Exhibit 10.3


 


ADMINISTRATION AGREEMENT


 


BETWEEN


 


PORTMAN RIDGE FINANCE CORPORATION


 


AND


 


BC PARTNERS MANAGEMENT LLC


 


This Agreement (“Agreement”)
is made as of the day of April 1, 2019 by and between Portman Ridge Finance Corporation, a Delaware corporation (the “Company”),
and BC Partners Management LLC, a Delaware limited liability company (the “Administrator”).


 


WHEREAS, the Company is a non-diversified,
closed-end management investment fund that is regulated as a business development company (“BDC”) 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 retains 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 (the “Board”), for the period and on the terms and conditions
set forth in this Agreement. The Administrator hereby accepts such retention 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 shall for all purposes herein be deemed to be an independent contractor 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 an agent 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 recordkeeping services and such other services as the Administrator, subject to
review by the Board, 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 Board of its performance of its 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, in its capacity as Administrator pursuant
to this Agreement, provide any advice or recommendation relating to the 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 under the Investment Company Act or otherwise and shall prepare, print
and disseminate reports to stockholders, and reports and other materials filed with the Securities and Exchange Commission (the
 “SEC”). The Administrator will provide on the Company’s behalf significant managerial assistance to those
portfolio companies that request such assistance. In addition, the Administrator will assist the Company in determining and publishing
(as necessary or appropriate) the Company’s net asset value and net asset value per share, overseeing the preparation and
filing of the Company’s tax returns, and generally overseeing the payment of the Company’s expenses and the performance
of administrative and professional services rendered to the Company by others. For the avoidance of any doubt, the parties agree
that the Administrator is authorized to enter into sub-administration agreements as the Administrator determines necessary in order
to carry out the services set forth in this paragraph, subject to the prior approval of the Company.


 


		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
will maintain and keep such books, accounts and records in accordance with the Investment Company Act. In compliance with the requirements
of Rule 31a-3 under the Investment Company Act, the Administrator agrees that all records which 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
which it maintains for the Company pursuant to Rule 31a-1 under the Investment Company Act will 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.


 




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		3.	Confidentiality



 


The parties hereto agree that each shall
treat 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 (regulated pursuant to Regulation S-P), 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 be applicable to any information that is publicly available when provided or 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 (including rent, office equipment and utilities) for the Company’s
use hereunder, it being understood and agreed that, except as otherwise provided herein or in that certain Investment Advisory
Agreement, by and between the Company and Sierra Crest Investment Management LLC (the “Adviser”), as amended
from time to time (the “Advisory Agreement”), the Administrator shall be solely responsible for the compensation
of its employees and all overhead expenses of the Administrator (including rent, office equipment and utilities) that do not relate
to the services provided to the Company hereunder. For the avoidance of doubt, the parties agree that the Company will bear all
expenses associated with contractual obligations of the Company existing prior to the effective date of this Agreement, including
those that may become unnecessary or redundant but cannot be terminated.


 


The Company will bear all expenses of its
operations and transactions, including (without limitation except as noted) those relating to: the cost of its organization and
any offerings; the cost of calculating its net asset value, including the cost of any third-party valuation services; the cost
of effecting any sales and repurchases of the Common Stock and other securities; fees and expenses payable under any dealer manager
or placement agent agreements, if any; debt service and other costs of borrowings or other financing arrangements; costs of hedging;
expenses, including travel expense, incurred by the Adviser, or members of the Investment Team, or payable to third parties, performing
due diligence on prospective portfolio companies and, if necessary, enforcing the Company’s rights; transfer agent and custodial
fees; fees and expenses associated with marketing efforts; federal and state registration fees, any stock exchange listing fees
and fees payable to rating agencies; federal, state and local taxes; independent directors’ fees and expenses including certain
travel expenses; costs of preparing financial statements and maintaining books and records and filing reports or other documents
with the SEC (or other regulatory bodies) and other reporting and compliance costs, including registration and listing fees, and
the compensation of professionals responsible for the preparation of the foregoing; the costs of any reports, proxy statements
or other notices to stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and
the compensation of personnel responsible for the preparation of the foregoing and related matters; commissions and other compensation
payable to brokers or dealers; research and market data; fidelity bond, directors and officers errors and omissions liability insurance
and other insurance premiums; direct costs and expenses of administration, including printing, mailing, long distance telephone
and staff; fees and expenses associated with independent audits, outside legal and consulting costs; costs of winding up; costs
incurred in connection with the formation or maintenance of entities or vehicles to hold the Company’s assets for tax or
other purposes; extraordinary expenses (such as litigation or indemnification); and costs associated with reporting and compliance
obligations under the Investment Company Act and applicable federal and state securities laws. Notwithstanding anything to the
contrary contained herein, the Company shall reimburse the Administrator (or its affiliates) for an allocable portion of the compensation
paid by the Administrator (or its affiliates) to the Company’s Chief Compliance Officer and Chief Financial Officer and their
respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to the business affairs of the
Company).


 




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		5.	Limitation of Liability of the Administrator; Indemnification



 


The Administrator (and its members, managers,
officers, employees, agents, controlling persons and any other person or entity affiliated with it) shall not be liable to the
Company for any action taken or omitted to be taken by the Administrator 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 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
Section 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 or gross
negligence 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 is 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.


 




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		7.	Duration and Termination of this Agreement



 


(a)          This
Agreement shall become effective as of the first date above written. The provisions of Section 5 of this Agreement shall remain
in full force and effect, and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination
of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Administrator shall
be entitled to any amounts owed under Section 4 through the date of termination or expiration and Section 5 shall continue in force
and effect and apply to the Administrator and its representatives as and to the extent applicable. This Agreement shall continue
in effect for two years from the date hereof, and thereafter shall continue automatically for successive annual periods, provided
that such continuance is specifically approved at least annually by:


 


(i)          the
vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company; and


 


(ii)         the
vote of a majority of the Company’s directors who are not parties to this Agreement or “interested persons” (as
such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements
of the Investment Company Act.


 


(b)          The
Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’ written notice, by the vote
of a majority of the outstanding voting securities of the Company, or by the vote of the Board or by the Administrator.


 


(c)          This
Agreement may not be assigned by a party without the consent of the other party; provided, however, that the rights
and obligations of the Company under this Agreement shall not be deemed to be assigned to a newly-formed entity in the event of
the merger of the Company into, or conveyance of all of the assets of the Company to, such newly-formed entity; provided,
further, however, that the sole purpose of that merger or conveyance is to effect a mere change in the Company’s
legal form into another limited liability entity. The provisions of Section 5 of this Agreement shall remain in full force
and effect, and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.


 


		8.	Amendments of 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 the laws of the State of New York and the applicable provisions of the Investment Company Act. To the extent the applicable
laws of the State of New York, or any of the provisions herein, conflict with the 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.


 


 




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		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.


 




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IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the date first above written.


 


	 	PORTMAN RIDGE FINANCE CORPORATION
	 	 	 
	 	By:	/s/ Edward Goldthorpe
	 	Name:	Edward Goldthorpe
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	BC PARTNERS MANAGEMENT LLC
	 	 	 
	 	By:	/s/ Justin Bateman
	 	Name:	Justin Bateman
	 	Title:	Manager


 


Signature Page to Administration Agreement