements set forth herein.

(u)           Special Purpose Entity.  The Borrower has not and shall not:

(i)            engage in any business or activity other than the purchase and receipt of Collateral, the transfer and pledge of Collateral under the Transaction Documents and such other activities as are incidental thereto;

(ii)           acquire or own any assets other than (a) the Collateral, (b) Permitted Investments and (c) incidental property as may be necessary for the operation of the Borrower and the performance of its obligations under the Transaction Documents;

(iii)          merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets (other than in accordance with the provisions hereof), without in each case first obtaining the consent of the Administrative Agent (which consent in connection with the SPV Merger shall not be unreasonably withheld), or except as permitted by this Agreement, change its legal structure, or jurisdiction of formation;

(iv)          fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Administrative Agent (which consent in connection with the SPV Merger shall not be unreasonably withheld), amend, modify, terminate or fail to comply with the provisions of its operating agreement, or fail to observe limited liability company formalities;

(v)           own any Subsidiary or make any Investment in any Person (other than Permitted Investments) without the consent of the Administrative Agent;

(vi)          except as permitted by this Agreement, commingle its assets with the assets of any of its Affiliates, or of any other Person;

(vii)         incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness to the Secured Parties hereunder or in conjunction with a repayment of all Advances owed to the Lenders and a termination of all the Commitments;

(viii)        become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;

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(ix)           fail to maintain its records, books of account and bank accounts separate and apart from those of any other Person;

(x)            enter into any contract or agreement with any Person, except (a) the Transaction Documents, (b) other contracts or agreements that are upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with third parties other than such Person and (c) with the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld), contracts and agreements in connection with the SPV Merger;

(xi)           seek its dissolution or winding up in whole or in part;

(xii)          fail to correct any known misunderstandings regarding the separate identity of the Borrower and the Seller or any principal or Affiliate thereof or any other Person;

(xiii)         guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;

(xiv)        fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (a) to mislead others as to the identity of the Person with which such other party is transacting business, or (b) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates);

(xv)         fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;

(xvi)        file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;

(xvii)       except as may be required or permitted by the Code and regulations or other applicable state or local tax law, hold itself out as or be considered as a department or division of (a) any of its principals or Affiliates, (b) any Affiliate of a principal or (c) any other Person;

(xviii)      fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person;

(xix)         fail to pay its own liabilities and expenses only out of its own funds;

(xx)          fail to pay the salaries of its own employees, if any, in light of its contemplated business operations;

(xxi)         acquire the obligations or securities of its Affiliates or stockholders;

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(xxii)        guarantee any obligation of any person, including an Affiliate;

(xxiii)       fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;

(xxiv)       fail to use separate invoices and checks bearing its own name;

(xxv)        pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Secured Parties hereunder;

(xxvi)       (A) fail at any time to have at least one (1) independent manager or director (the “Independent Manager”) who is not currently a director, officer, employee, trade creditor shareholder, manager or member (or spouse, parent, sibling or child of the foregoing) of (a) the Collateral Administrator, (b) any principal or Affiliate of the Collateral Administrator (other than being manager or director of the Borrower); provided that such Independent Manager may be an independent manager or an independent director of another special purpose entity affiliated with the Collateral Administrator or (B) fail to ensure that all limited liability company action relating to the selection, maintenance or replacement of the Independent Manager are duly authorized by the unanimous vote of the board of managers (including the Independent Manager);

(xxvii)      fail to provide that the unanimous consent of all members (including the consent of the Independent Manager) is required for the Borrower to (a) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (b) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (c) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (d) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (e) make any assignment for the benefit of the Borrower’s creditors, (f) admit in writing its inability to pay its debts generally as they become due, or (g) take any action in furtherance of any of the foregoing; and

(xxviii)     take or refrain from taking, as applicable, each of the activities specified in (A) prior to the SPV Merger Date, the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, dated as of the date hereof or (B) on and after the SPV Merger Date, the non-consolidation opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, dated on or about the SPV Merger Date, in each case upon which the conclusions expressed therein are based.

(v)           Bankruptcy.  The Borrower has received in writing from the Seller confirmation that the Seller will not cause the Borrower to file a voluntary petition under the Bankruptcy Code or Insolvency Laws.

(w)          Investment Company Act.  The Borrower is not, and, at any time prior to the SPV Merger Date, is not “controlled by”, an “investment company” within the meaning of, and is not subject to regulation under, the 1940 Act except pursuant to Section 12(d)(1) thereof.

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(x)            ERISA.  Except as would not reasonably be expected to constitute a Material Adverse Effect, (i) the present value of all benefits vested under all “employee pension benefit plans,” as such term is defined in Section 3 of ERISA which are subject to Title IV of ERISA and maintained by the Borrower, or in which employees of the Borrower are entitled to participate, other than a Multiemployer Plan (the “Pension Plans”), does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the most recent annual financial statements reflecting such amounts), (ii) no non-exempt prohibited transactions, failures to satisfy minimum funding standards, withdrawals or reportable events within the meaning of 4043 of ERISA, other than those events as to which the 30-day notice period referred to in Section 4043(c) of ERISA has been waived, (each a “Reportable Event”) have occurred with respect to any Pension Plans that, in the aggregate, could subject the Borrower to any material tax, penalty or other liability and (iii) no notice of intent to terminate a Pension Plan has been filed, nor has any Pension Plan been terminated under Section 4041(f) of ERISA, nor has the Pension Benefit Guaranty Corporation instituted proceedings to terminate, or appoint a trustee to administer a Pension Plan and no event has occurred or condition exists that might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.

(y)           Compliance with Law.  The Borrower has complied in all material respects with all Applicable Law to which it may be subject, and no item of Collateral contravenes in any material respect any Applicable Law (including, without limitation, all applicable predatory and abusive lending laws, laws, rules and regulations relating to licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy).

(z)            Collections.  The Borrower acknowledges that all Collections received by it or its Affiliates with respect to the Collateral transferred hereunder are held and shall be held in trust for the benefit of the Secured Parties until deposited into the Collection Account within two Business Days after receipt as required herein.

(aa)         Amendments.  No Loan has been amended, modified or waived, except for amendments, modifications or waivers, if any, to such Collateral otherwise permitted under Section 6.4(a) and in accordance with the Credit and Collection Policy.

(bb)         Full Payment.  As of the Funding Date thereof, the Borrower has no knowledge of any fact which should lead it to expect that any Loan will not be repaid by the Borrower in full.

(cc)         Accuracy of Representations and Warranties.  Each representation or warranty by the Borrower contained herein or in any report, financial statement, exhibit, schedule, certificate or other document furnished by the Borrower pursuant hereto, in connection herewith or in connection with the negotiation hereof is true and correct in all material respects.

(dd)         Members of the Borrower.  The sole member of the Borrower is a “United States Person” within the meaning of Section 7701(a)(30) of the Code.

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(ee)         USA Patriot Act.  Neither the Borrower nor any Affiliate of the Borrower is (i) a country, territory, organization, person or entity named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or territory named on such lists or which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA Patriot Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision; or (iv) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA Patriot Act as warranting special measures due to money laundering concerns.

The representations and warranties in Section 4.1(m) shall survive the termination of this Agreement and such representations and warranties may not be waived by any party hereto without the consent of the Administrative Agent.

Section 4.2.           Representations and Warranties of the Borrower Relating to the Agreement and the Collateral.

The Borrower hereby represents and warrants, as of the Closing Date and as of each Funding Date:

(a)           Valid Security Interest.  This Agreement constitutes a security agreement within the meaning of Section 9-102(a)(73) of the UCC as in effect from time to time in the State of New York. Upon the delivery to the Collateral Custodian of all Collateral constituting “instruments” and “certificated securities” (as defined in the UCC as in effect from time to time in the jurisdiction where the Collateral Custodian’s Corporate Trust Office is located), the crediting of all Collateral that constitutes Financial Assets (as defined in the UCC as in effect from time to time in the State of New York) to an Account and the filing of the financing statements described in Section 4.1(m) in the jurisdiction in which the Borrower is located, such security interest shall be a valid and first priority perfected security interest in all of the Collateral (subject to Permitted Liens) in that portion of the Collateral in which a security interest may be created under 9 of the UCC as in effect from time to time in the State of New York.

(b)           Eligibility of Collateral.  The Borrower has conducted such due diligence and other review as it considered necessary with respect to the Loans set forth on Schedule III.  As of the Closing Date and each Funding Date, (i) the Loan List and the information contained in each Funding Notice delivered pursuant to Section 2.2, is an accurate and complete listing in all material respects of all Loans included in the Collateral as of the related Funding Date and the information contained therein with respect to the identity of such Loans and the amounts owing thereunder is true, correct and complete in all material respects as of the related Funding Date, (ii) each such Loan included in the Borrowing Base is an Eligible Loan, (iii) each Loan included in the Collateral is free and clear of any Lien of any Person (other than Permitted Liens) and in compliance with all Applicable Laws in all material respects and (iv) with respect to each Loan included in the Collateral, all material consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be

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obtained, effected or given by the Borrower in connection with the transfer of an ownership interest or security interest in such Collateral to the Administrative Agent as agent for the benefit of the Secured Parties have been duly obtained, effected or given and are in full force and effect.

(c)           No Fraud.  Each Loan was originated without any fraud or material misrepresentation by the Seller or, to the best knowledge of the Borrower, on the part of the Obligor.

Section 4.3.           Representations and Warranties of the Collateral Administrator.

The Collateral Administrator represents and warrants as follows as of the Closing Date, each Funding Date, and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:

(a)           Organization and Good Standing.  The Collateral Administrator has been duly organized, and is validly existing as a limited liability company in good standing, under the laws of the State of Delaware, with all requisite limited liability company power and authority to own or lease its properties and conduct its business as such business is presently conducted.

(b)           Due Qualification.  The Collateral Administrator is duly qualified to do business and is in good standing as a limited liability company, and has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals, except where the failure to be so qualified or in good standing or to have obtained such licenses or approvals could not reasonably be expected to have a Material Adverse Effect.

(c)           Power and Authority; Due Authorization; Execution and Delivery.  The Collateral Administrator (i) has all necessary limited liability company power, authority and legal right to (a) execute and deliver each Transaction Document to which it is a party, and (b) carry out the terms of the Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary limited liability company action, the execution, delivery and performance of each Transaction Document to which it is a party.  This Agreement and each other Transaction Document to which the Collateral Administrator is a party have been duly executed and delivered by the Collateral Administrator.

(d)           Binding Obligation.  Each Transaction Document to which the Collateral Administrator is a party constitutes a legal, valid and binding obligation of the Collateral Administrator enforceable against the Collateral Administrator in accordance with its respective terms, except as such enforceability may be limited by Insolvency Laws and general principles of equity (whether considered in a suit at law or in equity).

(e)           No Violation.  The consummation of the transactions contemplated by each Transaction Document to which it is a party and the fulfillment of the terms thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Collateral Administrator’s certificate of formation, operating agreement or any Contractual Obligation of the Collateral Administrator, (ii) result in the creation or imposition of any Lien (other than Permitted Liens) upon any of the

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Collateral Administrator’s properties pursuant to the terms of any such Contractual Obligation, other than this Agreement, or (iii) violate any Applicable Law in any material respect.

(f)            No Proceedings.  There is no litigation, proceeding or investigation pending or, to the knowledge of the Collateral Administrator, threatened against the Collateral Administrator, before any Governmental Authority (i) asserting the invalidity of any Transaction Document to which the Collateral Administrator is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by any Transaction Document to which the Collateral Administrator is a party or (iii) that could reasonably be expected to have Material Adverse Effect.

(g)           All Consents Required.  All approvals, authorizations, consents, orders, licenses, filings or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Collateral Administrator of each Transaction Document to which the Collateral Administrator is a party have been obtained.

(h)           Reports Accurate.  All information, exhibits, financial statements, documents, books, records or reports furnished or to be furnished by the Collateral Administrator to the Administrative Agent or any Lender in connection with this Agreement are true, complete and correct in all material respects.

(i)            Collections.  The Collateral Administrator acknowledges that all Collections received by it or its Affiliates with respect to the Collateral transferred or pledged hereunder are held and shall be held in trust for the benefit of the Secured Parties until deposited into the Collection Account within two (2) Business Days from receipt as required herein.

(j)            Solvency.  The Collateral Administrator is not the subject of any Insolvency Proceedings or Insolvency Event.  The transactions under the Transaction Documents to which the Collateral Administrator is a party do not and will not render the Collateral Administrator not Solvent and the Collateral Administrator shall deliver to the Administrative Agent on the Closing Date a certification in the form of Exhibit C.

(k)           Taxes.  At all times prior to the SPV Merger Date, the Collateral Administrator is, and has always been a “disregarded entity” of the AIV for U.S. federal income tax purposes and at all times on or after the SPV Merger Date, the Collateral Administrator is a United States Person within the meaning of Section 7701(a)(30) of the Code, is treated as a partnership for U.S. federal income tax purposes, and is owned by New Mountain Guardian Advisors BDC, the Taxable Entities and other entities that are United States Persons within the meaning of Section 7701(a)(30) of the Code.  Each of the Collateral Administrator and its equity owners have filed or caused to be filed all material tax and information returns that are required to be filed by it and has paid or made adequate provisions for the payment of all material Taxes and all material assessments made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Collateral Administrator), and no material tax lien (other than a Permitted Lien in respect of Taxes) has been filed and, to the Collateral Administrator’s knowledge, no claim is being asserted, with respect to any such Tax, fee or other charge.

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(l)            ERISA.  Except as would not reasonably be expected to constitute a Material Adverse Effect, (i) the present value of all benefits vested under all Pension Plans of the Collateral Administrator does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the most recent annual financial statements reflecting such amounts), (ii) no Reportable Events have occurred with respect to any Pension Plans that, in the aggregate, could subject the Collateral Administrator to any material tax, penalty or other liability and (iii) no notice of intent to terminate a Pension Plan has been filed, nor has any Pension Plan been terminated under Section 4041(f) of ERISA, nor has the Pension Benefit Guaranty Corporation instituted proceedings to terminate, or appoint a trustee to administer a Pension Plan and no event has occurred or condition exists that might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.

(m)          Investment Company Act.  At all times prior to the SPV Merger Date, the Collateral Administrator is not, and is not “controlled by”, an “investment company” within the meaning of the 1940 Act or is exempt from the provisions of the 1940 Act, except Section 12(d)(1) thereof.

(n)           Compliance with Law.  The Collateral Administrator has complied in all material respects with all Applicable Law to which it may be subject, and no item of Collateral contravenes in any material respect any Applicable Law (including, without limitation, all applicable predatory and abusive lending laws, laws, rules and regulations relating to licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy).

(o)           No Material Adverse Effect.  No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect on the Collateral Administrator since August 18, 2010.

(p)           Members of the Collateral Administrator.  The sole member (or, after the SPV Merger, each member) of the Collateral Administrator is a “United States Person” within the meaning of Section 7701(a)(30) of the Code.

(q)           Actions of the Collateral Administrator.  The Collateral Administrator acknowledges and agrees that, as of the date hereof, all of the Loans owned by the Borrower as of the Closing Date (or subject to irrevocable commitments to purchase by the Borrower for settlement (as participations or assignments) after the Closing Date) are owned by way of an assignment (and not a participation) and are as set forth on Schedule III and hereby consents to the acquisition by the Borrower on the Closing Date (or, in respect of Loans with respect to which the Borrower has entered into irrevocable commitments to purchase as of the Closing Date for settlement after the Closing Date) of each Loan set forth on Schedule III.

Section 4.4.           Representations and Warranties of the Collateral Custodian.

The Collateral Custodian in its individual capacity and as Collateral Custodian represents and warrants as follows:

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(a)           Organization; Power and Authority.  It is a duly organized and validly existing national banking association in good standing under the laws of the United States.  It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Custodian under this Agreement.

(b)           Due Authorization.  The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Custodian, as the case may be.

(c)           No Conflict.  The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the material terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Custodian is a party or by which it or any of its property is bound.

(d)           No Violation.  The execution and delivery of this Agreement, the performance of the Transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any material respect, any Applicable Law as to the Collateral Custodian.

(e)           All Consents Required.  All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Custodian, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Custodian of the transactions contemplated hereby and the fulfillment by the Collateral Custodian of the terms hereof have been obtained.

(f)            Validity, Etc.  The Agreement constitutes the legal, valid and binding obligation of the Collateral Custodian, enforceable against the Collateral Custodian in accordance with its terms, except as such enforceability may be limited by applicable Insolvency Laws and general principles of equity (whether considered in a suit at law or in equity).

ARTICLE V.

GENERAL COVENANTS

Section 5.1.           Affirmative Covenants of the Borrower.

The Borrower covenants and agrees with the Lenders that so long as this Agreement shall remain in effect and until the principal of and interest on Advances and all other Fees, expenses or amounts payable under any Transaction Document shall have been paid in full:

(a)           Compliance with Laws.  The Borrower will comply in all material respects with all Applicable Laws, including those with respect to the Collateral or any part thereof.

(b)           Preservation of Company Existence.  The Borrower will (i) preserve and maintain its company existence, rights, franchises and privileges in the jurisdiction of its

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formation, (ii) qualify and remain qualified in good standing as a limited liability company in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect and (iii) maintain the Borrower LLC Agreement in full force and effect and shall not amend the same without the prior written consent of the Administrative Agent.  For the avoidance of doubt, the SPV Merger is permitted under this Section 5.1(b).

(c)           Performance and Compliance with Collateral.  The Borrower will, at its expense, timely and fully perform and comply (or cause the Seller to perform and comply pursuant to the Sale Agreement) with all provisions, covenants and other promises required to be observed by it under the Collateral, the Transaction Documents and all other agreements related to such Collateral.

(d)           Keeping of Records and Books of Account.  The Borrower will keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. The Borrower will permit any representatives designated by the Administrative Agent to visit and inspect the financial records and the properties of such person at reasonable times and as often as reasonably requested, without unreasonably interfering with such party’s business and affairs and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent to discuss the affairs, finances and condition of such person with the officers thereof and independent accountants therefor, in each case, other than (x) material and affairs protected by the attorney-client privilege and (y) materials which such party may not disclose without violation of confidentiality obligations binding upon it.  For the avoidance of doubt, the right of the Administrative Agent provided herein to visit and inspect the financial records and properties of the Borrower shall be limited to not more than one (1) such visit and inspection in any fiscal quarter; provided that after the occurrence of an Event of Default and during its continuance, there shall be no limit to the number of such visits and inspections, and after the resolution of such Event of Default, the number of visits occurring in the current fiscal quarter shall be deemed to be zero.

(e)           Protection of Interest in Collateral.  With respect to the Collateral acquired by the Borrower, the Borrower will (i) acquire such Collateral pursuant to and in accordance with the terms of the Sale Agreement or directly from a third party, (ii) (at the Collateral Administrator’s expense) take all action necessary to perfect, protect and more fully evidence the Borrower’s ownership of such Collateral free and clear of any Lien other than the Lien created hereunder and Permitted Liens, including, without limitation, (a) with respect to the Loans and that portion of the Collateral in which a security interest may be perfected by filing and maintaining (at the Collateral Administrator’s expense), effective financing statements against the Obligor in all necessary or appropriate filing offices, (including any amendments thereto or assignments thereof) and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof) and (b) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, (iii) permit the Administrative Agent or its respective agents or representatives to visit the offices of the Borrower during normal office hours and upon reasonable notice examine and make copies of all documents, books, records and other information concerning the Collateral and discuss matters related thereto with any of the officers

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or employees of the Borrower having knowledge of such matters, and (iv) take all additional action that the Administrative Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Collateral.

(f)            Deposit of Collections.

(i)            The Borrower shall, or cause the Collateral Administrator to, instruct each Obligor to deliver all Collections in respect of the Collateral attributable to (A) Interest Collections paid by such Obligor to the Interest Collections Account and (B) Principal Collections paid by such Obligor to the Principal Collections Account.

(ii)           The Borrower shall promptly (but in no event later than three (3) Business Days after receipt) deposit all Collections received by such party in respect of the Collateral into the appropriate Collection Account as set forth in clause (i) above.

(g)           Special Purpose Entity.  The Borrower shall be in compliance with the special purpose entity requirements set forth in Section 4.1(u).

(h)           Credit and Collection Policy.  The Borrower will (a) comply in all material respects with the Credit and Collection Policy in regard to the Collateral, and (b) furnish to the Administrative Agent prior to its effective date, prompt written notice of any changes in the Credit and Collection Policy.  The Borrower will not agree to or otherwise permit to occur any material change in the Credit and Collection Policy without the prior written consent of the Administrative Agent; provided that no consent shall be required from the Administrative Agent in connection with any change mandated by Applicable Law or a Governmental Authority as evidenced by an Opinion of Counsel to that effect delivered to the Administrative Agent.

(i)            Events of Default.  Promptly following the Borrower’s knowledge or notice of the occurrence of any Event of Default or Default, the Borrower will provide the Administrative Agent with written notice of the occurrence of such Event of Default or Default of which the Borrower has knowledge or has received notice.  In addition, such notice will include a written statement of a Responsible Officer of the Borrower setting forth the details of such event and the action that the Borrower proposes to take with respect thereto.

(j)            Obligations and Taxes.

(i)            Each of the Borrower, New Mountain Guardian Advisors BDC and the Taxable Entities shall pay its respective material Indebtedness and other obligations promptly and in accordance with their terms and pay and discharge promptly when due all material Taxes and withholding Tax obligations before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof and enforce all material indemnities and rights against Obligors and investors in New Mountain Guardian Advisors BDC and the Taxable Entities with respect to any material Tax or withholding Tax; provided, that such payment and discharge shall not be required with respect to any such Taxes or other obligations so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and each of the Borrower, New Mountain Guardian Advisors BDC and the Taxable Entities shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such

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contest operates to suspend collection of the contested obligation or Taxes and enforcement of a Lien.

(ii)           At all times prior to the SPV Merger Date, (A) the AIV was a United States Person within the meaning of Section 7701(a)(30) of the Code and was treated as a partnership for U.S. federal income tax purposes and (B) the Borrower was a “disregarded entity” of the Collateral Administrator for U.S. federal income tax purposes.

(iii)          At all times on or after the SPV Merger Date, (A) the BDC and AIV Holding will be United States Persons within the meaning of Section 7701(a)(30) of the Code and will be treated as corporations for U.S. federal income tax purposes, (B) New Mountain Guardian Advisors BDC will be a United States Person within the meaning of Section 7701(a)(30) of the Code and will be treated for U.S. federal income tax purposes as a disregarded entity wholly owned by a United States person within the meaning of Section 7701(a)(30) of the Code and (C) the Borrower will be a “disregarded entity” of the Collateral Administrator.

(iv)          Each of the Borrower, the AIV, New Mountain Guardian Advisors BDC and each Taxable Entity will file or cause to be filed all material tax and information returns that are required to be filed by it.

(k)           Use of Proceeds.  The Borrower will use the proceeds of the Advances only to acquire Loans, to make distributions to its member in accordance with the terms hereof or to pay related expenses (including expenses payable hereunder).

(l)            Obligor Notification Forms.  The Administrative Agent may, in its discretion after the occurrence of a Collateral Administrator Termination Event or an Event of Default, send notification forms giving the Obligors notice of the Secured Parties’ interest in the Collateral and the obligation to make payments as directed by the Administrative Agent; provided that, in the case of an occurrence of an Event of Default (other than an Event of Default described in Section 9.1(g)), the Administrative Agent may not send any notification forms to any Obligor until the earlier of (i) the next payment date of the applicable Eligible Loan related to such Obligor or (ii) thirty (30) days from the occurrence of such Event of Default.

(m)          Adverse Claims.  The Borrower will not create, or participate in the creation of, or permit to exist, any Liens on any of the Accounts other than the Lien created by this Agreement.

(n)           Notices.  The Borrower will furnish to the Administrative Agent:

(i)            Income Tax Liability.  Within ten (10) Business Days after the receipt of revenue agent reports or other written proposals, determinations or assessments of the Internal Revenue Service or any other taxing authority which propose, determine or otherwise set forth positive adjustments to the Tax liability of, or assess or propose the collection of Taxes required to have been withheld by, the Borrower, the Collateral Administrator, New Mountain Guardian Advisors BDC, any Taxable Entity or any equity owner of the Collateral Administrator which equal or exceed $1,000,000 in the aggregate, telephonic or facsimile notice (confirmed in writing within five (5) Business Days) specifying the nature of the items giving rise to such adjustments and the amounts thereof;

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(ii)           Auditors’ Management Letters.  Promptly after the receipt thereof, any auditors’ management letters are received by the Borrower or by its accountants;

(iii)          Representations and Warranties.  Promptly after receiving knowledge or notice of the same, the Borrower shall notify the Administrative Agent if any representation or warranty set forth in Section 4.1 or Section 4.2 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Administrative Agent a written notice setting forth in reasonable detail the nature of such facts and circumstances.  In particular, but without limiting the foregoing, the Borrower shall notify the Administrative Agent in the manner set forth in the preceding sentence before any Funding Date of any facts or circumstances within the knowledge of the Borrower which would render any of the said representations and warranties untrue as of such Funding Date;

(iv)          ERISA.  Promptly after receiving notice of any “reportable event” (as defined in Title IV of ERISA) with respect to the Borrower (or any ERISA Affiliate thereof), a copy of such notice;

(v)           Proceedings.  As soon as possible and in any event within three (3) Business Days after an executive officer of the Borrower receives notice or obtains knowledge thereof, notice of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral, the Transaction Documents, the Secured Parties’ interest in the Collateral, or the Borrower, the Collateral Administrator or the Seller or any of their Affiliates; provided that notwithstanding the foregoing, any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral, the Transaction Documents, the Secured Parties’ interest in the Collateral, or the Borrower, the Collateral Administrator, the Seller or any of their Affiliates in excess of $1,000,000 or more shall be deemed to be material for purposes of this Section 5.1(n);

(vi)          Notice of Certain Events.  Promptly upon becoming aware thereof, notice of (1) any Collateral Administrator Termination Event, (2) any Value Adjustment Event, (3) any Change of Control, (4) any other event or circumstance that could reasonably be expected to have a Material Adverse Effect, (5) any event or circumstance whereby any Loan which was included in the latest calculation of the Borrowing Base as an Eligible Loan shall fail to meet one or more of the criteria (other than criteria waived by the Administrative Agent on or prior to the related Funding Date in respect of such Loan) listed in the definition of “Eligible Loan”, (6) of the occurrence of any default by an Obligor on any Loan, (7) any amendment to the Fund Limited Partnership Agreement, (8) the date on which the SPV Merger will occur and (9) the date on which the IPO Date will occur;

(vii)         Corporate Changes.  As soon as possible and in any event within fifteen (15) Business Days after the effective date thereof, notice of any change in the name, jurisdiction of organization, corporate structure or location of records of the Borrower or the Collateral Administrator; provided that the Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or

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otherwise that are required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral; and

(viii)        Accounting Changes.  As soon as possible and in any event within three (3) Business Days after the effective date thereof, notice of any change in the accounting policies of the Borrower.

(o)           Contest Recharacterization.  The Borrower shall in good faith contest or attempt to recharacterize the treatment of the Loans as property of the bankruptcy estate of the Seller.

(p)           Payment Date Reporting.  The Borrower shall deliver (or shall cause to be delivered) a Borrowing Base Certificate, determined as of the day that is two Business Days prior to each Payment Date, and delivered to the Administrative Agent and Collateral Custodian not later than the Business Day preceding the related Payment Date.  Each such Borrowing Base Certificate shall contain instructions to the Collateral Custodian to withdraw on the related Payment Date from the applicable Collection Account and pay or transfer amounts set forth in such report in the manner specified, and in accordance with the priorities established, in Section 2.7 or Section 2.8, as applicable.

(q)           [Intentionally Omitted.]

(r)            [Intentionally Omitted.]

(s)           Assets Under Management.  Prior to the IPO Date, the Borrower will cause the General Partner to submit to the Administrative Agent and each Lender, within the time periods specified in Section 5.1(u) below, a certification by the General Partner of the aggregate assets and commitments of the New Mountain Funds as of the end of such fiscal quarter.

(t)            Available Capital.  Prior to the IPO Date the Borrower will cause the General Partner to submit to the Administrative Agent and each Lender, within the time periods specified in Section 5.1(u) below, a certification by the General Partner (i) of the amount of Available Capital as of the end of such fiscal quarter and (ii) that the terms and conditions specified in the definition of Available Capital are satisfied as of the date of the certification.

(u)           Fund Financial Statements.  Prior to the IPO Date, the Borrower will cause the Fund to submit to the Administrative Agent and each Lender promptly (but in any event within three (3) Business Days of the distribution by the Fund to its investors of the same), (A) after the end of each of its fiscal quarters (excluding the fiscal quarter ending on the date specified in clause (B)), commencing March 31, 2011, consolidated unaudited financial statements of the Fund for the most recent fiscal quarter, and (B) after the end of each fiscal year, commencing with the fiscal year ended December 31, 2010, consolidated audited financial statements of the Fund, audited by a firm of nationally recognized independent public accountants.

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(v)           Borrower Financial Statements.  The Borrower will submit to the Administrative Agent and each Lender, (A) within sixty (60) days after the end of each of its fiscal quarters (excluding the fiscal quarter ending on the date specified in clause (B)), commencing March 31, 2011, consolidated unaudited financial statements of the Borrower for the most recent fiscal quarter, (B) within ninety (90) days after the end of each fiscal year, commencing with the fiscal year ended December 31, 2010, consolidated audited financial statements of the Borrower, audited by a firm of nationally recognized independent public accountants.

(w)          BDC Financial Statements.  After the SPV Merger Date, the Borrower will cause the BDC to submit to the Administrative Agent and each Lender, (A) within sixty (60) days after the end of each of its fiscal quarters (excluding the fiscal quarter ending on the date specified in clause (B)), commencing with the first fiscal quarter after the SPV Merger Date, consolidated unaudited financial statements of the BDC for the most recent fiscal quarter, (B) within ninety (90) days after the end of each fiscal year, commencing with the first fiscal year ended after the SPV Merger Date, consolidated audited financial statements of the BDC, audited by a firm of nationally recognized independent public accountants.

(x)            Further Assurances.  The Borrower will execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing UCC and other financing statements, agreements or instruments) that may be required under applicable law, or that the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by the Transaction Documents and in order to grant, preserve, protect and perfect the validity and first priority (subject to Permitted Liens) of the security interests and Liens created or intended to be created hereby.  Such security interests and Liens will be created hereunder and the Borrower shall deliver or cause to be delivered to the Administrative Agent all such instruments and documents (including legal opinions and lien searches) as it shall reasonably request to evidence compliance with this Section 5.1(x). The Borrower agrees to provide such evidence as the Administrative Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien.

(y)           Non-Consolidation.  The Borrower shall (i) at all times prior to the SPV Merger Date act in a manner such that each of the assumptions made by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in their opinion delivered pursuant to Section 3.1(f)(iii) is true and accurate in all material respects and (ii) at all times on and after the SPV Merger Date act in a manner such that each of the assumptions made by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in their opinion delivered pursuant to Section 5.1(bb)(i)(4) is true and accurate in all material respects.  The Borrower shall at all times observe and be in compliance in all material respects with all covenants and requirements in the Borrower LLC Agreement.

(z)            [Intentionally Omitted].

(aa)         Payment of Fees and Expenses.  The Administrative Agent and the Lenders shall have received, within one (1) Business Day of the Closing Date, all fees to be received in respect of the Closing Date referred to herein.

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(bb)         SPV Merger Deliverables.

(i)            No later than two (2) Business Days prior to the occurrence of the SPV Merger Date, the Borrower shall deliver drafts of each of the following documents in form and substance acceptable to the Administrative Agent in its reasonable discretion:

(1)           a certification from each of the Borrower and the Collateral Administrator in the form of Exhibit D, and such certification shall, with respect to the Collateral Administrator, include a representation that the Collateral Administrator has neither incurred nor suffered to exist any Indebtedness as of the SPV Merger Date, other than with respect to the Existing Facilities;

(2)           a certificate from each of the Borrower and the Collateral Administrator as to whether such entity is Solvent in the form of Exhibit C;

(3)           a certification from the Collateral Administrator that no Change of Control or Collateral Administrator Termination Event has occurred and is continuing;

(4)           the legal opinion or opinions of Simpson, Thacher & ▇▇▇▇▇▇▇▇ LLP counsel to the Borrower and the Collateral Administrator, covering (i) customary corporate opinions of the Collateral Administrator and (ii) non-consolidation of the Borrower; and

(5)           the Collateral Administrator LLC Agreement referred to in clause (b) of the definition thereof.

(ii)           Within one (1) Business Day after the occurrence of the SPV Merger, the Borrower shall deliver to the Administrative Agent duly executed copies of each document specified in Section 5.1(bb)(i), in each case, unless otherwise agreed in writing by the Administrative Agent, in the form approved by the Administrative Agent pursuant to Section 5.1(bb)(i).

(cc)         Other.  The Borrower will furnish to the Administrative Agent promptly, from time to time, such other information, documents, records or reports respecting the Collateral or the condition or operations, financial or otherwise, of the Collateral Administrator or the Borrower as the Administrative Agent may from time to time reasonably request in order to protect the interests of the Administrative Agent or the other Secured Parties under or as contemplated by this Agreement.

Section 5.2.           Negative Covenants of the Borrower.

During the Covenant Compliance Period:

(a)           Other Business.  The Borrower will not (i) engage in any business other than (A) entering into and performing its obligations under the Transaction Documents and other activities contemplated by the Transaction Documents, (B) the acquisition, ownership and management of the Collateral and (C) the sale of Loans as permitted hereunder, (ii) incur any Indebtedness, obligation, liability or contingent obligation of any kind other than pursuant to this Agreement or (iii) form any Subsidiary or make any Investment in any other Person.

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(b)           Collateral Not to be Evidenced by Instruments.  The Borrower will take no action to cause any Loan that is not, as of the Closing Date or the related Funding Date, as the case may be, evidenced by an Instrument, to be so evidenced except in connection with the enforcement or collection of such Loan or unless such Instrument is promptly delivered to the Administrative Agent, together with an Indorsement in blank, as collateral security for such Loan.

(c)           Security Interests.  Except as otherwise permitted herein and in respect of any Discretionary Sale, the Borrower will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any Collateral, whether now existing or hereafter transferred hereunder, or any interest therein.  The Borrower will promptly notify the Administrative Agent of the existence of any Lien (other than Permitted Liens) on any Collateral and the Borrower shall defend the right, title and interest of the Administrative Agent, as agent for the Secured Parties in, to and under the Collateral against all claims of third parties; provided that nothing in this Section 5.2(c) shall prevent or be deemed to prohibit the Borrower from suffering to exist Permitted Liens upon any of the Collateral.

(d)           Mergers, Acquisitions, Sales, etc.  The Borrower will not be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or all or substantially all of the equity interests of any other Person, or sell, transfer, convey or lease all or substantially all of its assets, or sell or assign with or without recourse any Collateral or any interest therein (other than in connection with the SPV Merger or as otherwise permitted pursuant to this Agreement or the Sale Agreement).

(e)           Sales of Loans.  On and after the SPV Merger Date, the Borrower shall not purchase any Loans from, or sell any Loans to, the Seller or any Affiliate thereof.

(f)            Change of Location of Underlying Instruments.  The Borrower shall not, without the prior consent of the Administrative Agent, consent to the Collateral Custodian moving any Certificated Securities or Instruments from the Collateral Custodian’s Corporate Trust Office on the Closing Date, unless the Borrower has given at least thirty (30) days’ written notice to the Administrative Agent and has taken all actions required under the UCC of each relevant jurisdiction in order to ensure that the Secured Parties’ first priority perfected security interest (subject to Permitted Liens) continues in effect.

(g)           Accounting of Purchases.  Other than for tax purposes, the Borrower will not account for or treat (whether in financial statements or otherwise) the transactions contemplated by the Sale Agreement in any manner other than as a sale of the Collateral to the Borrower.

(h)           ERISA Matters.  Except as would not reasonably be expected to constitute a Material Adverse Effect, the Borrower will not (a) engage or knowingly permit any ERISA Affiliate to engage in any prohibited transaction for which an exemption is not available or has not previously been obtained from the United States Department of Labor, (b) permit to exist any failure to satisfy minimum funding standards, as defined in Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with respect to any Pension Plan other than a Multiemployer Plan, (c) fail to make or knowingly permit any ERISA Affiliate to fail to make,

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any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto, (d) terminate any Pension Plan so as to result in any liability, or (e) permit to exist any occurrence of any Reportable Event with respect to a Pension Plan.

(i)            Operating Agreement; Sale Agreement.  The Borrower will not amend, modify, waive or terminate any provision of its operating agreement or the Sale Agreement without the prior written consent of the Administrative Agent.

(j)            Changes in Payment Instructions to Obligors.  The Borrower will not make any change, or permit the Collateral Administrator to make any change, in its instructions to Obligors regarding payments to be made with respect to the Collateral to the Collection Account, unless the Administrative Agent has consented to such change.

(k)           Extension or Amendment of Collateral.  The Borrower will not, except as otherwise permitted in Section 6.4(a) extend, amend or otherwise modify the terms of any Loan.

(l)            Fiscal Year.  The Borrower shall not change its fiscal year or method of accounting without providing the Administrative Agent with prior written notice (i) providing a detailed explanation of such changes and (ii) including a pro forma financial statements demonstrating the impact of such change.

(m)          Change of Control.  The Borrower shall not enter into any transaction or agreement which results in a Change of Control.

(n)           Members of the Borrower.  The Borrower shall not permit any Person which is not a “United States Person” within the meaning Section 7701(a)(30) of the Code to own any membership interests in the Borrower.

(o)           Sole Ownership.  The Borrower shall not have more than one (1) owner of its membership interests during the term of this Agreement.

(p)           Disregarded Entities.  The Borrower shall not file any election or take any position to be other than a “disregarded entity” for U.S. tax purposes.

(q)           Limited Partnership Agreements.  Prior to the IPO Date, the Borrower shall provide notice to the Administrative Agent of any amendment to any Limited Partnership Agreement promptly following the effectiveness of such amendment.

Section 5.3.           Affirmative Covenants of the Collateral Administrator.

The Collateral Administrator covenants and agrees with the Lenders that so long as this Agreement shall remain in effect and until the principal of and interest on Advances and all other Fees, expenses or amounts payable under any Transaction Document shall have been paid in full:

(a)           Compliance with Law.  The Collateral Administrator will comply in all material respects with all Applicable Law, including those with respect to the Collateral or any part thereof.

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(b)           Preservation of Company Existence.  The Collateral Administrator will (i) preserve and maintain its company existence, rights, franchises and privileges in the jurisdiction of its formation and (ii) qualify and remain qualified in good standing as a limited liability company in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.  For the avoidance of doubt, the merger of the Collateral Administrator in connection with the SPV Merger is permitted under this Section 5.3(b).

(c)           Performance and Compliance with Collateral.  The Collateral Administrator will duly fulfill and comply with all obligations on the part of the Borrower to be fulfilled or complied with under or in connection with each item of Collateral and will do nothing to impair the rights of the Administrative Agent, as agent for the Secured Parties, or of the Secured Parties in, to and under the Collateral.

(d)           Keeping of Records and Books of Account.

(i)            The Collateral Administrator will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Collateral in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Collateral and the identification of the Collateral.

(ii)           The Collateral Administrator shall permit the Administrative Agent or its designated representatives to visit the offices of the Collateral Administrator during normal office hours and upon reasonable notice and examine and make copies of all documents, books, records and other information concerning the Collateral and discuss matters related thereto with any of the officers or employees of the Collateral Administrator having knowledge of such matters.

(iii)          The Collateral Administrator will on or prior to the date hereof, ▇▇▇▇ its master data processing records and other books and records relating to the Collateral with a legend, acceptable to the Administrative Agent, describing (A) the sale of the Collateral to the Borrower pursuant to the Sale Agreement and (B) the transfer of the Collateral from the Borrower to the Administrative Agent as agent for the Secured Parties hereunder.

(e)           Preservation of Security Interest.  The Collateral Administrator (at its own expense) will authorize the Administrative Agent to file such financing and continuation statements and any other documents that may be required by any law or regulation of any Governmental Authority to preserve and protect fully the first priority perfected ownership and security interest of the Administrative Agent, as agent for the Secured Parties in, to and under the Loans and proceeds thereof and that portion of the Collateral in which a security interest may be perfected by filing.

(f)            Credit and Collection Policy.  The Collateral Administrator will (i) comply in all material respects with the Credit and Collection Policy in regard to the Collateral, and (ii) furnish to the Administrative Agent prior to its effective date, prompt written notice of any changes in the Credit and Collection Policy.  The Collateral Administrator will not agree to

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or otherwise permit to occur any material change in the Credit and Collection Policy without the prior written consent of the Administrative Agent; provided that no consent shall be required from the Administrative Agent in connection with any change mandated by Applicable Law or a Governmental Authority as evidenced by an Opinion of Counsel to that effect delivered to the Administrative Agent.  Compliance by the Collateral Administrator with this covenant shall be deemed to constitute compliance by the Borrower with its corresponding obligations under Sections 5.1(h).

(g)           Events of Default.  Promptly following the Collateral Administrator’s knowledge or notice of the occurrence of any Event of Default or Default, the Collateral Administrator will provide the Administrative Agent with written notice of the occurrence of such Event of Default or Default of which the Collateral Administrator has knowledge or has received notice.  In addition, such notice will include a written statement of a Responsible Officer of the Collateral Administrator setting forth the details of such event and the action that the Collateral Administrator proposes to take with respect thereto.

(h)           Taxes.

(i)            Each of the Collateral Administrator and its equity owners shall pay its material Indebtedness and other obligations promptly and in accordance with their terms and timely pay and discharge promptly when due all material Taxes and withholding Tax obligations before the same shall become delinquent or in default, as well as all material lawful claims for labor, materials and supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part thereof and enforce all material indemnities and rights against Obligors and investors in the Taxable Entities with respect to any material Tax or withholding Tax; provided, that such payment and discharge shall not be required with respect to any such Taxes or other obligations so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Collateral Administrator shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation or Taxes and enforcement of a Lien.  Each of the Collateral Administrator and its equity owners shall file or cause to be filed all material Tax and information returns required to be filed by it.

(ii)           At all times prior to the SPV Merger Date, the Collateral Administrator was a “disregarded entity” of the AIV for U.S. federal income tax purposes and at all times on or after the SPV Merger Date, the Collateral Administrator will be United States Person within the meaning of Section 7701(a)(30) of the Code, will be treated as a partnership for U.S. federal income tax purposes, and will be owned by the Taxable Entities and other entities that are United States Persons within the meaning of Section 7701(a)(30) of the Code.

(i)            Other.  The Collateral Administrator will promptly furnish to the Administrative Agent such other information, documents, records or reports respecting the Collateral or the condition or operations, financial or otherwise, of the Collateral Administrator as the Administrative Agent may from time to time reasonably request in order to protect the interests of the Administrative Agent or Secured Parties under or as contemplated by this Agreement.

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(j)            Proceedings.  The Collateral Administrator will furnish to the Administrative Agent, as soon as possible and in any event within three (3) Business Days after the Collateral Administrator receives notice or obtains knowledge thereof, notice of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral, the Transaction Documents, the Secured Parties’ interest in the Collateral, or the Borrower, the Collateral Administrator or the Seller or any of their Affiliates; provided that notwithstanding the foregoing, any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral, the Transaction Documents, the Secured Parties’ interest in the Collateral, or the Borrower, the Collateral Administrator, the Seller or any of their Affiliates in excess of $1,000,000 or more shall be deemed to be material for purposes of this Section 5.3(j).

(k)           Deposit of Collections.  The Collateral Administrator shall promptly (but in no event later than two (2) Business Days after receipt) deposit into the Collection Account any and all Collections received by the Borrower or the Collateral Administrator.

(l)            Required Notices.  The Collateral Administrator will furnish to the Administrative Agent, promptly upon becoming aware thereof, notice of (1) any Collateral Administrator Termination Event, (2) any Value Adjustment Event, (3) any Change of Control, (4) any other event or circumstance that could reasonably be expected to have a Material Adverse Effect, (5) any event or circumstance whereby any Loan which was included in the latest calculation of the Borrowing Base as an Eligible Loan shall fail to meet one or more of the criteria (other than criteria waived by the Administrative Agent on or prior to the related Funding Date in respect of such Loan) listed in the definition of “Eligible Loan” or (6) the occurrence of any default by an Obligor on any Loan.

(m)          Accounting Changes.  As soon as possible and in any event within three (3) Business Days after the effective date thereof, the Collateral Administrator will provide to the Administrative Agent notice of any change in the accounting policies of the Collateral Administrator.

Section 5.4.           Negative Covenants of the Collateral Administrator.

During the Covenant Compliance Period:

(a)           Mergers, Acquisition, Sales, etc.  The Collateral Administrator will not be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or all or substantially all of the equity interests any other Person, or sell, transfer, convey or lease all or substantially all of its assets, or sell or assign with or without recourse any Collateral or any interest therein (other than in connection with the SPV Merger or as otherwise permitted pursuant to this Agreement or the Sale Agreement).

(b)           Change of Location of Underlying Instruments.  The Collateral Administrator shall not, without the prior consent of the Administrative Agent, consent to the

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Collateral Custodian moving any Certificated Securities or Instruments from the Collateral Custodian’s Corporate Trust Office on the Closing Date, unless the Collateral Administrator has given at least thirty (30) days’ written notice to the Administrative Agent and has authorized the Administrative Agent to take all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Administrative Agent as agent for the Secured Parties in the Collateral.

(c)           Change in Payment Instructions to Obligors.  The Collateral Administrator will not make any change in its instructions to Obligors regarding payments to be made with respect to the Collateral to the Collection Account, unless the Administrative Agent has consented to such change.

(d)           Extension or Amendment of Collateral.  The Collateral Administrator will not, except as otherwise permitted in Section 6.4(a), extend, amend or otherwise modify the terms of any Loan.

(e)           Members of the Collateral Administrator.  The Collateral Administrator shall not permit any Person which is not a “United States Person” within the meaning Section 7701(a)(30) of the Code to own any membership interests in the Borrower.

(f)            Sole Ownership.  Prior to the SPV Merger Date, the Collateral Administrator shall not have more than one (1) owner of its membership interests during the term of this Agreement.

(g)           Disregarded Entities.  Prior to the SPV Merger Date, the Collateral Administrator shall not file any election or take any position to be other than a “disregarded entity” for U.S. tax purposes.

(h)           Restrictions With Respect to Permitted Financing Arrangements.  The Collateral Administrator shall not incur or suffer to exist any Indebtedness (other than Indebtedness under the Existing Facilities) without (i) providing prior written notice to the Administrative Agent of its intention to enter into a Permitted Financing Arrangement pursuant to which it will incur Indebtedness, (ii) requiring each lender under any such Permitted Financing Arrangement to expressly acknowledge that it has (A) no recourse to (x) the Collateral and (y) the membership interests (in whole or in part) of the Borrower and (B) that any amounts owed to such lender under the related agreement pursuant to which any such Indebtedness is incurred are expressly subordinate to the Collateral and any proceeds of the Collateral, (iii) include both a non-petition provision and a third party beneficiary provision with respect to the Secured Parties, in form and substance acceptable to Administrative Agent and (iv) providing evidence to the Administrative Agent of its compliance with the requirements set forth in clauses (ii) and (iii).

Section 5.5.           Affirmative Covenants of the Collateral Custodian.

During the Covenant Compliance Period:

(a)           Compliance with Law.  The Collateral Custodian will comply in all material respects with all Applicable Law.

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(b)           Preservation of Existence.  The Collateral Custodian will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.

(c)           Location of Underlying Instruments.  Subject to Section 7.8, the Underlying Instruments shall remain at all times in the possession of the Collateral Custodian at the Corporate Trust Office unless notice of a different address is given in accordance with the terms hereof or unless the Administrative Agent agrees to allow certain Underlying Instruments to be released to the Collateral Administrator on a temporary basis in accordance with the terms hereof, except as such Underlying Instruments may be released pursuant to this Agreement.

Section 5.6.           Negative Covenants of the Collateral Custodian.

During the Covenant Compliance Period:

(a)           Underlying Instruments.  The Collateral Custodian will not dispose of any documents constituting the Underlying Instruments in any manner that is inconsistent with the performance of its obligations as the Collateral Custodian pursuant to this Agreement and will not dispose of any Collateral except as contemplated by this Agreement.

(b)           No Changes to Collateral Custodian Fee.  The Collateral Custodian will not make any changes to the Collateral Custodian Fee set forth in the Collateral Custodian Fee Letter without the prior written approval of the Administrative Agent and the Borrower.

ARTICLE VI.

COLLATERAL ADMINISTRATION

Section 6.1.           Designation of the Collateral Administrator.

Subject to Section 6.11, the servicing, administering and collection of the Collateral shall be conducted by the Collateral Administrator.

Section 6.2.           Duties of the Collateral Administrator.

(a)           Appointment.  The Borrower hereby appoints the Collateral Administrator as its agent to service the Collateral and enforce its rights and remedies in, to and under such Collateral.  The Collateral Administrator hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto as set forth herein.  The Collateral Administrator and the Borrower hereby acknowledge that the Administrative Agent and the other Secured Parties are third party beneficiaries of the obligations undertaken by the Collateral Administrator hereunder.

(b)           Duties.  The Collateral Administrator shall take or cause to be taken all such actions as may be necessary or advisable to collect on the Collateral from time to time, all

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in accordance with Applicable Law and the Credit and Collection Policy.  Without limiting the foregoing, the duties of the Collateral Administrator shall include the following:

(i)            preparing and submitting claims to, and acting as post-billing liaison with, Obligors on each Loan (for which no administrative or similar agent exists);

(ii)           maintaining all necessary records and reports with respect to the Collateral and providing such reports to the Administrative Agent in respect of the management and administration of the Collateral (including information relating to its performance under this Agreement) as may be required hereunder or as the Administrative Agent may reasonably request;

(iii)          maintaining and implementing administrative and operating procedures (including, without limitation, an ability to recreate management and administration records evidencing the Collateral in the event of the destruction of the originals thereof) and keeping and maintaining all documents, books, records and other information reasonably necessary or advisable for the collection of the Collateral;

(iv)          promptly delivering to the Administrative Agent or the Collateral Custodian, from time to time, such information and management and administration records (including information relating to its performance under this Agreement) as the Administrative Agent or the Collateral Custodian may from time to time reasonably request;

(v)           identifying each Loan clearly and unambiguously in its records to reflect that such Loan is owned by the Borrower and that the Borrower is transferring an ownership interest therein to the Secured Parties pursuant to this Agreement;

(vi)          notifying the Administrative Agent of any material action, suit, proceeding, dispute, offset, deduction, defense or counterclaim (1) that is or is threatened to be asserted by an Obligor with respect to any Loan (or portion thereof) of which it has knowledge or has received notice; or (2) that could reasonably be expected to have a Material Adverse Effect;

(vii)         providing the prompt written notice to the Administrative Agent, prior to the effective date thereof, of any proposed changes in the Credit and Collection Policy;

(viii)        using its reasonable best efforts to maintain the first priority, perfected security interest (subject to Permitted Liens) of the Administrative Agent, as agent for the Secured Parties, in the Collateral;

(ix)           maintaining the Loan File(s) with respect to Loans included as part of the Collateral; provided that upon the occurrence and during the continuance of an Event of Default or a Collateral Administrator Termination Event, the Administrative Agent may request the Loan File(s) to be sent to the Administrative Agent or its designee;

(x)            with respect to each Loan included as part of the Collateral, making the Loan File available for inspection by the Administrative Agent, upon reasonable advance notice, at the offices of the Collateral Administrator during normal business hours; and

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(xi)           directing the Collateral Custodian to make payments pursuant to the instructions set forth in the latest Borrowing Base Certificate in accordance with Section 2.7 and Section 2.8 and preparing such other reports as required pursuant to Section 6.8.

It is acknowledged and agreed that in circumstances in which a Person other than the Borrower or the Collateral Administrator acts as lead agent with respect to any Loan, the Collateral Administrator shall perform its administrative and management duties hereunder only to the extent that, as a lender under the related loan syndication Underlying Instruments, it has the right to do so.

(c)           Notwithstanding anything to the contrary contained herein, the exercise by the Administrative Agent or the Secured Parties of their rights hereunder (including, but not limited to, the delivery of a Collateral Administrator Termination Notice), shall not release the Collateral Administrator, the Seller or the Borrower from any of their duties or responsibilities with respect to the Collateral.  The Secured Parties, the Administrative Agent and the Collateral Custodian shall not have any obligation or liability with respect to any Collateral, other than to use reasonable care in the custody and preservation of collateral in such party’s possession, nor shall any of them be obligated to perform any of the obligations of the Collateral Administrator hereunder.

(d)           Any payment by an Obligor in respect of any Indebtedness owed by it to the Borrower shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Administrative Agent, be applied as a collection of a payment by such Obligor (starting with the oldest such outstanding payment due) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.

Section 6.3.           Authorization of the Collateral Administrator.

(a)           Each of the Borrower, the Administrative Agent and each Lender hereby authorizes the Collateral Administrator to take any and all reasonable steps in its name and on its behalf necessary or desirable in the determination of the Collateral Administrator and not inconsistent with the sale of the Collateral to the Borrower under the Sale Agreement and thereafter, the transfer by the Borrower to the Administrative Agent, on behalf of the Secured Parties, hereunder, to collect all amounts due under any and all Collateral, including, without limitation, endorsing any of their names on checks and other instruments representing Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Collateral and, after the delinquency of any Collateral and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof, to the same extent as the Seller could have done if it had continued to own such Collateral.  The Seller, the Borrower and the Administrative Agent, on behalf of the Secured Parties shall furnish the Collateral Administrator with any powers of attorney and other documents necessary or appropriate to enable the Collateral Administrator to carry out its management and administrative duties hereunder, and shall cooperate with the Collateral Administrator to the fullest extent in order to ensure the collectability of the Collateral.  In no event shall the Collateral Administrator be entitled to make any Secured Party or the Collateral

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Custodian a party to any litigation without such party’s express prior written consent, or to make the Borrower a party to any litigation (other than any foreclosure or similar collection procedure) without the Administrative Agent’s consent.

(b)           After the declaration of the Termination Date, at the direction of the Administrative Agent, the Collateral Administrator shall take such action as the Administrative Agent may deem necessary or advisable to enforce collection of the Collateral; provided that the Administrative Agent may, in accordance with Section 5.1(l), notify any Obligor with respect to any Collateral of the assignment of such Collateral to the Administrative Agent, on behalf of the Secured Parties, and direct that payments of all amounts due or to become due be made directly to the Administrative Agent or any collection agent, sub-agent or account designated by the Administrative Agent and, upon such notification and at the expense of the Borrower, the Administrative Agent may enforce collection of any such Collateral, and adjust, settle or compromise the amount or payment thereof.

Section 6.4.           Collection of Payments; Accounts.

(a)           Collection Efforts, Modification of Collateral.  The Collateral Administrator will use commercially reasonable best efforts to collect or cause to be collected, all payments called for under the terms and provisions of the Loans included in the Collateral as and when the same become due in accordance with the Credit and Collection Policy.  The Collateral Administrator may not waive, modify or otherwise vary any provision of an item of Collateral in any manner contrary in any material respect to the Credit and Collection Policy.

(b)           Taxes and other Amounts.  The Collateral Administrator will use its reasonable best efforts to collect all payments with respect to amounts due for Taxes, assessments and insurance premiums relating to each Loan to the extent required to be paid to the Borrower for such application under the Underlying Instrument and remit such amounts in accordance with Section 2.7 and Section 2.8 to the appropriate Governmental Authority or insurer as required by the Underlying Instruments.

(c)           Payments to Collection Account.  On or before the applicable Funding Date, the Collateral Administrator shall have instructed all Obligors to make all payments owing to the Borrower in respect of the Collateral directly to the applicable Collection Account; provided that the Collateral Administrator is not required to so instruct any Obligor which is solely a guarantor unless and until the Collateral Administrator calls on the related guaranty.

(d)           Accounts.  Each of the parties hereto hereby agrees that each Account shall be deemed to be a Securities Account.  Each of the parties hereto hereby agrees to cause the Collateral Custodian or any other Securities Intermediary that holds any Cash or other Financial Asset for the Borrower in an Account to agree with the parties hereto that (A) the cash and other property (subject to Section 6.4(e) below with respect to any property other than investment property, as defined in Section 9-102(a)(49) of the UCC) is to be treated as a Financial Asset and (B) the jurisdiction governing the Account, all Cash and other Financial Assets credited to the Account and the “securities intermediary’s jurisdiction” (within the meaning of Section 8-110(e) of the UCC) shall, in each case, be the State of New York.  In no event may any Financial Asset held in any Account be registered in the name of, payable to the order of, or specially Indorsed

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