I have the same issue like this before. json_encode in PHP and JSON.parse() in JS helped me resolve this. In your case, I would use this code:

<td onclick="openFile('<?php echo htmlentities ($row['name'])?>','
                  <?php echo json_encode($row['content'])?>')">
<a href="#nf" data-toggle="tab"><?php echo $row['name']?></a></td>

Then on your openFile() function, that is where Im gonna parse content parameter using JSON.parse() like this:

function openFile(name, content){
     content = JSON.parse(content);

     ....
     // your codes here

}

There is no way to escape newline in PHP.

As mentioned in PHP documentation on strings after listing all escaped characters:

As in single quoted strings, escaping any other character will result in the backslash being printed too.

So you can do it by breaking your string in each line and concatenating them by dot like this:

$str = "Hi " .
"there" .
"!";