Exhibit 10.3

ADMINISTRATION AGREEMENT

AGREEMENT (this “Agreement”) made as of this 4th day of December, 2012, by and
between WhiteHorse Finance, Inc., a Delaware corporation (the “Company”), and
H.I.G. WhiteHorse Administration, LLC, a Delaware limited liability company (the
“Administrator”).

W I T N E S S E T H:

WHEREAS, the Company is a closed-end non-diversified management investment
company that has filed a notice with the Securities and Exchange Commission that
has elected to be treated as a business development company under the Investment
Company Act of 1940, as amended (the “Investment Company Act”);

WHEREAS, the Company desires to retain the Administrator to provide
administrative services to the Company in the manner and on the terms
hereinafter set forth; and

WHEREAS, the Administrator is willing to provide administrative services to the
Company on the terms and conditions hereafter set forth.

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and the Administrator
hereby agree as follows:

 

1. Duties of the Administrator

(a) Employment of Administrator. The Company hereby employs the Administrator to
act as administrator of the Company, and to furnish, or arrange for others to
furnish, the administrative services, personnel and facilities described below,
subject to review by and the overall control of the Board of Directors of the
Company, for the period and on the terms and conditions set forth in this
Agreement. The Administrator hereby accepts such employment and agrees during
such period to render, or arrange for the rendering of, such services and to
assume the obligations herein set forth, subject to the reimbursement of costs
and expenses provided for below. The Administrator and such others shall for all
purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized herein, have no authority to act for
or represent the Company in any way or otherwise be deemed agents of the
Company.

(b) Services. The Administrator shall perform (or oversee, or arrange for, the
performance of) the administrative services necessary for the operation of the
Company. Without limiting the generality of the foregoing, the Administrator
shall provide the Company with office facilities, equipment, clerical,
bookkeeping and record keeping services at such facilities and such other
services as the Administrator, subject to review by the Board of Directors of
the Company, shall from time to time determine to be necessary or useful to
perform its obligations under this Agreement. The Administrator shall also, on
behalf of the Company, conduct relations with custodians, depositories, transfer
agents, dividend disbursing agents, other stockholder servicing agents,
accountants, attorneys, underwriters, brokers and dealers, corporate
fiduciaries, insurers, banks and such other persons in any such other capacity
deemed to be necessary or desirable. The Administrator shall make reports to the
directors of the Company (the “Directors”)

--------------------------------------------------------------------------------

of its performance of obligations hereunder and furnish advice and
recommendations with respect to such other aspects of the business and affairs
of the Company as it shall determine to be desirable; provided that nothing
herein shall be construed to require the Administrator to, and the Administrator
shall not, provide any advice or recommendation relating to securities and other
assets that the Company should purchase, retain or sell or any other investment
advisory services to the Company. The Administrator shall be responsible for the
financial and other records that the Company is required to maintain and shall
prepare reports to stockholders, and reports and other materials filed with the
Securities and Exchange Commission (the “SEC”). The Administrator shall provide
on the Company’s behalf significant managerial assistance to those portfolio
companies to which the Company is required to provide such assistance. In
addition, the Administrator shall assist the Company in determining and
publishing the Company’s net asset value, oversee the preparation and filing of
the Company’s tax returns, and the printing and dissemination of reports to
stockholders of the Company and generally oversee the payment of the Company’s
expenses and the performance of administrative and professional services
rendered to the Company by others.

 

2. Records

The Administrator agrees to maintain and keep all books, accounts and other
records of the Company that relate to activities performed by the Administrator
hereunder and, if required by the Investment Company Act, shall maintain and
keep such books, accounts and records in accordance with such Act. In compliance
with the requirements of Rule 31a-3 under the Investment Company Act, the
Administrator agrees that all records that it maintains for the Company shall at
all times remain the property of the Company, shall be readily accessible during
normal business hours and shall be promptly surrendered upon the termination of
the Agreement or otherwise on written request. The Administrator further agrees
that all records that it maintains for the Company pursuant to Rule 31a-1 under
the Investment Company Act shall be preserved for the periods prescribed by Rule
31a-2 under the Investment Company Act unless any such records are earlier
surrendered as provided above. Records shall be surrendered in usable
machine-readable form. The Administrator shall have the right to retain copies
of such records, subject to observance of its confidentiality obligations under
this Agreement.

 

3. Confidentiality

Each of the parties hereto agrees that it shall treat confidentially the terms
and conditions of this Agreement and all information provided by each party to
the other regarding its business and operations. All confidential information
provided by a party hereto, including nonpublic personal information pursuant to
Regulation S-P of the SEC, shall be used by any other party hereto solely for
the purpose of rendering services pursuant to this Agreement and, except as may
be required in carrying out this Agreement, shall not be disclosed to any third
party, without the prior consent of such providing party. The foregoing shall
not apply to any information that is publicly available when provided or which
thereafter becomes publicly available other than through a breach of this
Agreement, or that is required to be disclosed by any regulatory authority, any
authority or legal counsel of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.

--------------------------------------------------------------------------------

4. Compensation; Allocation of Costs and Expenses

In full consideration of the provision of the services of the Administrator, the
Company shall reimburse the Administrator for the costs and expenses incurred by
the Administrator in performing its obligations and providing personnel and
facilities hereunder. If requested to perform significant managerial assistance
to portfolio companies of the Company, the Administrator shall be paid an
additional amount based on the services provided, which amount shall not exceed
the amount the Company receives from the portfolio companies for providing this
assistance.

The Company shall bear all costs and expenses that are incurred in its operation
and transactions and not specifically assumed by the Company’s investment
adviser (the “Adviser”), pursuant to that certain Investment Advisory Agreement,
dated as of December 4, 2012, by and between the Company and the Adviser. Costs
and expenses to be borne by the Company shall include, but are not limited to,
those relating to: (a) organization; (b) calculating the Company’s net asset
value and net asset value per share (including the cost and expenses of any
independent valuation firm); (c) fees and expenses, including travel expenses,
incurred by the Adviser or payable to third parties in performing due diligence
on prospective portfolio companies, monitoring the Company’s investments and, if
necessary, enforcing the Company’s rights; (d) interest payable on debt, if any,
incurred to finance the Company’s investments; (e) costs of offerings of the
Company’s common stock and other securities; (f) the base management fee and any
incentive fee; (g) distributions on the Company’s common stock;
(h) administration fees payable to the Administrator under this Agreement;
(i) transfer agent and custody fees and expenses; (j) the allocated costs
incurred by the Administrator in providing managerial assistance to those
portfolio companies that request it; (k) amounts payable to third parties
relating to, or associated with, evaluating, making and disposing of
investments; (l) brokerage fees and commissions; (m) registration fees;
(n) listing fees; (o) taxes; (p) independent director fees and expenses;
(1) costs associated with the Company’s reporting and compliance obligations
under the Investment Company Act and applicable U.S. federal and state
securities laws; (r) the costs of any reports, proxy statements or other notices
to the Company’s stockholders, including printing costs; (s) costs of holding
stockholder meetings; (t) the Company’s fidelity bond; (u) directors and
officers/errors and omissions liability insurance, and any other insurance
premiums; (v) litigation, indemnification and other non-recurring or
extraordinary expenses; (w) direct costs and expenses of administration and
operation, including audit and legal costs; (x) fees and expenses associated
with marketing efforts, including deal sourcing and payments to financial
sponsors; (y) dues, fees and charges of any trade association of which the
Company is a member; and (z) all other expenses reasonably incurred by the
Company or the Administrator in connection with administering the Company’s
business, such as the allocable portion of overhead under this Agreement,
including rent and the Company’s allocable portion of the costs and expenses of
its chief compliance officer, chief financial officer, chief operating officer
and their respective staffs. To the extent the Administrator outsources any of
its functions, the Company shall pay the fees associated with such functions on
a direct basis without profit to the Administrator.

--------------------------------------------------------------------------------

5. Limitation of Liability of the Administrator; Indemnification

The Administrator (and its officers, managers, partners, agents, employees,
controlling persons, members, and any other person or entity affiliated with the
Administrator, including without limitation its members) shall not be liable to
the Company or its stockholders for any action by the Administrator (and its
officers, managers, partners, agents, employees, controlling persons, members,
and any other person or entity affiliated with the Administrator, including
without limitation its members) in connection with the performance of any of its
duties or obligations under this Agreement or otherwise as administrator for the
Company, and the Company shall indemnify, defend and protect the Administrator
(and its officers, managers, partners, agents, employees, controlling persons,
members and any other person or entity affiliated with the Administrator,
including without limitation the Adviser, each of whom shall be deemed a third
party beneficiary hereof) (collectively, the “Indemnified Parties”) and hold
them harmless from and against all damages, liabilities, costs and expenses
(including reasonable attorneys’ fees and amounts reasonably paid in settlement)
incurred by the Indemnified Parties in or by reason of any pending, threatened
or completed action, suit, investigation or other proceeding (including an
action or suit by or in the right of the Company or its security holders)
arising out of or otherwise based upon the performance of any of the
Administrator’s duties or obligations under this Agreement or otherwise as
administrator for the Company. Notwithstanding the preceding sentence of this
Paragraph 5 to the contrary, nothing contained herein shall protect or be deemed
to protect the Indemnified Parties against or entitle or be deemed to entitle
the Indemnified Parties to indemnification in respect of, any liability to the
Company or its security holders to which the Indemnified Parties would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations in the performance of the Administrator’s
duties or by reason of the reckless disregard of the Administrator’s duties and
obligations under this Agreement (to the extent applicable, as the same shall be
determined in accordance with the Investment Company Act and any interpretations
or guidance by the SEC or its staff thereunder).

 

6. Activities of the Administrator

The services of the Administrator to the Company are not to be deemed to be
exclusive, and the Administrator and each affiliate are free to render services
to others. It is understood that directors, officers, employees and stockholders
of the Company are or may become interested in the Administrator and its
affiliates, as directors, officers, members, managers, employees, partners,
stockholders or otherwise, and that the Administrator and directors, officers,
members, managers, employees, partners and stockholders of the Administrator and
its affiliates are or may become similarly interested in the Company as
stockholders or otherwise.

 

7. Duration and Termination of this Agreement

This Agreement shall become effective as of the date upon which the SEC declares
the registration statement on Form N-2 to be effective, and shall remain in
force with respect to the Company for two years thereafter, and thereafter
continue from year to year, but only so long as such continuance is specifically
approved at least annually by (i) the Board of Directors of the Company and
(ii) a majority of those Directors who are not “interested persons” (as defined
in the Investment Company Act) party to this Agreement.

--------------------------------------------------------------------------------

This Agreement may be terminated at any time, without the payment of any
penalty, by the Company, or by the Administrator, upon 60 days’ written notice
to the other party. This Agreement may not be assigned by a party without the
consent of the other party.

 

8. Amendments to this Agreement

This Agreement may be amended pursuant to a written instrument by mutual consent
of the parties.

 

9. Governing Law

This Agreement shall be construed in accordance with laws of the State of New
York and the applicable provisions of the Investment Company Act, if any. To the
extent that the applicable laws of the State of New York, or any of the
provisions herein, conflict with applicable provisions of the Investment Company
Act, the latter shall control.

 

10. Entire Agreement

This Agreement contains the entire agreement of the parties and supersedes all
prior agreements, understandings and arrangements with respect to the subject
matter hereof.

 

11. Notices

Any notice under this Agreement shall be given in writing, addressed and
delivered or mailed, postage prepaid, to the other party at its principal
office.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date above written.

 

WHITEHORSE FINANCE, INC. By:  

/s/ Jay Carvell

  Name:   Jay Carvell   Title:   Chief Executive Officer H.I.G. WHITEHORSE
ADMINISTRATION, LLC By:  

/s/ Richard Siegel

  Name:   Richard Siegel   Title:   Authorized Signatory

[Signature Page to Administration Agreement]