Document:

Execution Version 

Exhibit 10.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COLLATERAL MANAGEMENT AGREEMENT

 

dated as of September 29, 2016

 

by and between

 

GARRISON FUNDING 2016-2 LTD.

as Issuer

 

and

 

GARRISON CAPITAL INC.

as Collateral Manager

 

 

 

 

 

 

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	 	Page
	Section 1.   Definitions; Rules of Construction.	1
	Section 2.   General Duties and Authority of the Collateral Manager.	4
	Section 3.   Purchase and Sale Transactions; Brokerage.	10
	Section 4.   Additional Activities of the Collateral Manager.	11
	Section 5.   Certain Conflicts of Interest.	14
	Section 6.   Records; Confidentiality.	16
	Section 7.   Obligations of Collateral Manager.	17
	Section 8.   Compensation.	18
	Section 9.   Benefit of the Agreement.	20
	Section 10.   Limits of Collateral Manager Responsibility.	20
	Section 11.   No Joint Venture.	24
	Section 12.   Term; Termination.	24
	Section 13.   Assignments.	26
	Section 14.   Removal for Cause.	27
	Section 15.   Obligations of Resigning or Removed Collateral Manager.	30
	Section 16.   Representations and Warranties.	31
	Section 17.   Limited Recourse; No Petition.	35
	Section 18.   Notices.	35
	Section 19.   Binding Nature of Agreement; Successors and Assigns.	36
	Section 20.   Entire Agreement; Amendment.	37
	Section 21.   Governing Law.	37
	Section 22.   Submission to Jurisdiction.	37
	Section 23.   Waiver of Jury Trial.	38
	Section 24.   Conflict with the Indenture.	38
	Section 25.   Subordination; Assignment of Agreement.	38
	Section 26.   Indulgences Not Waivers.	38
	Section 27.   Costs and Expenses.	38
	Section 28.   Third Party Beneficiary.	39
	Section 29.   Titles Not to Affect Interpretation.	39

 

 

    	- i -

     

    

TABLE OF CONTENTS

(continued)

 

	 	Page
	Section 30.   Execution in Counterparts.	39
	Section 31.   Provisions Separable.	39
	Section 32.   Gender.	40
	Section 33.   Communications with Rating Agencies.	40

 

Schedule IInvestment
Procedures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	- ii -

     

    

 

COLLATERAL MANAGEMENT AGREEMENT

 

This Collateral Management Agreement (as amended,
supplemented or otherwise modified from time to time, this “Agreement”), dated as of September 29, 2016, is
entered into by and between Garrison Funding 2016-2 Ltd., an exempted company incorporated with limited liability under the laws
of the Cayman Islands (together with successors and assigns permitted hereunder, the “Issuer”), and Garrison
Capital Inc., a Delaware corporation (together with its successors and permitted assigns, the “Collateral Manager”).

 

WITNESSETH:

 

WHEREAS, the Notes (as defined in the Indenture)
will be issued pursuant to an Indenture dated as of the date hereof (the “Indenture”), among the Issuer, Garrison
Funding 2016-2 LLC, a limited liability company formed under the laws of the State of Delaware, as co-issuer (the “Co-Issuer”),
and Deutsche Bank Trust Company Americas, as trustee (together with any successor trustee permitted under the Indenture, the “Trustee”);

 

WHEREAS, the Issuer intends to pledge all Collateral
Obligations and the other Assets, as set forth in the Indenture, to the Trustee as security for the Secured Parties under the Indenture;

 

WHEREAS, the Issuer desires to appoint Garrison
Capital Inc. as the Collateral Manager to provide the services described herein and Garrison Capital Inc. desires to accept such
appointment;

 

WHEREAS, the Indenture authorizes the Issuer
to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain investment
management duties with respect to the acquisition, administration and disposition of Assets in the manner and on the terms set
forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Indenture as the
Issuer may from time to time reasonably request; and

 

WHEREAS, the Collateral Manager has the capacity
to provide the services required hereby and is prepared to perform such services upon the terms and subject to the conditions set
forth herein;

 

NOW, THEREFORE, in consideration of the agreements
herein set forth, the parties hereto agree as follows:

 

Section 1.               
Definitions; Rules of Construction.

 

(a)               
As used in this Agreement:

 

“Advisers Act” shall mean
the Investment Advisers Act of 1940, as amended.

 

     

     

    

“Agreement” shall have the
meaning set forth in the preamble.

 

“Cause” shall have the meaning
set forth in Section 14(a).

 

“Client” means, with respect
to any specified Person, any Person to whom, or account for which, the specified Person provides investment management services
or investment advice.

 

“Co-Issuer” shall have the
meaning set forth in the recitals hereto.

 

“Collateral Management Fee”
shall have the meaning set forth in Section 8(a).

 

“Collateral Manager” shall
have the meaning set forth in the preamble.

 

“Collateral Manager Breaches”
shall have the meaning set forth in Section 10(a).

 

“Collateral Manager Indemnified Party”
shall have the meaning set forth in Section 10(b).

 

“Collateral Manager Indemnifying Party”
shall have the meaning set forth in Section 10(b).

 

“Collateral Manager Information”
shall have the meaning set forth in Section 16(b)(v).

 

“Collateral Manager Notes”
shall mean any Notes owned by the Collateral Manager, an Affiliate thereof, or any account, fund, client or portfolio established
and controlled by the Collateral Manager or an Affiliate thereof or for which the Collateral Manager or an Affiliate thereof acts
as the investment adviser or with respect to which the Collateral Manager or an Affiliate thereof exercises discretionary authority.

 

“Cumulative Deferred Collateral Management
Fee” shall have the meaning set forth in Section 8(d).

 

“Cumulative Deferred Senior Collateral
Management Fee” shall have the meaning set forth in Section 8(d).

 

“Cumulative Deferred Subordinated Collateral
Management Fee” shall have the meaning set forth in Section 8(d).

 

“Current Deferred Collateral Management
Fee” shall have the meaning set forth in Section 8(d).

 

“Current Deferred Senior Collateral
Management Fee” shall have the meaning set forth in Section 8(d).

 

“Current Deferred Subordinated Collateral
Management Fee” shall have the meaning set forth in Section 8(d).

 

    	 	2	 

     

    

“Expenses” shall have the
meaning set forth in Section 10(b).

 

“Fee Basis Amount” means,
for any Payment Date, the sum, without duplication, of (i) the Daily Average Collateral Obligation Commitment Amount for such Payment
Date, (ii) the daily average balance of the amounts on deposit in all Accounts (including Eligible Investments therein) representing
Principal Proceeds for the Collection Period related to such Payment Date and (iii) the aggregate amount of all Principal Financed
Accrued Interest.

 

“Final Offering Circular”
shall mean the Offering Circular, dated as of September 26, 2016, with respect to the Secured Notes, as amended or supplemented.

 

“Force Majeure Event” shall
have the meaning set forth in Section 10(j).

 

“Garrison Entities” shall
have the meaning set forth in Section 14(a)(iii).

 

“Indemnified Party” shall
have the meaning set forth in Section 10(b).

 

“Indemnifying Party” shall
have the meaning set forth in Section 10(b).

 

“Indenture” shall have the
meaning set forth in the recitals hereto.

 

“Instrument of Acceptance”
shall have the meaning set forth in Section 12(c).

 

“Investment Committee” shall
have the meaning set forth is Schedule I.

 

“Investment Company Act”
shall mean the Investment Company Act of 1940, as amended.

 

“Investment Procedures” shall
have the meaning set forth in Schedule I.

 

“Issuer” shall have the meaning
set forth in the preamble.

 

“Issuer Indemnified Party”
shall have the meaning set forth in Section 10(b).

 

“Issuer Indemnifying Party”
shall have the meaning set forth in Section 10(b).

 

“Losses” shall have the meaning
set forth in Section 10(b).

 

“Material Adverse Effect”
means, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition (other than
the performance of the Assets) or operations of the Issuer, taken as a whole, (b) the validity or enforceability of the Indenture,
this Agreement or the Issuer’s Organizational Instruments or (c) the existence, perfection, priority or enforceability of
the Trustee’s lien on the Assets.

 

“Organizational Instruments”
shall mean the partnership agreement, in the case of a partnership, or the certificate of formation and limited liability company
agreement (or the comparable documents for the applicable jurisdiction), in the case of a limited liability company, or the certificate
of incorporation and memorandum and articles of association (or the comparable documents for the applicable jurisdiction), in the
case of a corporation.

 

    	 	3	 

     

    

“Principal Transaction” shall
have the meaning set forth in Section 5(a).

 

“Proceedings” shall have
the meaning set forth in Section 22.

 

“Related Person” means, with
respect to any Person, the direct or indirect owners of the equity interests therein, directors, officers, members, partners, employees,
managers, agents and professional advisors thereof, including, with respect to the Collateral Manager, any investment adviser in
which the Collateral Manager or any of its Affiliates has an economic or ownership interest.

 

“Section 28(e)” shall have
the meaning set forth in Section 3(b).

 

“Standard of Care” shall
have the meaning set forth in Section 2(b).

 

“Statement of Cause” shall
have the meaning set forth in Section 14(a).

 

“Sub-Adviser” shall have
the meaning set forth in Section 6.

 

“Sub-Collateral Management Agreement”
shall have the meaning set forth in Section 6.

 

“Termination Notice” shall
have the meaning set forth in Section 14(a).

 

“Transaction” shall mean
any action taken by the Collateral Manager on behalf of the Issuer with respect to the Assets, including, without limitation, (i)
selecting the Collateral Obligations and Eligible Investments to be acquired by the Issuer, (ii) investing and reinvesting the
Assets, (iii) amending, waiving and/or taking any other action commensurate with managing the Assets, (iv) instructing the Trustee
with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security or
Eligible Investment by the Issuer and (v) any of the services set forth in Section 2.

 

“Trustee” shall have the
meaning set forth in the recitals hereto.

 

(b)       Capitalized
terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Indenture and the rules
of construction set forth in Section 1.2 of the Indenture are hereby incorporated by reference herein.

 

Section 2.               
General Duties and Authority of the Collateral Manager.

 

(a)               
Subject to Sections 2(b), 2(d), 5 and 10 and to the applicable provisions of the Indenture,
the Collateral Manager agrees, and is hereby authorized, to provide the following services to the Issuer:

 

    	 	4	 

     

    

(i)                
select the Collateral Obligations and Eligible Investments to be acquired and select the Collateral Obligations, Equity
Securities and Eligible Investments to be sold or otherwise disposed of by the Issuer;

 

(ii)              
invest and reinvest the Assets in accordance with the Indenture, the Issuer’s Organizational Instruments, investment
guidelines and applicable law;

 

(iii)            
instruct the Trustee with respect to any acquisition, disposition, or tender of, or Offer with respect to, a Collateral
Obligation, Equity Security, Eligible Investment or other assets received in respect thereof in the open market or otherwise by
the Issuer; and

 

(iv)            
perform all other tasks and take all other actions that are specified in the Indenture, the Collateral Administration Agreement
or this Agreement.

 

Notwithstanding anything in this Agreement or
the Transaction Documents to the contrary, in each instance in which notice or any other information must be made available to
S&P for purposes of satisfying the Rating Agency Condition, or as otherwise required under any Transaction Document, such notice
or information may only be made available by the Collateral Manager, unless otherwise agreed to in writing by the Collateral Manager.

 

The Collateral Manager shall, and is hereby
authorized to, perform its obligations hereunder and under the Indenture in a manner which is consistent with the terms hereof
and of the Indenture.

 

Notwithstanding anything to the contrary in
this Section 2(a), none of the services performed by the Collateral Manager shall result in or be construed as resulting
in an obligation to perform any of the following: (i) the Collateral Manager acting repeatedly or continuously as an intermediary
in securities for the Issuer; (ii) the Collateral Manager providing investment banking services to the Issuer; or (iii) the Collateral
Manager having direct contact with, or actively soliciting or finding outside investors to invest in the Issuer.

 

(b)              
The Collateral Manager shall have the power to execute and deliver all necessary and appropriate documents and instruments
on behalf of the Issuer in connection with performing its obligations set forth herein. Except as may otherwise be expressly provided
in this Agreement or the Indenture, the Collateral Manager shall in rendering its services as Collateral Manager use a degree of
skill and attention no less than that which (i) would be exercised by a prudent institutional portfolio manager in connection with
the servicing and administration of similar assets under similar circumstances and (ii) each of the Collateral Manager and its
Affiliates exercises with respect to comparable assets that it manages for itself and for others having similar investment objectives
and restrictions in accordance with its existing practices and procedures relating to assets of the nature and character of the
Assets, except as expressly provided otherwise in this Agreement or the Indenture (such standard of care, the “Standard
of Care”); provided that the Collateral Manager shall not be liable for any loss or damages resulting from its
failure to satisfy the foregoing standard of care except to the extent such failure would result in liability pursuant to Section 10(a)
hereof. Subject to the immediately preceding sentence, the Collateral Manager shall follow its customary policies, standards and
procedures in performing its duties hereunder.

 

    	 	5	 

     

    

The Collateral Manager agrees to implement the
Investment Procedures for the review and approval process for the establishment of portfolio management parameters and the acquisition
of Assets as described in Schedule I.

 

(c)               
Subject to the provisions concerning its general duties and obligations as set forth in paragraphs (a) and (b) above and
the terms of the Indenture, the Collateral Manager shall provide, and is hereby authorized to provide, the following services to
the Issuer:

 

(i)                
The Collateral Manager shall perform the investment-related duties and functions (including, without limitation, the furnishing
of Issuer Orders and Authorized Officer’s certificates) as are expressly required hereunder or under the Indenture with regard
to acquisitions, sales or other dispositions of Collateral Obligations, Equity Securities, Eligible Investments and other securities
and assets permitted to be acquired or sold under, and subject to, the Indenture (including any proceeds received by way of Offers,
workouts and restructurings on assets owned by the Issuer) and shall comply with the Eligibility Criteria and other requirements
in the Indenture.

 

The Collateral Manager shall have no obligation
to perform any other duties other than as expressly specified herein or in the Indenture or in any other Transaction Document.

 

The Issuer hereby irrevocably (except as provided
below) appoints the Collateral Manager as its true and lawful agent and attorney-in-fact (with full power of substitution) in its
name, place and stead and at its expense, in connection with the performance of its duties provided for in this Agreement, in the
Indenture and in any other Transaction Document, including, without limitation, the following powers: (A) to give or cause to be
given any necessary receipts or acquittance for amounts collected or received in the performance of its obligations under the Indenture
and hereunder, (B) to make or cause to be made all necessary transfers of the Collateral Obligations, Equity Securities and Eligible
Investments in connection with any acquisition, sale or other disposition made pursuant hereto and the Indenture, (C) to execute
(under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer all necessary or
appropriate bills of sale, assignments, agreements and other instruments in connection with any such acquisition, sale or other
disposition and (D) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf
of the Issuer any consents, votes, proxies, waivers, notices, amendments, modifications, agreements, instruments, orders or other
documents in connection with or pursuant to this Agreement or the Indenture or any other Transaction Document and relating to any
Collateral Obligation, Equity Security or Eligible Investment.

 

The Issuer hereby ratifies and confirms all
that such attorney-in-fact (or any substitute) shall lawfully do hereunder and pursuant hereto and authorizes such attorney-in-fact
to exercise full discretion and act for the Issuer in the same manner and with the same force and effect as the officers of the
Issuer might or could do in respect of the actions taken by such attorney-in-fact (or any substitute), as well as in respect of
all other things the Collateral Manager deems necessary or incidental to the furtherance or conduct of the Collateral Manager’s
services under this Agreement or under the Indenture or under any other Transaction Document, subject in each case to the applicable
terms of this Agreement, the Indenture and each other Transaction Document.

 

    	 	6	 

     

    

The Issuer hereby authorizes such attorney-in-fact,
in its sole discretion (but subject to applicable law and the provisions of this Agreement and the Indenture), to take all actions
that it considers reasonably necessary and appropriate in respect of the Assets, this Agreement and the other Transaction Documents.
Nevertheless, if so requested by the Collateral Manager or by a purchaser of any Collateral Obligation, Equity Security or Eligible
Investment, the Issuer shall ratify and confirm any such sale or other disposition by executing and delivering to the Collateral
Manager or such purchaser all proper bills of sale, assignments, releases, powers of attorney, proxies, dividends, other orders
and other instruments as may reasonably be designated in any such request.

 

Except as otherwise set forth and provided for
herein, this grant of power of attorney is coupled with an interest, and it shall survive and not be affected by the subsequent
winding-up or bankruptcy of the Issuer.

 

Notwithstanding anything herein to the contrary,
the appointment herein of the Collateral Manager as the Issuer’s agent and attorney-in-fact shall automatically cease and
terminate upon the effective date of any termination of this Agreement, the resignation of the Collateral Manager pursuant to Section
12 or any removal of the Collateral Manager pursuant to Section 14.

 

Each of the Collateral Manager and the Issuer
shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the
other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and
regulations and the terms of this Agreement, the Indenture and each other Transaction Document.

 

(ii)              
The Collateral Manager shall negotiate on behalf of the Issuer with prospective originators, sellers or purchasers of Collateral
Obligations or Eligible Investments as to the terms relating to the acquisition, sale or other dispositions thereof.

 

(iii)            
Subject to any applicable terms of the Collateral Administration Agreement, the Collateral Manager shall monitor the Assets
on behalf of the Issuer on an ongoing basis and shall provide or cause to be provided to the Issuer all reports, schedules and
other data reasonably available to the Collateral Manager that the Issuer is required to prepare and deliver or cause to be prepared
and delivered under the Indenture, in such forms and containing such information required thereby, in reasonably sufficient time
for such required reports, schedules and data to be reviewed and delivered by or on behalf of the Issuer to the parties entitled
thereto under the Indenture.

 

    	 	7	 

     

    

The Collateral Manager shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing reasonably believed by it to be genuine and to have been signed or sent by a Person that the Collateral
Manager has no reason to believe is not duly authorized. The Collateral Manager also may rely upon any statement made to it orally
or by telephone and made by a Person the Collateral Manager has no reason to believe is not duly authorized, and shall not incur
any liability for relying thereon. The Collateral Manager is entitled to rely on any other information furnished to it by third
parties that it reasonably believes in good faith to be genuine.

 

(iv)            
The Collateral Manager, on behalf of the Issuer, shall be responsible for obtaining, to the extent reasonably practicable
and to the extent such information is available to it, any information concerning whether a Collateral Obligation has become a
Defaulted Obligation, a Current Pay Obligation, a Credit Risk Obligation or a Credit Improved Obligation. In connection with the
acquisition of any Collateral Obligation, the Collateral Manager shall ensure that the Origination Requirement is satisfied.

 

(v)              
The Collateral Manager may, subject to and in accordance with the Indenture, as agent of the Issuer and on behalf of the
Issuer, direct the Trustee to take, or take on behalf of the Issuer, as applicable, any of the following actions with respect to
a Collateral Obligation, Equity Security or Eligible Investment (as applicable):

 

(A)            
purchase or otherwise acquire such Collateral Obligation, Equity Security or Eligible Investment;

 

(B)             
retain such Collateral Obligation, Equity Security or Eligible Investment;

 

(C)             
sell or otherwise dispose of such Collateral Obligation, Equity Security or Eligible Investment (including any assets received
by way of Offers, workouts and restructurings on assets owned by the Issuer) in the open market or otherwise;

 

(D)            
if applicable, tender such Collateral Obligation, Equity Security or Eligible Investment;

 

(E)             
if applicable, consent to or refuse to consent to any proposed amendment, modification, restructuring, exchange, waiver
or Offer and give or refuse to give any notice or direction;

 

(F)              
retain or dispose of any securities or other property (if other than cash) received by the Issuer;

 

(G)            
call or waive any default with respect to any Defaulted Obligation;

 

(H)            
vote to accelerate the maturity of any Defaulted Obligation;

 

    	 	8	 

     

    

(I)               
participate in a committee or group formed by creditors of an Obligor or an issuer under a Collateral Obligation, Eligible
Investment or Equity Security;

 

(J)               
after or in connection with the payment in full of all amounts owed under the Secured Notes and the termination without
replacement of the Indenture or in connection with any redemption of the Notes, advise the Issuer as to when, in the view of the
Collateral Manager, it would be in the best interest of the Issuer to liquidate all or any portion of the Issuer’s investment
portfolio and, if applicable, after discharge of the Indenture, render such assistance as may be reasonably necessary or reasonably
required by the Issuer in connection with such liquidation or any actions necessary to effectuate a redemption of the Notes;

 

(K)            
advise and assist the Issuer with respect to the valuation of the Assets, to the extent required or permitted by the Indenture;

 

(L)             
provide strategic and financial planning advice (including advice on utilization of assets) and prepare financial statements
and other similar reports; and

 

(M)           
exercise any other rights or remedies with respect to such Collateral Obligation, Equity Security or Eligible Investment
as provided in the Underlying Instruments of the Obligor or issuer under such Assets or the other documents governing the terms
of such Assets or take any other action consistent with the terms of this Agreement or of the Indenture which the Collateral Manager
reasonably determines to be in the best interests of the Issuer.

 

(vi)            
The Collateral Manager may:

 

(A)            
retain accounting, tax, counsel and other professional services on behalf of the Issuer as may be needed by the Issuer;
and

 

(B)             
consult on behalf of the Issuer with S&P at such times as may be reasonably requested thereby and provide S&P with
any information reasonably requested in connection with its monitoring of the acquisition and disposition of Collateral Obligations
and the maintenance of its ratings of the Secured Notes.

 

(vii)          
In connection with the purchase of any Collateral Obligation by the Issuer, the Collateral Manager shall prepare, on behalf
of the Issuer, the information required to be delivered to the Trustee pursuant to the Indenture.

 

(d)              
In performing its duties hereunder and when exercising its discretion and judgment in connection with any transactions involving
the Assets, the Collateral Manager shall carry out any reasonable written directions of the Issuer for the purpose of the Issuer’s
compliance with its Organizational Instruments and the Indenture and the other Transaction Documents; provided that such
directions are not inconsistent with any provision of this Agreement or the Indenture by which the Collateral Manager is bound.

 

    	 	9	 

     

    

(e)               
In providing services hereunder, the Collateral Manager may, without the consent of any party, employ third parties, including,
without limitation, its Affiliates, to render advice (including investment advice), to provide services to arrange for trade execution
and otherwise provide assistance to the Issuer or the Collateral Manager and to perform any of its duties hereunder; provided
that the Collateral Manager shall not be relieved of any of its duties hereunder regardless of the performance of any such duties
by third parties, including Affiliates.

 

(f)               
The Collateral Manager shall not be bound to comply with any amendment or supplement to the Indenture until it has received
a copy of any such amendment or supplement from the Issuer or the Trustee and, if such amendment or supplement, as described in
the next sentence, requires the Collateral Manager’s consent, shall have consented thereto in writing and until such amendment
or supplement is in fact validly executed and enforceable. The Issuer agrees that it shall not permit to become effective any amendment
or supplement to the Indenture that affects the obligations or rights of the Collateral Manager in any manner including, without
limitation, (i) modifying the restrictions on the acquisition and disposition of Collateral Obligations or the definition of “Collateral
Obligation,” (ii) expanding or restricting the Collateral Manager’s discretion or (iii) affecting the amount or priority
of any fees or other amounts payable to the Collateral Manager in any manner unless, in each case, the Collateral Manager has been
given prior written notice of such amendment or supplement and has consented thereto in writing.

 

Section 3.               
Purchase and Sale Transactions; Brokerage.

 

(a)               
The Collateral Manager, subject to and in accordance with the Indenture, hereby agrees that it shall cause any Transaction
to be conducted on terms and conditions negotiated on an arm’s-length basis and in accordance with applicable law.

 

(b)              
The Collateral Manager will seek to obtain the best execution (but shall have no obligation to obtain the lowest prices
available) for all orders placed with respect to any Transaction, in a manner permitted by law and in a manner it believes to be
in the best interests of the Issuer. Subject to the preceding sentence, the Collateral Manager may, in the allocation of business,
select brokers and/or dealers with whom to effect trades on behalf of the Issuer and may open cash trading accounts with such brokers
and dealers (provided that none of the Assets may be credited to, held in or subject to the lien of the broker or dealer
with respect to any such account). In addition, subject to the first sentence of this paragraph, the Collateral Manager may, in
the allocation of business, take into consideration research and other brokerage services furnished to the Collateral Manager or
its Affiliates by brokers and dealers which are not Affiliates of the Collateral Manager and furnished, in the Collateral Manager’s
good faith belief, in compliance with Section 28(e) of the Securities Exchange Act of 1934, as amended (“Section 28(e)”)
or, if Section 28(e) is not applicable, in compliance with the provisions set forth therein. Such services may be used by the Collateral
Manager in connection with its other advisory activities or investment operations. The Collateral Manager may aggregate sales and
purchase orders placed with respect to the Assets with similar orders being made simultaneously for other Clients of the Collateral
Manager or of Affiliates of the Collateral Manager, if in the Collateral Manager’s reasonable judgment such aggregation shall
result in an overall economic benefit to the Issuer, taking into consideration the advantageous selling or purchase price, brokerage
commission or other expenses, as well as the availability of such Assets or opportunity for sale on any other basis. In accounting
for such aggregated order price, commissions and other expenses may be apportioned on a weighted average basis. When a Transaction
occurs as part of any aggregate sales or purchase orders, the objective of the Collateral Manager will be to allocate the executions
among the Clients in an equitable manner and in accordance with the internal policies and procedures of the Collateral Manager
(as the same may be amended from time to time) and applicable law.

 

    	 	10	 

     

    

(c)               
The Issuer acknowledges and agrees that (i) the determination by the Collateral Manager of any benefit to the Issuer will
be subjective and will represent the Collateral Manager’s evaluation at the time that the Issuer will be benefited by relatively
better purchase or sales prices, lower brokerage commissions, lower transaction costs and expenses and beneficial timing of transactions
or any combination of any of these and/or other factors and (ii) the Collateral Manager shall be fully protected with respect to
any such determination to the extent the Collateral Manager acts in accordance with Section 2(b). The Issuer acknowledges
that, on the Closing Date, the Collateral Manager will be the Holder of all of the Subordinated Notes (including Subordinated Notes
sufficient to satisfy its obligations as Retention Provider pursuant to the terms of the Retention Letter), and that at any time
the Collateral Manager, Affiliates thereof or Clients thereof may acquire other classes of Notes, which may give rise to conflicts
of interest between the Collateral Manager’s duties to the Issuer under this Agreement and its duty to such other Clients.
Any such Holder of Notes may dispose of such Notes at any time, except that the Collateral Manager shall not transfer its interest
in any of the Subordinated Notes other than, subject to its obligations as Retention Provider to retain the Retained Amount pursuant
to the Retention Letter, to an Affiliate; provided that the Subordinated Notes may only be transferred if the Collateral
Manager provides an Officer’s certificate or Opinion of Counsel that the Collateral Manager will be in compliance with the
registration requirements of the Advisers Act after giving effect to such transfer.

 

(d)              
Subject to the Collateral Manager’s execution obligations described herein, including, without limitation, Sections
5(c) and 5(d), compliance with applicable law and compliance with the applicable provisions of the Indenture and the
terms of the exemptive relief granted to Garrison Capital Inc. with respect to certain negotiated co-investment transactions, the
Collateral Manager may effect transactions with the Issuer or its Affiliates (i) on an agency basis or (ii) on a principal basis
where the Collateral Manager or any of its Affiliates sells assets to or purchases assets from the Issuer.

 

Section 4.               
Additional Activities of the Collateral Manager.

 

(a)               
Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging in other businesses, or from
rendering services of any kind to the Issuer, the Trustee, the Placement Agent, any Holder or their respective Affiliates or any
other Person regardless of whether such business is in competition with the Issuer or otherwise. Without prejudice to the generality
of the foregoing, partners, members, managers, shareholders, directors, officers, employees and agents of the Collateral Manager,
Affiliates of the Collateral Manager, and the Collateral Manager may:

 

    	 	11	 

     

    

(i)                
serve as managers or directors (whether supervisory or managing), officers, employees, partners, agents, nominees or signatories
for the Issuer or any Affiliate thereof, or for any Obligor or issuer in respect of any of the Collateral Obligations, Equity Securities
or Eligible Investments or any Affiliate thereof, to the extent permitted by their respective Organizational Instruments and Underlying
Instruments, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any Obligor or issuer
in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities (or any Affiliate thereof) pursuant
to their respective Organizational Instruments;

 

(ii)              
to the extent permitted by applicable law, receive fees for services of whatever nature rendered to the Obligor or issuer
in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof;

 

(iii)            
be retained to provide services unrelated to this Agreement to the Issuer or its Affiliates and be paid therefor, on an
arm’s-length basis;

 

(iv)            
be a secured or unsecured creditor of, or hold a debt obligation of or equity interest in, the Issuer or any Affiliate thereof
or any Obligor or issuer of any Collateral Obligation, Eligible Investment or Equity Security or any Affiliate thereof;

 

(v)              
subject to Section 3(b) and Section 5, applicable law and the applicable provisions of the Indenture sell
any Collateral Obligation or Eligible Investment to, or purchase any Collateral Obligation or Equity Security from, the Issuer
while acting in the capacity of principal or agent;

 

(vi)            
underwrite, arrange, structure, originate, syndicate, act as a distributor of or make a market in any Collateral Obligation,
Equity Security or Eligible Investment;

 

(vii)          
serve as a member of any “creditors’ board”, “creditors’ committee” or similar creditor
group with respect to any Collateral Obligation, Defaulted Obligation, Eligible Investment or Equity Security; or

 

(viii)        
act as collateral manager, portfolio manager, investment manager and/or investment adviser or sub-adviser in collateralized
bond obligation vehicles, collateralized loan obligation vehicles and other similar warehousing, financing or investment vehicles.

 

(b)              
The Issuer acknowledges that there are generally no ethical screens or information barriers among the Collateral Manager
and certain of its Affiliates of the type that many firms implement to separate individuals who make investment decisions from
others who might possess applicable material, non-public information. The Issuer acknowledges that the Collateral Manager may be
prevented from causing the Issuer to transact in certain assets due, among other things, to internal restrictions imposed on the
Collateral Manager regarding the possession and use of material and/or non-public information and certain restrictions of the Investment
Company Act regarding co-investments with Affiliates. The Collateral Manager will not have any liability to the Issuer or any Holder
of any Note for the failure to disclose such information or for taking, or failing to take, any action based upon such information
or restrictions.

 

    	 	12	 

     

    

(c)               
Subject to applicable law, including the Investment Company Act, the Collateral Manager or any of its Affiliates may acquire
or sell assets, for its own account or for the accounts of its Clients, without either requiring or precluding the acquisition
or sale of such assets for the account of the Issuer. Such investments may be the same as or different from those made on behalf
of the Issuer. In the event that, in light of market conditions and investment objectives, the Collateral Manager determines that
it would be advisable to acquire the same Collateral Obligation both for the Issuer and either the proprietary account of the Collateral
Manager or any Affiliate of the Collateral Manager or another Client of the Collateral Manager, the Collateral Manager will allocate
investment opportunities across such entities for which such opportunities are appropriate, consistent with (1) its internal conflict
of interest and allocation policies, (2) any applicable requirements of the Advisers Act and (3) if and to the extent applicable,
certain restrictions of the Investment Company Act regarding co-investments with Affiliates and the terms of the exemptive relief
granted to Garrison Capital Inc. with respect to certain negotiated co-investment transactions.

 

(d)              
The Issuer acknowledges and agrees that the Collateral Manager and its Affiliates may invest for their own accounts or for
the accounts of others in certain assets that would be appropriate investments for the Issuer. The Issuer acknowledges that the
Collateral Manager and its Affiliates may enter into, for their own accounts or for the accounts of others, credit default swaps
relating to Obligors and issuers with respect to the Collateral Obligations included in the Assets.

 

(e)               
It is understood that, subject to applicable law, including the Investment Company Act and the requirements of the Collateral
Manager’s exemptive order regarding certain negotiated co-investment transactions, (i) the Collateral Manager and any of
its Affiliates may engage in any other business and furnish investment management and advisory services to others, including Persons
which may have investment policies similar to those followed by the Collateral Manager with respect to the Assets and which may
own securities or obligations of the same class, or which are of the same type, as the Collateral Obligations or the Eligible Investments
or other securities or obligations of the Obligor or issuer of the Collateral Obligations or the Eligible Investments; (ii) the
Collateral Manager will be free, in its sole discretion, to make recommendations to others, or effect transactions on behalf of
itself or for others, which may be the same as or different from those effected with respect to the Assets; and (iii) nothing in
the Indenture and this Agreement shall prevent the Collateral Manager or any of its Affiliates, acting either as principal or agent
on behalf of others, from buying or selling, or from recommending to or directing any other account to buy or sell, at any time,
securities or obligations of the same kind or class, or securities or obligations of a different kind or class of the same issuer,
as those directed by the Collateral Manager to be purchased or sold on behalf of the Issuer. It is understood that, to the extent
permitted by applicable law, including the Investment Company Act and the requirements of the Collateral Manager’s exemptive
order regarding certain negotiated co-investment transactions, the Collateral Manager, its Affiliates or their respective Related
Persons or any member of their families or a person or entity advised by the Collateral Manager may have an interest in a particular
transaction or in securities or obligations of the same kind or class, or securities or obligations of a different kind or class
of the same issuer, as those whose purchase or sale the Collateral Manager may direct hereunder.

 

    	 	13	 

     

    

Section 5.               
Certain Conflicts of Interest.

 

(a)               
The Issuer understands that the Collateral Manager and its Affiliates may have economic interests in (including, without
limitation, controlling equity interests or other equity or debt interests), be lenders to, receive payments from, render services
to, engage in transactions with or have other relationships with Obligors and issuers with respect to the Collateral Obligations
included in the Assets. In particular, subject to applicable law, the Collateral Manager and its Affiliates may make and/or hold
investments in an Obligor’s or issuer’s obligations or securities that may be pari passu, senior or junior in
ranking to an investment in such Obligor’s or issuer’s obligations or securities made and/or held by the Issuer, or
otherwise have interests different from or adverse to those of the Issuer. The Issuer agrees that, in the course of managing the
Collateral Obligations held by the Issuer, the Collateral Manager may consider its relationships with other Clients (including
obligors and issuers) and its Affiliates. The Collateral Manager may decline to make a particular investment for the Issuer in
view of such relationships. In addition, individuals who are partners, managers, members, shareholders, directors, officers, employees
or agents of the Collateral Manager or of one or more of its Affiliates may serve on boards of directors of, or otherwise have
ongoing relationships with, such Obligors and issuers. As a result, such individuals may possess information relating to Obligors
and issuers of Collateral Obligations that is (a) not known to or (b) known but restricted as to its use by the individuals at
the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations of the Collateral
Manager under this Agreement. Each of such ownership and other relationships may result in securities laws restrictions on transactions
in such securities by the Issuer and otherwise create conflicts of interest for the Issuer. The Issuer acknowledges and agrees
that, in all such instances, the Collateral Manager and its Affiliates may in their discretion make investment recommendations
and decisions that may be the same as or different from those made with respect to the Issuer’s investments and they have
no duty, in making or managing such investments, to act in a way that is favorable to the Issuer.

 

(b)              
The Issuer agrees that neither the Collateral Manager nor any of its Affiliates is under any obligation to offer all investment
opportunities of which they become aware to the Issuer or to account to the Issuer for (or share with the Issuer or inform the
Issuer of) any such transaction or any benefit received by them from any such transaction. The Issuer understands that the Collateral
Manager and/or its Affiliates may have, for their own accounts or for the accounts of others, portfolios with substantially the
same portfolio criteria as are applicable to the Issuer. Furthermore, the Collateral Manager and/or its Affiliates may make an
investment on their own behalf or on behalf of any Client without offering the investment opportunity or making any investment
on behalf of the Issuer and, accordingly, investment opportunities may not be allocated among all such Clients. The Issuer acknowledges
that affirmative obligations may arise in the future, whereby the Collateral Manager and/or its Affiliates are obligated to offer
certain investments to Clients before or without the Collateral Manager’s offering those investments to the Issuer. The Issuer
agrees that the Collateral Manager may make investments on behalf of the Issuer in securities or obligations that it has declined
to invest in or enter into for its own account, the account of any of its Affiliates or the account of any other Client.

 

    	 	14	 

     

    

(c)               
Subject to the provisions of the Indenture, this Agreement and applicable law, the Collateral Manager is hereby authorized
to effect client cross-transactions in which the Collateral Manager causes a purchase or sale of a Collateral Obligation or Eligible
Investment or a sale of an Equity Security to be effected between the Issuer and another account advised by the Collateral Manager
or any of its Affiliates. In addition, except as otherwise permitted pursuant to Section 2, with the prior authorization
of the Issuer, which authorization is hereby given and may be revoked at any time, the Collateral Manager is authorized to enter
into agency cross-transactions in which the Collateral Manager or any of its Affiliates act as broker for the Issuer and for the
other party to the transaction, to the extent permitted under applicable law, in which case the Collateral Manager or any such
Affiliate will receive commissions from, and have a potentially conflicting division of loyalties and responsibilities regarding,
both parties to the transaction.

 

(d)              
Subject to the Collateral Manager’s execution obligations described in Sections 3(a), 3(b) and 3(d)
and the covenants set forth in this Section 5, the Collateral Manager is hereby authorized to effect Principal Transactions
where the Issuer may invest in securities of issuers in which the Collateral Manager and/or its Affiliates have a debt, equity
or participation interest, in each case in accordance with applicable law. A “Principal Transaction” is a transaction
in which the Collateral Manager or any of its Affiliates sells assets to or purchases assets from the Issuer.

 

(e)               
The Issuer acknowledges that the Collateral Manager or its Affiliates will acquire all of the Subordinated Notes and that
the Collateral Manager, Affiliates thereof or Clients thereof may acquire Secured Notes. In certain circumstances, the interests
of the Issuer and/or the Holders with respect to matters as to which the Collateral Manager is advising the Issuer may conflict
with the interests of the Collateral Manager, its Affiliates or some of its other Clients. The Issuer hereby acknowledges that
various potential and actual conflicts of interest do or may exist with respect to the Collateral Manager as described in this
Agreement and in the Final Offering Circular; provided that nothing in this Section 5 shall be construed as altering
the duties of the Collateral Manager as set forth herein, in the Indenture or under applicable law.

 

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Section 6.               
Records; Confidentiality.

 

The Collateral Manager shall maintain or cause
to be maintained appropriate books of account and records relating to its services performed hereunder, and such books of account
and records shall be accessible for inspection by representatives of the Issuer, the Trustee, the Holders, and the Independent
accountants appointed by the Collateral Manager on behalf of the Issuer pursuant to Section 10.12 of the Indenture at any time
during normal business hours and upon not less than five Business Days’ prior notice; provided that any books or records
provided or made available to such representatives do not contain confidential information concerning other Clients of the Collateral
Manager or if so that such information is removed or redacted as appropriate prior to its release; and provided further
that such representatives prior to having access to such books or records sign any confidentiality agreement reasonably required
by the Collateral Manager concerning information reasonably deemed confidential by the Collateral Manager.

 

If requested by any of the Holders of the Class
A-1 Notes, the Collateral Manager shall participate in a meeting with the Holders of the Class A-1 Notes once during each fiscal
year of the Collateral Manager, to be held at a location in New York City and at a time reasonably determined by the Collateral
Manager; provided that such meeting shall be combined with any meeting that is held pursuant to Section 11(b) of the Sub-Collateral
Management Agreement dated September 29, 2016 between the Collateral Manager and Garrison Capital Advisers LLC (the “Sub-Collateral
Management Agreement”) such that no more than one such meeting under this Agreement and the Sub-Collateral Management
Agreement shall be held during any fiscal year of the Collateral Manager.

 

If requested by any of the Holders of the Class
A-1 Notes, the Collateral Manager shall (i) make requests of Garrison Capital Advisers LLC, as sub-adviser under the Sub-Collateral
Management Agreement (the “Sub-Adviser”), which the Collateral Manager is permitted to make pursuant to Section
11 of the Sub-Collateral Management Agreement and (ii) use commercially reasonable efforts to cause the Sub-Adviser to comply with
its duties and covenants specified in Section 11 of the Sub-Collateral Management Agreement, in each case, on the terms (and in
accordance with the conditions) specified therein.

 

The Collateral Manager shall keep confidential
any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information
to non-affiliated third parties except (a) with the prior written consent of the Issuer, (b) such information as S&P shall
reasonably request in connection with its rating of the Secured Notes or in supplying credit estimates on any Collateral Obligation
included in the Assets, (c) in connection with establishing trading or investment accounts or otherwise in connection with effecting
Transactions on behalf of the Issuer, (d) as required by (i) applicable law, regulation, court order, or a request by a governmental
regulatory agency with jurisdiction over the Collateral Manager or any of its Affiliates, (ii) the rules or regulations of any
self-regulating organization, body or official having jurisdiction over the Collateral Manager or any of its Affiliates or (iii)
the Irish Stock Exchange, (e) to its professional advisors (including, without limitation, legal, tax and accounting advisors),
(f) such information as shall have been publicly disclosed other than in known violation of this Agreement or the provisions of
the Indenture or shall have been obtained by the Collateral Manager on a non-confidential basis, (g) as expressly permitted in
the Final Offering Circular, in the Indenture or in any other Transaction Document, (h) such information as is necessary or appropriate
to disclose so that the Collateral Manager may perform its duties hereunder, under the Indenture or any other Transaction Document
or (i) general performance information which may be used by the Collateral Manager, its Affiliates or their Related Persons in
connection with their marketing activities.

 

    	 	16	 

     

    

For purposes of this Section 6, the Holders,
the Trustee, the Calculation Agent and the Collateral Administrator shall not be considered “non-affiliated third parties.”

 

Notwithstanding the foregoing, it is agreed
that the Collateral Manager (and with respect to clause (e) of this sentence, each of its respective employees, representatives
or other agents) may disclose (a) that it is serving as collateral manager of the Issuer, (b) the nature, aggregate principal amount
and overall performance of the Issuer’s assets, (c) the amount of earnings on the Assets, (d) such other information about
the Issuer, the Assets and the Notes as is customarily disclosed by managers of collateralized loan obligations and (e) to any
and all Persons, without limitation of any kind, the United States federal income tax treatment and United States federal income
tax structure of the transactions contemplated by the Indenture, this Agreement and the related documents and all materials of
any kind (including opinions and other tax analyses) that are provided to them relating to such United States federal income tax
treatment and United States income tax structure.

 

Section 7.               
Obligations of Collateral Manager.

 

In accordance with the Standard of Care set
forth in Section 2(b), the Collateral Manager shall not intentionally take any action that it knows would (a) cause the
Issuer to elect to be treated as a corporation for U.S. federal income tax purposes, (b) not be permitted by the Issuer’s
Organizational Instruments, copies of which the Collateral Manager acknowledges the Issuer has provided to the Collateral Manager,
or to the extent consented to by the Collateral Manager, amendments thereto, (c) violate any law, rule or regulation of any
governmental body or agency having jurisdiction over the Issuer, including, without limitation, actions which would violate any
United States federal, state or other applicable securities law that is known by the Collateral Manager to be applicable to the
Issuer, and in each case, the violation of which would have a Material Adverse Effect, (d) require registration of the Issuer,
the Co-Issuer or the pool of Assets as an “investment company” under Section 8 of the Investment Company Act or (e)
knowingly and willfully adversely affect the interests of the Issuer in the Assets in any material respect (other than (i) as expressly
permitted hereunder or under the Indenture or (ii) in connection with any action taken in the ordinary course of business of the
Collateral Manager in accordance with its Standard of Care).

 

If the Collateral Manager is ordered by the
Issuer or the requisite Holders to take any action which would, or could reasonably be expected to, in each case in its reasonable
business judgment, have any such consequences, the Collateral Manager shall promptly notify the Issuer and the Trustee that such
action would, or could reasonably be expected to, in each case in its reasonable business judgment, have one or more of the consequences
set forth above and shall not take such action unless the Issuer then requests the Collateral Manager to do so and both a Majority
of the Controlling Class and a Majority of the Subordinated Notes have consented thereto in writing. Notwithstanding any such request,
the Collateral Manager shall not take such action unless (i) arrangements satisfactory to it are made to insure or indemnify the
Collateral Manager, Affiliates of the Collateral Manager and shareholders, partners, members, managers, directors, officers or
employees of the Collateral Manager or such Affiliates from any liability and expense it may incur as a result of such action and
(ii) if the Collateral Manager so requests in respect of a question of law, the Issuer delivers to the Collateral Manager an opinion
of counsel (from outside counsel reasonably satisfactory to the Collateral Manager) that the action so requested does not violate
any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer or over the Collateral Manager.

 

    	 	17	 

     

    

Neither the Collateral Manager nor its Affiliates,
shareholders, partners, members, managers, directors, officers or employees shall be liable to the Issuer or any other Person,
except as provided in Section 10. Notwithstanding anything contained in this Agreement to the contrary, any indemnification
or insurance by the Issuer provided for in this Section 7 or Section 10 shall be payable out of the Assets in accordance
with the Priority of Payments, and the Collateral Manager may take into account such Priority of Payments in determining whether
any proposed indemnity arrangements contemplated by this Section 7 are satisfactory.

 

Section 8.               
Compensation.

 

(a)               
As compensation for the performance of its obligations as Collateral Manager, the Collateral Manager will be entitled to
receive a fee on each Payment Date (in accordance with the Priority of Payments), which will consist of the Senior Collateral Management
Fee and the Subordinated Collateral Management Fee (collectively, the “Collateral Management Fee”).

 

The Senior Collateral Management Fee (the “Senior
Collateral Management Fee”) will accrue quarterly in arrears on each Payment Date (prorated for the related Interest
Accrual Period), in an amount equal to 0.25%, each per annum (calculated on the basis of a 360-day year consisting of twelve 30-day
months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the
Senior Collateral Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) that has been
waived or deferred by the Collateral Manager hereunder.

 

The Subordinated Collateral Management Fee (the
“Subordinated Collateral Management Fee”) will accrue quarterly in arrears on each Payment Date (prorated for
the related Interest Accrual Period), in an amount equal to 0.35%, each per annum (calculated on the basis of a 360-day
year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment
Date; provided that the Subordinated Collateral Management Fee payable on any Payment Date shall not include any such fee
(or any portion thereof) that has been waived or deferred by the Collateral Manager hereunder.

 

    	 	18	 

     

    

(b)              
The Collateral Management Fee is payable on each Payment Date in accordance with the Priority of Payments only to the extent
that sufficient Interest Proceeds or Principal Proceeds are available. To the extent they are not paid on any Payment Date when
due, the Senior Collateral Management Fee and the Subordinated Collateral Management Fee will be deferred and will be payable on
subsequent Payment Dates on which any funds are available therefor in accordance with the Priority of Payments, without interest.

 

(c)               
The Collateral Manager may, in its sole discretion (but shall not be obligated to), elect to waive all or any portion of
the Collateral Management Fee payable to the Collateral Manager on any Payment Date. Any such election shall be made by the Collateral
Manager by delivering written notice thereof to the Trustee no later than the Determination Date immediately prior to such Payment
Date. Any election to waive the Collateral Management Fee may also take the place of written standing instructions to the Trustee;
provided that such standing instructions may be rescinded by the Collateral Manager at any time.

 

(d)              
In addition, the Collateral Manager may, in its sole discretion, elect to defer payment of any or all of its Senior Collateral
Management Fee or Subordinated Collateral Management Fee otherwise due and payable on any Payment Date (respectively, the “Current
Deferred Senior Collateral Management Fee” and the “Current Deferred Subordinated Collateral Management Fee”
and, collectively, the “Current Deferred Collateral Management Fee”).  Any Current Deferred Collateral
Management Fee for such Payment Date will be distributed as Interest Proceeds or, at the option of the Collateral Manager, as Principal
Proceeds.  After such Payment Date, any Current Deferred Collateral Management Fee will be added to the cumulative amount
of the Senior Collateral Management Fee or the Subordinated Collateral Management Fee, as applicable, which the Collateral Manager
has elected to defer on prior Payment Dates and which has not been repaid (respectively, the “Cumulative Deferred Senior
Collateral Management Fee” and the “Cumulative Deferred Subordinated Collateral Management Fee” and,
collectively, the “Cumulative Deferred Collateral Management Fee”). Any Cumulative Deferred Collateral Management
Fee will be payable, without interest, on any subsequent Payment Date at the election of the Collateral Manager to the extent funds
are available for such purpose in accordance with the Priority of Payments.  Any election to defer the Collateral Management
Fee may also be made by written standing instructions to the Trustee; provided that such standing instructions may be rescinded
by the Collateral Manager at any time except during the period between a Determination Date and Payment Date.

 

(e)               
If this Agreement is terminated pursuant to Section 14 hereof or otherwise or if the Collateral Manager resigns,
is removed or assigns this Agreement in accordance with the terms hereof, the Collateral Management Fee shall be accrued from the
Payment Date occurring on or immediately prior to the date of such resignation, removal or assignment and shall be due and payable
together with all other amounts owing to such predecessor Collateral Manager under this Agreement or the Indenture on the first
Payment Date following the date of such resignation, removal or assignment, subject to the Priority of Payments described in the
Indenture.

 

    	 	19	 

     

    

(f)               
Except as otherwise set forth herein and in the Indenture, the Collateral Manager will continue to serve as Collateral Manager
under this Agreement notwithstanding that the Collateral Manager will not have received amounts due it under this Agreement because
sufficient funds were not then available pursuant to the terms of the Indenture to pay such amounts in accordance with the Priority
of Payments.

 

Section 9.               
Benefit of the Agreement.

 

The Collateral Manager shall perform its obligations
hereunder in accordance with the terms of this Agreement and the terms of the Indenture and the other Transaction Documents applicable
to it. The Collateral Manager agrees and consents to the provisions contained in Article XV of the Indenture. In addition, the
Collateral Manager acknowledges the pledge by the Issuer of this Agreement under the granting clause of the Indenture.

 

Section 10.           
Limits of Collateral Manager Responsibility.

 

(a)               
Notwithstanding anything in this Agreement to the contrary, none of the Collateral Manager, its Affiliates or their respective
Related Persons assumes any responsibility under this Agreement, other than the Collateral Manager’s assumption of its responsibility
to render the services required to be performed by it hereunder and under the terms of the Indenture applicable to it in good faith,
subject to the Standard of Care described in Section 2(b). The Collateral Manager shall not be responsible for any action
or inaction of the Issuer, the Trustee or any other Person in following or declining to follow any advice, recommendation or direction
of the Collateral Manager, including as set forth in Section 7. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Parties (as defined below) shall not be liable to the Issuer, the Trustee, any Holder, the Placement Agent, any
of their respective Affiliates, or Related Persons or any other Persons for any act, omission, error of judgment, mistake of law,
or for any claim, loss, liability, damage, judgments, assessments, settlement, cost, or other expense (including attorneys’
fees and expenses and court costs) arising out of or with respect to any investment or for any other act or omission in the performance
of the Collateral Manager’s obligations under or in connection with this Agreement or the terms of any other Transaction
Document applicable to the Collateral Manager, incurred as a result of actions taken or recommended or for any omissions of the
Collateral Manager or any of its Related Persons, or for any decrease in the value of the Assets, except for liability to which
the Collateral Manager would be subject (i) by reason of acts or omissions constituting bad faith, willful misconduct or gross
negligence in the performance of its duties hereunder and under the terms of the Indenture or (ii) caused by (x) an untrue statement
of a material fact included in the Collateral Manager Information or (y) the omission by the Collateral Manager of a material fact
necessary to make the statements in the Collateral Manager Information, in light of the circumstances in which they were made,
not misleading (the preceding clauses (i) and (ii) collectively referred to for purposes of this Section 10 as “Collateral
Manager Breaches”). Notwithstanding any provision herein or in the Indenture to the contrary, the Collateral Manager
shall not be liable for any consequential, indirect, punitive, exemplary or treble damages or lost profits hereunder or under the
Indenture regardless of whether such losses or damages are foreseeable and regardless of the form of action. Nothing contained
herein shall be deemed to waive any liability which cannot be waived under applicable state or federal law or any rules or regulations
adopted thereunder.

 

    	 	20	 

     

    

(b)              
(i) The Issuer shall indemnify and hold harmless (the Issuer in such case, the “Collateral Manager Indemnifying
Party”) the Collateral Manager, its Affiliates and their respective Related Persons (each, in such case, an “Issuer
Indemnified Party”) from and against any and all losses, claims, damages, judgments, assessments, costs or other liabilities
(collectively, “Losses”) and will promptly reimburse each Issuer Indemnified Party for all reasonable fees and
expenses incurred by any such Issuer Indemnified Party with respect thereto (including reasonable fees and expenses of counsel)
(collectively, “Expenses”) arising out of or in connection with the issuance of the Notes (including, without
limitation, any untrue statement of material fact contained in the Final Offering Circular, or omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case, other than the Collateral Manager Information), the transactions contemplated by
the Final Offering Circular, the Indenture or this Agreement and any acts or omissions of any such Issuer Indemnified Party; provided
that such Issuer Indemnified Party shall not be indemnified for any Losses or Expenses incurred as a result of any act or omission
by such Issuer Indemnified Party that constitutes a Collateral Manager Breach. Notwithstanding anything contained herein to the
contrary, the obligations of the Issuer under this Section 10 to indemnify any Issuer Indemnified Party for any Losses or
Expenses are non-recourse obligations of the Issuer payable solely out of the Assets in accordance with the Priority of Payments
set forth in the Indenture.

 

(ii)              
The Collateral Manager shall indemnify and hold harmless (the Collateral Manager in such case, the “Issuer Indemnifying
Party” and, together with the Collateral Manager Indemnifying Party, the “Indemnifying Parties” and
each, an “Indemnifying Party”) the Issuer, its Affiliates and their respective Related Persons (each, in such
case, a “Collateral Manager Indemnified Party” and, together with the Issuer Indemnified Party, the “Indemnified
Parties” and each, an “Indemnified Party”) from and against any and all Losses and shall promptly
reimburse each such Collateral Manager Indemnified Party for all reasonable Expenses as such Expenses are incurred in investigating,
preparing, pursuing or defending any actions in respect of or arising out of any Collateral Manager Breaches; provided that
the Collateral Manager shall not be liable for any consequential, punitive, exemplary or treble damages or lost profits.

 

(c)               
An Indemnified Party shall (or, with respect to the Related Persons of the Collateral Manager or of the Issuer, as applicable,
the Collateral Manager or the Issuer, as applicable, shall cause such Indemnified Party to) promptly notify the Indemnifying Party
if the Indemnified Party receives a complaint, claim, compulsory process or other notice of any Loss giving rise to a claim for
indemnification under this Section 10, but failure to so notify the Indemnifying Party or to comply with paragraph (d) below
shall not relieve such Indemnifying Party from its obligations under this Section 10 unless and to the extent that such
Indemnifying Party did not otherwise learn of such action or proceeding and to the extent such failure results in the forfeiture
by the Indemnifying Party of material rights and defenses.

 

    	 	21	 

     

    

(d)              
With respect to any claim made or threatened against an Indemnified Party, or compulsory process or request served upon
such Indemnified Party for which such Indemnified Party is or may be entitled to indemnification under this Section 10,
such Indemnified Party shall (or with respect to the Related Persons of the Collateral Manager or of the Issuer, as applicable,
the Collateral Manager or the Issuer, as applicable, shall cause such Indemnified Party to):

 

(i)                
at the Indemnifying Party’s expense, provide the Indemnifying Party such information and cooperation with respect
to such claim as the Indemnifying Party may reasonably require, including, but not limited to, making appropriate personnel available
to the Indemnifying Party at such reasonable times as the Indemnifying Party may request;

 

(ii)              
at the Indemnifying Party’s expense, cooperate and take all such steps as the Indemnifying Party may reasonably request
to preserve and protect any defense to such claim;

 

(iii)            
in the event suit is brought with respect to such claim, upon reasonable prior notice, afford to the Indemnifying Party
the right, which the Indemnifying Party may exercise in its sole discretion and at its expense, (A) to participate in the investigation,
defense and settlement of such claim, and, (B) to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory
to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party),
and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party under this Section 10 for any legal fees and expenses of other counsel
or any other expenses, in each case subsequently incurred by such Indemnified Party, in connection with the defense thereof other
than reasonable costs of investigation, except that, if such Indemnified Party reasonably determines that counsel selected by the
Indemnifying Party has a conflict of interest, such Indemnifying Party shall pay the reasonable fees and disbursements of one additional
counsel selected by the Indemnified Party (in addition to any local counsel) separate from its own counsel for all Indemnified
Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances; and

 

(iv)            
neither incur any material expense to defend against nor make any admission with respect thereto (other than routine or
incontestable admissions or factual admissions the failure to make which could expose such Indemnified Party to (A) unindemnified
liability or (B) only if the Indemnified Party is the Collateral Manager or an Affiliate or Related Person of the Collateral Manager
or of an Affiliate thereof, any liability in respect of which, in the good faith determination of such Indemnified Party, the Indemnifying
Party is unlikely to have sufficient funds available to indemnify the Indemnified Party in full, taking into account the Priority
of Payments), nor permit a default or consent to the entry of any judgment in respect thereof, in each case without the prior written
consent of the Indemnifying Party; provided that the Indemnifying Party shall have advised such Indemnified Party that such
Indemnified Party is entitled to be indemnified hereunder with respect to such claim.

 

    	 	22	 

     

    

(e)               
No Indemnified Party shall, without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, settle or compromise any claim giving rise to a claim for indemnity hereunder, or permit a default or consent to the
entry of any judgment in respect thereof.

 

(f)               
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment with respect to any claim giving rise to a claim for indemnity
hereunder if such settlement includes a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any Indemnified Party.

 

(g)              
The compliance of the Collateral Manager’s actions with the provisions of the Indenture and this Agreement shall be
determined on the date of action only, based upon the prices and characteristics of the Assets on the date of such action (or on
the most recent date practicable, in the case of Collateral Obligations not purchased or sold on such date); provided that
the provisions of the Indenture and this Agreement shall not be deemed breached as a result of changes in value, status or any
other conditions of an investment following the date of such action and the Collateral Manager shall not be responsible under this
Agreement for the performance of or any losses on the Assets acquired in accordance with this Agreement.

 

(h)              
The Assets shall be held by the Custodian appointed by the Issuer pursuant to the Indenture. The Collateral Manager and
its Affiliates shall at no time have custody or physical control of the Assets. The Collateral Manager shall not be liable for
any act or omission of the Custodian, the Collateral Administrator, the Calculation Agent or the Trustee or any sub-custodian or
other agent appointed by the Calculation Agent or the Issuer. Any compensation owed to the Collateral Administrator, the Trustee
or the Calculation Agent for their services to the Issuer shall be the obligation of the Issuer and not the Collateral Manager.

 

(i)                
Notwithstanding anything in this Agreement to the contrary, the Collateral Manager’s obligations hereunder will be
solely the obligations of the Collateral Manager, and the Issuer will not have any recourse to any Related Person of the Collateral
Manager, with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any transactions
contemplated hereby.

 

(j)                
The Collateral Manager shall not be responsible for any liability resulting from any failure by the Collateral Manager to
fulfill its duties under this Agreement if such liability or failure shall be caused by or directly or indirectly due to a Force
Majeure Event, provided that the Collateral Manager shall use commercially reasonable efforts to minimize the effect of
the same. As used herein, the term “Force Majeure Event” means such an operation of the forces of nature as
reasonable foresight and ability could not foresee or reasonably provide against including but not limited to, acts of god, flood,
war (whether declared or undeclared), terrorism, fire, strikes or work stoppages for any reason, embargo, government action, including
any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement,
inability to obtain material, equipment, or communications or computer facilities, or the failure of equipment or interruption
of communications or computer facilities, and other causes beyond a party’s control whether or not of the same class or kind
as specifically named above.

 

    	 	23	 

     

    

(k)              
The Collateral Manager shall be entitled to conclusively rely in good faith, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, email, telex or teletype
message, statement (which may be made orally or by telephone), order or other document or communication reasonably believed by
it to be genuine and correct and to have been signed, sent or made by a Person that the Collateral Manager has no reason to believe
is not duly authorized and upon the advice and statements of independent accountants.

 

(l)                
The Collateral Manager may consult with reputable outside legal counsel as to questions of law pertaining to the performance
of its duties hereunder and the advice or any opinion of such counsel on any such question shall be full and complete authorization
and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with the advice or opinion
of such counsel.

 

Section 11.           
No Joint Venture.

 

The Issuer and the Collateral Manager are not
partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers
or impose any liability as such on either of them. The Collateral Manager shall be deemed, for all purposes herein, an independent
contractor and shall, except as otherwise expressly provided herein or in the Indenture or authorized by the Issuer from time to
time, have no authority to act for or represent the Issuer in any way or otherwise be deemed an agent of the Issuer. It is acknowledged
that neither the Collateral Manager nor any of its Affiliates has provided or shall provide any tax, accounting or legal advice
or assistance to the Issuer or any other Person in connection with the transactions contemplated hereby.

 

Section 12.           
Term; Termination.

 

(a)               
This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following
occurs: (i) the final liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Noteholders
in accordance with the Indenture, (ii) the payment in full of the Secured Notes, and the satisfaction and discharge of the Indenture
in accordance with its terms or (iii) the early termination of this Agreement in accordance with Section 12(b), (c),
(d), (e) or (f) or Section 14.

 

(b)              
Subject only to clause (c) below, the Collateral Manager may resign, upon 90 days’ prior written notice to the Issuer
(or such shorter notice as is acceptable to the Issuer) and the Trustee (and the Issuer shall direct the Trustee to distribute
a copy of such notice to the Holders within five (5) Business Days of receipt); provided that the Collateral Manager shall
have the right to resign immediately upon the effectiveness of any material change in applicable law or regulations which renders
the performance by the Collateral Manager of its duties hereunder or under the Indenture to be a violation of such law or regulation.

 

    	 	24	 

     

    

(c)               
No resignation or removal of the Collateral Manager pursuant to this Agreement shall be effective until the date as of which
a successor Collateral Manager shall have been appointed and approved and has accepted and assumed all of the Collateral Manager’s
duties and obligations pursuant to this Agreement in writing (an “Instrument of Acceptance”).

 

(d)              
Promptly after notice of any removal under Section 14 or any resignation of the Collateral Manager that is to take
place while any of the Notes are Outstanding, the Issuer shall transmit or cause the Trustee to transmit copies of such notice
to the Holders and S&P and shall appoint a successor Collateral Manager in accordance with the procedures set forth in clause
(e) below; provided that (i) such successor Collateral Manager has demonstrated an ability to professionally and competently
perform duties similar to those imposed upon the Collateral Manager hereunder, (ii) such successor Collateral Manager is legally
qualified and has the capacity to assume all of the responsibilities, duties and obligations of the Collateral Manager hereunder
and under the applicable terms of the Indenture, (iii) such successor Collateral Manager has agreed to coordinate with the replaced
Collateral Manager regarding communications with S&P, (iv) such appointment does not cause or result in the Issuer or the Co-Issuer
becoming, or require the pool of Assets to be registered as, an investment company under the Investment Company Act, (v) the Rating
Agency Condition has been satisfied with respect to such appointment and (vi) the appointment of which does not subject the Issuer
to material adverse tax consequences.

 

(e)               
A Majority of the Subordinated Notes will nominate a successor Collateral Manager that meets the criteria set forth in clause
(d) above (other than subclause (v) thereof) within 30 days of initial notice of the resignation or removal of the Collateral Manager
and if the Majority of the Controlling Class consents thereto, such proposed successor will be appointed the successor Collateral
Manager by the Issuer; provided that the Rating Agency Condition has been satisfied with respect to such appointment. If
a Majority of the Subordinated Notes fails to nominate such a successor within 30 days of initial notice of the resignation or
removal of the Collateral Manager or if a Majority of the Controlling Class does not consent thereto within ten days of the date
of the notice of such nomination, then a Majority of the Controlling Class shall, within 60 days of initial notice of the resignation
or removal of the Collateral Manager, nominate a successor Collateral Manager that meets the criteria set forth in clause (d) above
(other than subclause (v) thereof). If a Majority of the Subordinated Notes consents to such Controlling Class nominee, such nominee
shall be appointed the successor Collateral Manager by the Issuer; provided that the Rating Agency Condition has been satisfied
with respect to such appointment. If no successor Collateral Manager is appointed within 90 days with the consent thereto of a
Majority of the Controlling Class (if nominated by a Majority of the Subordinated Notes) or the consent thereto of a Majority of
the Subordinated Notes (if nominated by a Majority of the Controlling Class) (or, in the event of a change in applicable law or
regulation which renders the performance by the Collateral Manager of its duties under this Agreement or the Indenture to be a
violation of such law or regulation, within 30 days) following the termination or resignation of the Collateral Manager, any of
the Issuer, the Collateral Manager, a Majority of the Subordinated Notes and the Majority of the Controlling Class shall have the
right to petition a court of competent jurisdiction to appoint a successor Collateral Manager, in any such case whose appointment
shall become effective after such successor has accepted its appointment and assumed all of the Collateral Manager’s duties
and obligations pursuant to this Agreement in an Instrument of Acceptance and without the consent of any Holder.

 

    	 	25	 

     

    

(f)               
The successor Collateral Manager shall be entitled to the Collateral Management Fee set forth in Section 8(a) (and,
to the extent such fees are not payable due to insufficient funds, the Collateral Management Fee due and owing to such successor
Collateral Manager under Section 8(b)) and no compensation payable to such successor Collateral Manager shall be greater
than as set forth in Section 8 without the prior written consent of 100% of the Holders of each Class of Notes (voting separately
by Class), including Collateral Manager Notes. Upon the later of the expiration of the applicable notice periods with respect to
termination specified in this Section 12 or in Section 14 and the acceptance of its appointment hereunder by the
successor Collateral Manager, all authority and power of the Collateral Manager hereunder, whether with respect to the Assets or
otherwise, shall automatically and without action by any person or entity pass to and be vested in the successor Collateral Manager.
The Issuer, the Trustee and the successor Collateral Manager shall take such action (or cause the outgoing Collateral Manager to
take such action) consistent with this Agreement and as shall be necessary to effect any such succession.

 

(g)              
If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability
or obligation of either party to the other, except as provided in clause (h) below.

 

(h)              
Sections 6, 7 (with respect to any indemnity or insurance provided thereunder), 8 (with respect to
any accrued and unpaid Collateral Management Fee) 10, 12(g), 15, 17, and 21 through 27
shall survive any termination of this Agreement pursuant to this Section 12 or Section 14.

 

Section 13.           
Assignments.

 

(a)               
Except as otherwise provided in this Section 13, the Collateral Manager may not assign or delegate (except as provided
in Section 2(e)) its rights or responsibilities under this Agreement without (i) satisfaction of the Rating Agency Condition
with respect thereto, (ii) providing 30 days’ prior written notice of any proposed assignment or delegation to the Issuer
and the Trustee (who shall promptly forward such notice to the Holders of the Notes) and (iii) the approval in writing by (A) a
Majority of the Subordinated Notes and (B) for an assignment to any person who is not an Affiliate of the Collateral Manager, a
Majority of the Controlling Class.

 

(b)              
The Collateral Manager may without satisfaction of the Rating Agency Condition and without obtaining the consent of the
Holders of the Secured Notes, (1) assign any of its rights or obligations under this Agreement to an Affiliate; provided
that such Affiliate (i) has demonstrated ability, whether as an entity or by its principals and employees, to professionally and
competently perform duties similar to those imposed upon the Collateral Manager pursuant to this Agreement, (ii) has the legal
right and capacity to act as Collateral Manager under this Agreement, (iii) shall not cause the Issuer or the pool of Assets to
become required to register under the provisions of the Investment Company Act and (iv) immediately after the assignment, employs
principal personnel performing the duties required under this Agreement who are the same individuals who would have performed such
duties had the assignment not occurred or (2) enter into (or have its parent enter into) any consolidation or amalgamation with,
or merger with or into, or transfer of all or substantially all of its asset management business to, another entity and, at the
time of such consolidation, merger, amalgamation or transfer the resulting, surviving or transferee entity assumes all the obligations
of the Collateral Manager under this Agreement generally (whether by operation of law or by contract) and the other entity has
substantially the same investment staff providing investment management services to the Issuer; provided that the Collateral
Manager shall deliver prior notice to S&P of any assignment, delegation or combination made pursuant to this sentence. Any
assignee under this Agreement shall, before such assignment becomes effective, execute and deliver to the Issuer and the Trustee
(and the Trustee shall promptly provide a copy thereof to the Holders of the Notes) a counterpart of this Agreement naming such
assignee as Collateral Manager. Upon the execution and delivery of any such assignment by the assignee, the Collateral Manager
will be released from further obligations pursuant to this Agreement except with respect to its obligations and agreements arising
under Sections 10, 12(g), 17, 21 through 24, 26 and 27, Section 25 in respect
of its acts or omissions occurring prior to such assignment and except with respect to its obligations under Section 15
after such assignment. The consent provisions for the approval of an assignee for the Collateral Manager under this Section
13(b) shall not apply in the event of the Collateral Manager’s resignation or removal pursuant to Section 12 or
14, and instead the consent provisions of Section 12 shall govern.

 

    	 	26	 

     

    

(c)               
This Agreement shall not be assigned by the Issuer without (i) the prior written consent of (1) the Collateral Manager,
(2) the Trustee and (3) a Majority of each Class of Notes (voting separately) and (ii) satisfaction of the Rating Agency Condition,
except in the case of (x) assignment by the Issuer to an entity which is a successor to the Issuer permitted under the Indenture,
in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the
Issuer is bound hereunder or (y) the collateral assignment to the Trustee as contemplated by the granting clause of the Indenture.
The Issuer shall simultaneously assign its rights, title and interest in (but not its obligations under) this Agreement to the
Trustee pursuant to the Indenture; and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment.
Upon assignment by the Issuer, the Issuer shall use reasonable efforts to cause such assignee to execute and deliver to the Collateral
Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment.

 

(d)              
The Issuer shall provide (or cause the Trustee to provide) S&P and the Holders with notice of any assignment pursuant
to this Section 13.

 

Section 14.           
Removal for Cause.

 

(a)               
The Collateral Manager may be removed for Cause upon 10 Business Days’ prior written notice by the Issuer or the Trustee
(“Termination Notice”) at the direction of a Majority of the Controlling Class (excluding all Collateral Manager
Notes) (or, if all of the Notes of the Controlling Class are Collateral Manager Notes, a Majority of the most senior Class of Notes
that is not comprised entirely of Collateral Manager Notes) or a Majority of the Subordinated Notes (excluding all Collateral Manager
Notes). Simultaneous with its direction to the Issuer to remove the Collateral Manager for Cause, such Majority of the Controlling
Class or of the Subordinated Notes, as applicable, shall give to the Issuer and the Trustee a written statement setting forth the
reason for such removal (“Statement of Cause”). The Trustee (at the direction of the Issuer) shall distribute
a copy of the Termination Notice and the Statement of Cause to the Holders within two (2) Business Days of receipt. No such removal
shall be effective (A) until the date as of which a successor Collateral Manager shall have been appointed in accordance with Sections
12(d) and (e) and delivered an Instrument of Acceptance to the Issuer and the successor Collateral Manager has effectively
assumed all of the Collateral Manager’s duties and obligations and (B) unless the Statement of Cause has been delivered to
the Issuer and the Trustee as set forth in this Section 14(a). “Cause” means any of the following:

 

    	 	27	 

     

    

(i)                
the Collateral Manager shall willfully and intentionally violate or breach any material provision of this Agreement or the
Indenture applicable to it (not including a willful and intentional breach that results from a good faith dispute regarding reasonable
alternative courses of action or interpretation of instructions or provisions of the relevant Transaction Documents);

 

(ii)              
(A) the Collateral Manager shall breach in any material respect any provision of this Agreement or any terms of the Indenture
or any other Transaction Document applicable to it (other than as covered by clause (i) and it being understood that failure to
meet any Concentration Limitation, Collateral Quality Test or Coverage Test is not a breach for purposes of this clause (ii)),
which breach could reasonably be expected to have a Material Adverse Effect, and shall not cure such breach (if capable of being
cured) within 30 days after the earlier to occur of an Authorized Officer of the Collateral Manager receiving notice or having
actual knowledge of such breach, unless, if such breach is remediable, the Collateral Manager has taken action commencing the cure
thereof within such 30 day period that the Collateral Manager believes in good faith will remedy such breach within 60 days of
the earlier to occur of such Authorized Officer receiving notice or having actual knowledge thereof; or (B) the failure of any
representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement,
the Indenture or any other Transaction Document to be correct in any material respect when made, which failure could reasonably
be expected to have a Material Adverse Effect, and no correction is made for a period of 30 days after the Collateral Manager having
actual knowledge of, or its receipt of written notice of such failure;

 

(iii)            
the Collateral Manager, Garrison Investment Group LP or Garrison Capital Advisers LLC (collectively, the “Garrison
Entities”) is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator,
administrative receiver, trustee or similar officer; or any of the Garrison Entities (A) ceases to be able to, or admits in writing
its inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into
any composition or arrangement with, its creditors generally; (B) applies for or consents (by admission of material allegations
of a petition or otherwise) to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other
similar official) of any of the Garrison Entities or of any substantial part of its properties or assets in connection with any
winding up, liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law, or authorizes
such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application
against any of the Garrison Entities and continue undismissed for 60 days; (C) authorizes or files a voluntary petition in bankruptcy,
or applies for or consents (by admission of material allegations of a petition or otherwise) to the application of any bankruptcy,
reorganization, arrangement, readjustment of debt, insolvency, dissolution, or similar law, or authorizes such application or consent,
or proceedings to such end are instituted against any of the Garrison Entities without such authorization, application or consent
and are approved as properly instituted and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency
or the issuance of an order for relief; or (D) permits or suffers all or any substantial part of its properties or assets to be
sequestered or attached by court order and the order (if contested in good faith) remains undismissed for 60 days;

 

    	 	28	 

     

    

(iv)            
the occurrence and continuation of an Event of Default pursuant to Section 5.1(a) of the Indenture that primarily results
from any willful and material breach by the Collateral Manager of its duties under this Agreement or under the Indenture which
breach or default is not cured within any applicable cure period;

 

(v)              
(A) the occurrence of an act by any of the Garrison Entities that constitutes fraud or criminal activity in the performance
of its obligations under this Agreement or any advisory agreement, staffing agreement or similar agreement that is entered into
for the benefit of the Collateral Manager or the Issuer (as determined pursuant to a final adjudication by a court of competent
jurisdiction) or any of the Garrison Entities being indicted or convicted of a criminal offense materially related to its primary
business of providing asset management services, or (B) any officer of any of the Garrison Entities primarily responsible for the
performance by the Collateral Manager of its obligations under this Agreement (in the performance of his or her investment management
duties) is indicted or convicted of a criminal offense materially related to the business of the Collateral Manager providing asset
management services and continues to have responsibility for the performance by the Collateral Manager under this Agreement for
a period of ten days after such indictment or conviction;

 

(vi)            
the Collateral Manager consolidates with or merges into any other corporation, partnership, trust or other entity if the
survivor of such transaction (A) fails to expressly assume the obligations of the Collateral Manager under this Agreement and the
other Transaction Documents and such failure is not corrected by the surviving entity within 30 days or (B) the transaction fails
to comply with the provisions of Section 13 and such failure is not corrected by the surviving entity within 30 days; or

 

(vii)          
the inability of the Collateral Manager to perform its duties hereunder and under the Indenture due to termination of, non-performance
under, or any other reason relating to any advisory agreement, staffing agreement or other similar agreement that is entered into
with any of the Garrison Entities for the benefit of the Collateral Manager or the Issuer and such inability continues for more
than 30 days.

 

    	 	29	 

     

    

(b)              
If any of the events specified in this Section 14 shall occur, the Collateral Manager shall give written notice thereof
within three (3) Business Days to the Issuer, the Trustee and S&P; provided that if any of the events specified in Section
14(a)(iii) shall occur, the Collateral Manager shall give written notice thereof within one (1) Business Day to the Issuer,
the Trustee, and S&P following the Collateral Manager’s becoming aware of the occurrence of such event. A Majority of
the Controlling Class and a Majority of the Subordinated Notes, voting separately by Class, may waive any event described in Section
14 (other than any of the events specified in Section 14(a)(iii)) as a basis for termination of this Agreement and removal
of the Collateral Manager under this Section 14.

 

(c)               
If the Collateral Manager is removed pursuant to this Section 14, the Issuer shall have, in addition to the rights
and remedies set forth in this Agreement, all of the rights and remedies available with respect thereto at law or equity.

 

(d)              
Notwithstanding any other provision of this Agreement to the contrary, Collateral Manager Notes shall have no voting rights
and shall be deemed not to be Outstanding with respect to any vote in connection with (i) a removal of the Collateral Manager for
Cause, (ii) a waiver of an event constituting Cause under this Agreement as a basis for termination of this Agreement or removal
of the Collateral Manager or (iii) the appointment of an Approved Replacement. The Collateral Manager shall provide notice to the
Trustee and the Issuer of any Collateral Manager Notes so held.

 

Section 15.           
Obligations of Resigning or Removed Collateral Manager.

 

(a)               
On, or as soon as practicable after, the date any resignation or removal is effective, the Collateral Manager shall (at
the Issuer’s expense):

 

(i)                
deliver to the Issuer or to such other Person as the Issuer shall instruct all property and documents of the Issuer or otherwise
relating to the Assets then in the custody of the Collateral Manager;

 

(ii)              
deliver to the Trustee an accounting with respect to the books and records delivered to the Trustee or the successor Collateral
Manager appointed pursuant to Section 12; and

 

(iii)            
agree to cooperate with all reasonable requests related to any proceedings, even after its resignation or removal, which
arise in connection with this Agreement or the Indenture, assuming the Collateral Manager has received an indemnity in form reasonably
satisfactory to the Collateral Manager from an entity reasonably satisfactory to the Collateral Manager, and expense reimbursement
reasonably satisfactory to the Collateral Manager.

 

    	 	30	 

     

    

(b)              
Notwithstanding such resignation or removal, the Collateral Manager shall remain liable for its obligations under Section
10 and its acts or omissions giving rise thereto and for any expenses, losses, damages, liabilities, demands, charges and claims
of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising out of a Collateral Manager Breach,
subject to the limitations of liability set forth in Section 10.

 

Section 16.           
Representations and Warranties.

 

(a)               
The Issuer hereby represents and warrants to the Collateral Manager as follows:

 

(i)                
The Issuer has been duly incorporated as an exempted company with limited liability and is validly existing and in good
standing under the laws of the Cayman Islands, has the full power and authority to own its assets and the obligations and securities
proposed to be owned by it and included in the Assets and to transact the business in which it is presently engaged and is duly
qualified under the laws of each jurisdiction where its ownership or lease of property, the conduct of its business or the performance
of this Agreement, the Indenture, the Notes or any other Transaction Document require such qualification, except for those jurisdictions
in which the failure to be so qualified, authorized or licensed would not have a Material Adverse Effect on the Issuer.

 

(ii)              
The Issuer has full power and authority to execute, deliver and perform all of its obligations under this Agreement, the
Indenture, the Notes and any other Transaction Document to which it is a party and has taken all necessary action to authorize
this Agreement and the execution and delivery of this Agreement and the performance of all obligations imposed upon it hereunder,
and, as of the Closing Date, will have taken all necessary action to authorize the Indenture, the Notes and any other Transaction
Document to which it is a party and the execution, delivery and performance of this Agreement, the Indenture, the Notes and any
other Transaction Document to which it is a party and the performance of all obligations imposed upon it hereunder or thereunder.
No consent of any other Person including, without limitation, members and creditors of the Issuer, and no license, permit, approval
or authorization of, exemption by, notice or report to, or registration, filing (other than any filings pursuant to the UCC required
under the Indenture and necessary to perfect any security interest granted thereunder) or declaration with, any governmental authority
is required by the Issuer in connection with the execution, delivery, performance, validity or enforceability of this Agreement,
the Indenture, the Notes or any other Transaction Document to which the Issuer is a party or the obligations imposed upon the Issuer
hereunder and thereunder. This Agreement and all other Transaction Documents to which the Issuer is a party have been, and each
instrument and document to which the Issuer is a party required hereunder or under the Indenture, the Notes or any other Transaction
Document to which the Issuer is a party will be, executed and delivered by an Authorized Officer of the Issuer, and this Agreement
or any other Transaction Document to which the Issuer is a party constitute, and each instrument or document required hereunder
to which the Issuer is a party, when executed and delivered hereunder or thereunder, will constitute, the legally valid and binding
obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject, as to enforcement, (A) to the effect
of bankruptcy, receivership, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights
as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the
Issuer and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law
or in equity).

 

    	 	31	 

     

    

(iii)            
The execution, delivery and performance of this Agreement, any other Transaction Document to which the Issuer is a party
and the documents and instruments required hereunder and thereunder will not violate any provision of any existing law or regulation
binding on the Issuer, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the
Issuer, or the Organizational Instruments of, or any securities issued by, the Issuer or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which the Issuer is a party or by which the Issuer or any of its assets may be
bound, the violation of which would have a Material Adverse Effect on the Issuer, and will not result in or require the creation
or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking (other than the lien of the Indenture).

 

(iv)            
The Issuer is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract
or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule,
regulation or order of any court, government agency or body having jurisdiction over the Issuer or its properties, the breach or
violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement,
the provisions of the Indenture or any other Transaction Document applicable to the Issuer, or the performance by the Issuer of
its duties hereunder or thereunder.

 

(v)              
There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the best knowledge of
the Issuer, threatened that, if determined adversely to the Issuer, would have a material adverse effect upon the performance by
the Issuer of its duties under, or on the validity or enforceability of, this Agreement, the Indenture or any other Transaction
Document applicable to the Issuer.

 

(vi)            
The Issuer has not engaged in any transaction that would result in the violation of, or require registration as an “investment
company” under, the Investment Company Act.

 

(vii)          
The Issuer agrees for the benefit of the Collateral Manager on behalf of the Secured Parties to follow the lawful instructions
and directions of the Collateral Manager in connection with the Collateral Manager’s services hereunder.

 

(viii)        
Neither the Issuer nor the pool of Assets is required to register as an “investment company” under the Investment
Company Act.

 

(ix)            
The Issuer has taken and will take all reasonable and practicable steps to ensure that the assets of the Issuer do not and
will not at any time constitute the assets of any plan subject to the fiduciary responsibility provisions of Title I of ERISA or
of any plan subject to Section 4975 of the Code.

 

    	 	32	 

     

    

(x)              
The Issuer has taken and will take all reasonable and practicable steps to ensure that it does not accept funds, directly
or indirectly, from a Person whose name appears on the List of Specially Designated Nationals and Blocked Persons maintained by
the U.S. Office of Foreign Asset Control and such other lists of prohibited persons and entities as may be mandated by applicable
law or regulation.

 

(b)              
The Collateral Manager hereby represents and warrants to the Issuer, as of the date hereof, as follows:

 

(i)                
The Collateral Manager is a corporation duly incorporated and validly existing and in good standing under the laws of the
State of Delaware, has full power and authority to own its assets and to transact the business in which it is currently engaged,
and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the performance of this
Agreement and any other Transaction Document to which it is a party would require such qualification, except for those jurisdictions
in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the ability of the
Collateral Manager to perform its obligations under this Agreement, the provisions of the Indenture and any other Transaction Document
applicable to the Collateral Manager, or on the validity or enforceability of this Agreement, the provisions of the Indenture and
any other Transaction Document applicable to the Collateral Manager.

 

(ii)              
The Collateral Manager has full power and authority to execute and deliver this Agreement and any other Transaction Document
to which it is a party and to perform all of its obligations hereunder and under the provisions of the Indenture and such other
Transaction Documents applicable to the Collateral Manager, and has taken all necessary action to authorize this Agreement and
any other Transaction Document to which it is a party on the terms and conditions hereof and thereof and the execution and delivery
of this Agreement and any other Transaction Document to which it is a party and the performance of all obligations required hereunder
and thereunder applicable to the Collateral Manager. No consent of any other Person, including, without limitation, members and
creditors of the Collateral Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required by the Collateral Manager in connection with this
Agreement or any other Transaction Document applicable to it or the execution, delivery, performance, validity or enforceability
of this Agreement or any Transaction Document applicable to it or the obligations imposed on the Collateral Manager hereunder or
under the terms of the Indenture or any other Transaction Document applicable to the Collateral Manager other than those which
have been obtained or made. No representation is made herein with respect to the requirements of state securities laws or regulations.
This Agreement has been executed and delivered by an Authorized Officer of the Collateral Manager, and this Agreement and any other
Transaction Document to which it is a party constitute the valid and legally binding obligations of the Collateral Manager enforceable
against the Collateral Manager in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency,
winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event
of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Collateral Manager and (B) to general
equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

 

    	 	33	 

     

    

(iii)            
The execution, delivery and performance of this Agreement and the terms of the Indenture and any other Transaction Document
applicable to the Collateral Manager will not violate any provision of any existing law or regulation binding on the Collateral
Manager (except that no representation is made herein with respect to the requirements of state securities laws or regulations),
or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Collateral Manager, or
the Organizational Instruments of, or any securities issued by, the Collateral Manager or of any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which the Collateral Manager is a party or by which the Collateral Manager or
any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets
or financial condition of the Collateral Manager or which would reasonably be expected to adversely affect in a material manner
its ability to perform its obligations hereunder or under the Indenture or any other Transaction Document to which it is a party.

 

(iv)            
There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the actual knowledge
of the Collateral Manager, threatened, that, if determined adversely to the Collateral Manager, would have a material adverse effect
upon the performance by the Collateral Manager of its duties under this Agreement or the provisions of the Indenture and any other
Transaction Document applicable to the Collateral Manager.

 

(v)              
Any information contained in the sections entitled “Summary of Terms—Collateral Manager,” “Risk
factors—Relating to Certain Conflicts of Interest—Relating to the Collateral Manager and its Affiliates” and
“The Collateral Manager” in the Final Offering Circular, as thereafter amended or supplemented, as of the date of the
Final Offering Circular, the Closing Date or as of the date of any such amendment or supplement, as applicable (provided
that the Collateral Manager has consented to such amendment or supplement) (collectively, the “Collateral Manager Information”)
does not and, as of such dates, will not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(vi)            
The Collateral Manager is not required to register as an investment adviser with the SEC.

 

(vii)          
The Origination Requirement is satisfied.

 

(c)               
The Collateral Manager makes no representation, express or implied, with respect to the Issuer or any disclosure with respect
to the Issuer.

 

    	 	34	 

     

    

Section 17.           
Limited Recourse; No Petition.

 

The Collateral Manager hereby agrees that it
shall not institute against, or join any other Person in instituting against the Issuer any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other proceedings under United States federal or state or other bankruptcy
or similar laws until at least one year (or, if longer, the applicable preference period then in effect) plus one day after payment
in full of all Notes issued under the Indenture; provided that nothing in this Section 17 shall preclude the Collateral
Manager from (A) taking any action prior to the expiration of such applicable preference period in (x) any case or proceeding voluntarily
filed or commenced by the Issuer or (y) any insolvency proceeding filed or commenced against the Issuer by any Person other than
the Collateral Manager or any Affiliate or (B) commencing against the Issuer or any properties of the Issuer any legal action that
is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding. The Collateral Manager hereby
acknowledges and agrees that the Issuer’s obligations hereunder will be solely the corporate obligations of the Issuer, and
that the Collateral Manager will not have any recourse to any of the members, managers, directors, officers, employees, or Affiliates
of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any
Transactions contemplated hereby. Notwithstanding any other provisions hereof or of any other Transaction Document, recourse in
respect of any obligations of the Issuer to the Collateral Manager hereunder or thereunder will be limited to the Assets as applied
in accordance with the Priority of Payments pursuant to the Indenture and, on the exhaustion of the Assets, all claims against
the Issuer arising from this Agreement or any Transaction Document or any Transactions contemplated hereby or thereby shall be
extinguished and shall not revive. This Section 17 shall survive the termination of this Agreement for any reason whatsoever.

 

Section 18.           
Notices.

 

Unless expressly provided otherwise herein,
all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall
be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of registered or certified
mail, postage prepaid, return receipt requested, or, in the case of telecopier notice, when received in legible form, addressed
as set forth below:

 

(a)          
If to the Issuer:

 

Garrison Funding 2016-2 Ltd.

c/o MaplesFS Limited

P.O. Box 1093, Boundary Hall

Cricket Square, George Town

Grand Cayman, KY1-1102, Cayman Islands

Telephone No.: (345) 945-7099

Telecopier No.: (345) 945-7100

Attention: The Directors

 

    	 	35	 

     

    

(b)          
If to the Collateral Manager:

 

Garrison Capital Inc.

1290 Avenue of the Americas, Suite 914

New York, New York 10104

Telephone No.: (212) 372-9526

Telecopier No.: (212) 372-9525

Attention: Sujit Sahadevan

 

with a copy to:

 

Dechert LLP

100 North Tryon Street

Suite 4000

Charlotte, NC 28202

Telephone No.: (704) 339-3100

Telecopier No.: (704) 339-3101

Attention: John Timperio

 

(c)          
If to the Trustee or the Registrar:

 

Deutsche Bank Trust Company Americas

1761 East St. Andrew Place

Santa Ana, CA 92705

Telephone No.: (714) 247-6000

Telecopier No.: (714) 656-2568

Attention: Structured Credit Services – Garrison Funding 2016-2

 

(d)           If
to the Holders:

 

At their respective addresses maintained in
the Register or otherwise maintained by the Trustee pursuant to the Indenture.

 

Any party may change the address or telecopy
number to which communications or copies directed to such party are to be sent by giving notice to the other parties of such change
of address or telecopy number in conformity with the provisions of this Section 18 for the giving of notice.

 

Section 19.           
Binding Nature of Agreement; Successors and Assigns.

 

This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and permitted assigns as provided herein.

 

    	 	36	 

     

    

Section 20.           
Entire Agreement; Amendment.

 

This Agreement, the Indenture, the Sub-Collateral
Management Agreement and the Collateral Administration Agreement contain the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof and thereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified, supplemented or amended other than by an agreement in writing executed by the
parties hereto and (other than in respect of a modification or amendment of the type that may be made to the Indenture without
consent of any Holders of Secured Notes or Subordinated Notes (it being understood that any proposed modification or amendment
to this Agreement of the type that may be made pursuant to Section 8.1 of the Indenture shall be subject to the corresponding notice
and Noteholder objection provisions, if any, set forth in Section 8.1 of the Indenture)), with the written consent of (A) (i) a
Majority of each Class of Notes entitled to vote or (ii) the percentage sufficient to meet the Holder of Notes requirements for
such modification, supplement or amendment if it were made to the Indenture, whichever is greater (it being understood that any
proposed modification or amendment to this Agreement of the type that may be made pursuant to Sections 8.1 and 8.2 of the Indenture
shall be subject to the corresponding notice and Noteholder objection provisions, if any, set forth in Sections 8.1 and 8.2 of
the Indenture), and (B) a Majority of the Subordinated Notes. Any amendment to this Agreement that is not solely to cure an ambiguity
or inconsistency or of a formal, minor or technical nature shall be subject to the satisfaction of the Rating Agency Condition
in respect thereto.

 

Section 21.           
Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK INCLUDING NEW YORK GENERAL OBLIGATIONS LAW §§ 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT REGARD
TO THE PRINCIPLES THEREOF GOVERNING CONFLICTS OF LAW.

 

Section 22.           
Submission to Jurisdiction.

 

With respect to any suit, action or proceedings
relating to this Agreement or any matter between the parties arising under or in connection with this Agreement (“Proceedings”),
each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in
the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from
any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any
such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes
any of the parties from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

 

    	 	37	 

     

    

Each of the Collateral Manager and the Issuer
irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of
such process to it at the office to which notices are sent to it.

 

Section 23.           
Waiver of Jury Trial.

 

EACH PARTY TO THIS AGREEMENT HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.

 

Section 24.           
Conflict with the Indenture.

 

Except as set forth in Section 2(f),
in respect of any conflict between the terms of this Agreement and the Indenture or actions required under the terms of the Indenture
and the terms of this Agreement, the terms of the Indenture shall control.

 

Section 25.           
Subordination; Assignment of Agreement.

 

The Collateral Manager agrees that the payment
of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral
Manager agrees to be bound by the provisions of, Article XI of the Indenture as if the Collateral Manager were a party to the Indenture
and hereby consents to the assignment of this Agreement as provided in Article XV of the Indenture.

 

Section 26.           
Indulgences Not Waivers.

 

Neither the failure nor any delay on the part
of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same
or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver
shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

Section 27.           
Costs and Expenses.

 

The costs and expenses (including the fees and
disbursements of counsel and accountants) of the Collateral Manager and of the Issuer incurred in connection with the negotiation
and preparation of and the execution of this Agreement, and all matters incidental thereto, shall be paid by the Collateral Manager
or an Affiliate thereof. The Issuer will reimburse the Collateral Manager for expenses including fees and out-of-pocket expenses
reasonably incurred by the Collateral Manager in connection with services provided after the Closing Date under this Agreement
with respect to (a) legal advisers, consultants, rating agencies, accountants, brokers and other professionals retained by the
Issuer or the Collateral Manager (on behalf of the Issuer), (b) asset pricing and asset rating services, compliance services and
software, and accounting, programming and data entry services directly related to the management of the Assets, (c) all Taxes,
regulatory and governmental charges (not based on the income of the Collateral Manager), insurance premiums or expenses (d) any
and all costs and expenses incurred in connection with the acquisition, disposition of investments on behalf of the Issuer (whether
or not actually consummated) and management thereof, including attorneys’ fees and disbursements, (e) any fees, expenses
or other amounts payable to S&P, (f) any extraordinary costs and expenses incurred by the Collateral Manager in the performance
of its obligations under this Agreement and the Indenture, (g) any expenses related to compliance with Rule 17g-5 under the Exchange
Act and (h) as otherwise agreed upon by the parties. The Issuer shall be obligated to pay all reasonable costs and disbursements
in connection with the perfection and the maintenance of perfection, as against all third parties, of the Issuer’s and Trustee’s
respective right, title and interest in and to the Assets (including, without limitation, the security interests provided for in
the Indenture). The fees and expenses payable by the Issuer to the Collateral Manager in accordance with this Section 27
shall be paid on any Payment Date as Administrative Expenses in accordance with, and subject to the limitations contained in, the
Priority of Payments and shall be subject to the availability of funds thereunder.

 

    	 	38	 

     

    

Section 28.           
Third Party Beneficiary.

 

The parties hereto agree that the Trustee on
behalf of the Secured Parties shall be a third party beneficiary of this Agreement and shall be entitled to rely upon and enforce
such provisions of this Agreement (other than Section 20) to the same extent as if each of them were a party hereto. For the avoidance
of doubt, amendments to this Agreement may be entered into without the consent of the Trustee.

 

Section 29.           
Titles Not to Affect Interpretation.

 

The titles of paragraphs and subparagraphs contained
in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction
or interpretation hereof.

 

Section 30.           
Execution in Counterparts.

 

This Agreement may be executed in any number
of counterparts by telegraphic or other written form of communication, each of which shall be deemed to be an original as against
any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of
the parties reflected hereon as the signatories.

 

Section 31.           
Provisions Separable.

 

The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

 

    	 	39	 

     

    

Section 32.           
Gender.

 

Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires.

 

Section 33.Communications with Rating Agencies.

 

The Collateral Manager shall, on behalf of the
Issuer, take all steps required for the Issuer to comply with its obligations under the Indenture and under rating application
letters and any related side letters, in each case in respect of Rule 17g-5 under the Exchange Act.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	40	 

     

    

 

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

 

	 	GARRISON FUNDING 2016-2 LTD.,
	 	as Issuer	 
	 	 	 	 
	 	By	/s/ Carrie Bunton	 
	 	Name:	Carrie Bunton	 
	 	Title:	Director	 
	 	 	 	 
	 	 	 	 
	 	GARRISON CAPITAL INC., as Collateral Manager
	 	 	 	 
	 	By	/s/ Michael Butler	 
	 	Name:	Michael Butler	 
	 	Title:	Secretary	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	41	 

     

    

SCHEDULE I

 

Investment Procedures:

 

For so long as Garrison Capital Inc. is the
Collateral Manager, all decisions regarding the acquisition of Collateral Obligations and the formulation of portfolio management
parameters will require the consent of representatives of an investment committee (the “Investment Committee”)
of Garrison Capital Inc. as set forth herein. The Investment Committee will be responsible for, inter alia, (1) formulating
portfolio management parameters for the Issuer (including as to acquisition and disposition of Assets) for purposes of the Indenture
and the other Transaction Documents and (2) credit review of all Collateral Obligations proposed to be acquired by the Issuer.
If the Investment Committee approves the acquisition of a Collateral Obligation, the Collateral Manager may (but need not) acquire
such Collateral Obligation on behalf of the Issuer at such time as it deems appropriate. No Collateral Obligation may be acquired
or committed to be acquired by the Issuer (or the Collateral Manager on its behalf) without approval from the Investment Committee.

 

The Investment Committee shall communicate and
meet (including telephonically or using other electronic means) as needed in connection with reviewing Collateral Obligations proposed
to be acquired by the Issuer. The members of the Investment Committee taking part in any such communication or meeting will be
entitled under the Collateral Management Agreement to indemnification by the Issuer under certain circumstances.

 

The Investment Committee need not approve the
disposition of any Collateral Obligation of the Issuer directed by the Collateral Manager in accordance with the Indenture and
the other Transaction Documents or, except as expressly provided in the second preceding paragraph, the taking of any other action
by the Collateral Manager or the Issuer. The Investment Committee may provide to the Collateral Manager input on Collateral Obligation
dispositions or any other investment-related issue of the Issuer.

 

 

 

 

 

 

 

 

 

 

Sch. I-1Execution Version

Exhibit 10.4

 

Sub-collateral
management AGREEMENT

 

BETWEEN

 

Garrison
Capital Inc.

 

AND

 

Garrison
capital AdviserS LLC

 

This Agreement made this
29th day of September, 2016 (this “Agreement”), by and between Garrison Capital Inc., a Delaware
corporation (the “Collateral Manager”), and Garrison Capital Advisers LLC, a Delaware limited liability company
(the “Sub-Collateral Manager”).

 

WHEREAS, the Notes (as
defined in the Indenture) will be issued pursuant to an Indenture dated as of the date hereof (the “Indenture”),
among Garrison Funding 2016-2 Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands
(the “Issuer”), Garrison Funding 2016-2 LLC, a limited liability company formed under the laws of the State
of Delaware, as co-issuer (the “Co-Issuer”), and Deutsche Bank Trust Company Americas, as trustee (together
with any successor trustee permitted under the Indenture, the “Trustee”);

 

WHEREAS, in connection
with the transactions contemplated by the Indenture, the Collateral Manager has entered into that certain Collateral Management
Agreement, dated as of the date hereof, by and between the Collateral Manager, as collateral manager, and the Issuer, as amended
or supplemented from time to time (the “Collateral Management Agreement”);

 

WHEREAS, pursuant to
Section 2(e) of the Collateral Management Agreement, the Collateral Manager is permitted to delegate certain of its obligations
and duties under the Collateral Management Agreement to the Sub-Collateral Manager, all on the terms and conditions set forth therein;

 

WHEREAS, the Collateral
Manager desires to retain the Sub-Collateral Manager to furnish collateral management sub-advisory services to the Collateral Manager
on the terms and subject to the conditions hereinafter set forth, and the Sub-Collateral Manager wishes to be retained to provide
such services; and

 

WHEREAS, the Sub-Collateral
Manager believes that it will benefit from the transactions contemplated by the Indenture;

 

NOW, THEREFORE, in consideration
of the premises and for other good and valuable consideration, the parties hereby agree as follows:

 

1.                 
Defined Terms. Capitalized terms used herein that are not otherwise defined herein shall have the respective meanings
ascribed thereto in the Indenture.

 

    

     

    

2.                 
Duties of the Sub-Collateral Manager.

 

(a)               
The Collateral Manager hereby engages the Sub-Collateral Manager to advise the Collateral Manager in connection with its
management, administration and servicing of the Collateral Obligations belonging to the Issuer, and the Sub-Collateral Manager
hereby accepts such engagement, in each case, upon the terms and subject to the conditions set forth herein. In furtherance of
the foregoing, the Sub-Collateral Manager shall use its commercially reasonable efforts to assist the Collateral Manager in the
performance of the Collateral Manager’s duties and obligations pursuant to the Collateral Management Agreement and the other
Transaction Documents.

 

(b)              
The Sub-Collateral Manager shall for all purposes herein provided be deemed to be an independent contractor and, except
as expressly provided or authorized herein, shall have no authority to act for or represent the Collateral Manager in any way or
otherwise be deemed to be an agent of the Collateral Manager.

 

(c)The Sub-Collateral
Manager shall in rendering its services as Sub-Collateral Manager use a degree of skill and attention no less than that which (i)
would be exercised by a prudent institutional portfolio manager in connection with the servicing and administration of similar
assets under similar circumstances and (ii) the Sub-Collateral Manager exercises with respect to comparable assets that it manages
for itself and for others having similar investment objectives and restrictions in accordance with its existing practices and procedures
relating to assets of the nature and character of the Collateral Obligations, except as expressly provided otherwise in this Agreement,
the Collateral Management Agreement or the Indenture.  The Sub-Collateral Manager shall not be bound to follow any amendment
to any Transaction Document that affects its duties, responsibilities, obligations or rights, unless the Sub-Collateral Manager
has consented in writing thereto. The Sub-Collateral Manager shall cause any purchase or sale of any Collateral Obligation or other
Asset of the Issuer to be conducted on terms and conditions negotiated on an arm’s length basis or on terms and conditions
that would be obtained in an arm’s length transaction in compliance with Section 3 and Section 5 of the Collateral
Management Agreement.

 

3.                 
Compensation.

 

(a)               
The Sub-Collateral Manager hereby acknowledges that it will receive a valuable benefit from its entry into this Agreement,
notwithstanding that no fees shall be payable to the Sub-Collateral Manager for the performance of its obligations under this Agreement.

 

(b)              
All investment professionals of the Sub-Collateral Manager and/or its Affiliates, when and to the extent engaged in providing
collateral management sub-advisory services hereunder, and the compensation and routine overhead expenses of such personnel allocable
to such services, shall be provided and paid for by the Sub-Collateral Manager and not by the Collateral Manager.

 

4.                 
Covenants.

 

(a)               
Each of the parties hereto shall comply in all material respects with all applicable material laws, ordinances, rules, regulations,
and requirements of governmental authorities except where the necessity of compliance therewith is contested in good faith by appropriate
proceedings.

 

    2 

     

    

(b)              
The Sub-Collateral Manager shall remain qualified to do business and in good standing (as applicable) in every jurisdiction
in which the nature of its businesses so requires, except where the failure to be so qualified and in good standing could reasonably
be expected to have a material adverse effect on its ability to perform collateral management sub-advisory services hereunder.

 

(c)               
The Sub-Collateral Manager will use “Shared Employees” (as defined in the Staffing Agreement) to the extent
it deems necessary or advisable in the exercise of its duties hereunder and it acknowledges that the Collateral Manager is an “Adviser
Client” pursuant to the terms of, and as defined in, the Staffing Agreement.

 

5.                 
Representations and Warranties. (a) The Sub-Collateral Manager represents and warrants to the Collateral Manager
as of the Closing Date as follows:

 

		(i)	The Sub-Collateral Manager has been duly organized and is validly existing under the laws of Delaware,
has the full power and authority to own its assets and to transact the business in which it is presently engaged and is duly qualified
under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires, or the performance
of its duties under this Agreement would require, such qualification, except for failures to be so qualified, authorized or licensed
would have a material adverse effect on its ability to perform its duties hereunder.

 

		(ii)	The Sub-Collateral Manager has full limited liability company power and authority to execute, deliver
and perform its duties under this Agreement.

 

		(iii)	There is not pending or, to the Sub-Collateral Manager’s knowledge, threatened, any action,
suit or proceeding before or by any court or other governmental or self-regulatory authority to which the Sub-Collateral Manager
is a party which might reasonably be expected to result in any material adverse effect on its ability to perform its duties hereunder.

 

		(iv)	This Agreement has been duly authorized, executed and delivered by it and constitutes its valid
and binding obligation, enforceable in accordance with its terms except that the enforceability thereof may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect relating
to creditors’ rights and (B) general principles of equity (regardless of whether such enforcement is considered in a
Proceeding in equity or at law).

 

		(v)	No consent, approval, authorization or order of or declaration or filing with any government, governmental
instrumentality or court or other person is required for the performance by the Sub-Collateral Manager of its duties hereunder,
except such as have been duly made or obtained.

    3 

     

    

		(vi)	Neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts
with or results in a breach or violation of any of the material terms or provisions of or constitutes a material default under
(A) the Sub-Collateral Manager’s certificate of formation, limited liability company agreement or other constituent
documents, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, agreement or other evidence of
indebtedness or other agreement, obligation, condition, covenant or instrument to which the Sub-Collateral Manager is a party or
is bound, (C) any statute applicable to the Sub-Collateral Manager, or (D) any law, decree, order, rule or regulation
applicable to the Sub-Collateral Manager of any court or regulatory, administrative or governmental agency, body or authority or
arbitrator having or asserting jurisdiction over the Sub-Collateral Manager or its properties, and which would have, in the case
of clause (B), (C) or (D) of this paragraph (vi), a material adverse effect upon the performance by the Sub-Collateral Manager
of its duties under this Agreement.

 

		(vii)	The Sub-Collateral Manager is, in all material respects, in compliance with all applicable material
laws, ordinances, rules, regulations, and requirements of governmental authorities except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings.

 

		(viii)	The Sub-Collateral Manager is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended.

 

		(ix)	The Sub-Collateral Manager acknowledges receipt of, and has read and is familiar with the provisions
of, each of the documents delivered by the Collateral Manager to the Sub-Collateral Manager pursuant to Section 5(b)(viii)
hereof.

 

		(b)	The Collateral Manager represents and warrants to the Sub-Collateral Manager as of the Closing Date as follows:

 

		(i)	The Collateral Manager is a corporation duly incorporated and validly existing under the laws of
the State of Delaware, has the full power and authority to own its assets and to transact the business in which it is presently
engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property or the conduct of its
business requires, or the performance of its duties under this Agreement would require, such qualification, except for failures
to be so qualified, authorized or licensed would have a material adverse effect on its ability to perform its duties under this
Agreement, the Collateral Management Agreement or the Indenture.

    4 

     

    

		(ii)	The Collateral Manager has full power and authority to execute, deliver and perform its duties
under this Agreement, the Collateral Management Agreement and the Indenture.

 

		(iii)	There is not pending or, to the Collateral Manager’s knowledge, threatened, any action, suit
or proceeding before or by any court or other governmental or self-regulatory authority to which the Collateral Manager is a party
which might reasonably be expected to result in any material adverse effect on its ability to perform its duties under this Agreement,
the Collateral Management Agreement or the Indenture.

 

		(iv)	This Agreement has been duly authorized, executed and delivered by it and constitutes its valid
and binding obligation, enforceable in accordance with its terms except that the enforceability thereof may be subject to (A) bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect relating
to creditors’ rights and (B) general principles of equity (regardless of whether such enforcement is considered in a
Proceeding in equity or at law).

 

		(v)	No consent, approval, authorization or order of or declaration or filing with any government, governmental
instrumentality or court or other person is required for the performance by the Collateral Manager of its duties hereunder, except
such as have been duly made or obtained.

 

		(vi)	Neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts
with or results in a breach or violation of any of the material terms or provisions of or constitutes a material default under
(A) the Collateral Manager’s Organizational Instruments (as defined in the Collateral Management Agreement) or other
constituent documents, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, agreement or other
evidence of indebtedness or other agreement, obligation, condition, covenant or instrument to which the Collateral Manager is a
party or is bound, (C) any statute applicable to the Collateral Manager, or (D) any law, decree, order, rule or regulation
applicable to the Collateral Manager of any court or regulatory, administrative or governmental agency, body or authority or arbitrator
having or asserting jurisdiction over the Collateral Manager or its properties, and which would have, in the case of clause (C)
or (D) of this paragraph (vi), would have a material adverse effect upon the performance by the Collateral Manager of its duties
under this Agreement.

 

		(vii)	The Collateral Manager is, in all material respects, in compliance with all applicable material
laws, ordinances, rules, regulations, and requirements of governmental authorities except where the necessity of compliance therewith
is contested in good faith by appropriate proceedings.

    5 

     

    

		(viii)	The Collateral Manager has heretofore delivered to the Sub-Collateral Manager true and complete
copies of the Collateral Management Agreement and the Indenture.

 

		(ix)	In accordance with the terms of the Collateral Management Agreement, the delegation of the Collateral
Manager’s obligations and duties hereunder shall not relieve it from any liability under the Collateral Management Agreement.

 

6.                 
Excess Brokerage Commissions. The Sub-Collateral Manager is hereby authorized, to the fullest extent now or hereafter
permitted by law, to cause the Collateral Manager to pay a member of a national securities exchange, broker or dealer an amount
of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker
or dealer would have charged for effecting such transaction, if the Sub-Collateral Manager determines in good faith, taking into
account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution,
and operational facilities of the firm and the firm’s risk and skill in positioning blocks of securities, that such commission
amount is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer,
viewed in each case in terms of the particular transaction and the Sub-Collateral Manager’s overall responsibilities with
respect to the Issuer’s portfolio, and that such commission amount constitutes the best net results for the Issuer.

 

7.                 
Limitations on the Employment of the Sub-Collateral Manager.

 

(a)               
The services of the Sub-Collateral Manager to the Collateral Manager are not exclusive, and the Sub-Collateral Manager may
engage in any other business or render similar or different services to others including, without limitation, the direct or indirect
sponsorship or management of other investment-based accounts or commingled pools of capital, however structured, having investment
objectives similar to those of the Issuer, so long as its services to the Collateral Manager hereunder are not impaired thereby.
Moreover, nothing in this Agreement shall limit or restrict the right of any manager, partner, officer or employee of the Sub-Collateral
Manager to engage in any other business or to devote his or her time and attention in part to any other business, whether of a
similar or dissimilar nature to the Issuer, or to receive any fees or compensation in connection therewith.

 

(b)              
So long as this Agreement or any extension, renewal or amendment of this Agreement remains in effect, the Sub-Collateral
Manager shall be the only collateral management sub-collateral manager for the Collateral Manager. The Sub-Collateral Manager assumes
no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors,
officers, employees, members and managers of the Collateral Manager are or may become interested in the Sub-Collateral Manager
and its Affiliates as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Sub-Collateral
Manager and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its Affiliates are
or may become similarly interested in the Collateral Manager as members or otherwise.

 

    6 

     

    

8.                 
Responsibility of Dual Directors, Officers and/or Employees. If any person who is a director, manager, partner, member,
officer or employee of the Sub-Collateral Manager is or becomes a director, manager, member, officer and/or employee of the Collateral
Manager and acts as such in any business of the Collateral Manager, then such director, manager, partner, officer and/or employee
of the Sub-Collateral Manager shall be deemed to be acting in such capacity solely for the Collateral Manager, and not as a director,
manager, partner, officer or employee of the Sub-Collateral Manager or under the control or direction of the Sub-Collateral Manager,
even if paid by the Sub-Collateral Manager.

 

9.                 
Liability of Sub-Collateral Manager; Indemnification.

 

(a)               
The Sub-Collateral Manager assumes no responsibility under this Agreement other than to render the services called for hereunder
to the Collateral Manager in good faith.  The Sub-Collateral Manager shall not be responsible for any action or inaction of
the Collateral Manager in declining to follow any advice, recommendation, or direction of the Sub-Collateral Manager.  The
Sub-Collateral Manager shall have no liability to the Collateral Manager, the Issuer or any other Person for any act, omission,
error of judgment, mistake of law, or for any claim, loss, liability, damage, judgment, settlement, cost or other expense (including
attorney’s fees and expenses) arising out of or with respect to any investment, or for any other act or omission in the performance
of its obligations hereunder, except for any liability to which it would be subject by reason of willful misfeasance, gross negligence
in performance, or reckless disregard, of its obligations hereunder. The Sub-Collateral Manager shall not be liable for any consequential,
special, punitive, exemplary or treble damages or lost profits hereunder.

 

(b)              
The Collateral Manager shall reimburse, indemnify and hold harmless the directors, managers, members, officers and employees
of the Sub-Collateral Manager and any of its Affiliates from any and all actual and reasonable out-of-pocket expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees and expenses),
as are incurred in investigating, preparing, pursuing or defending any Proceeding or investigation with respect to any pending
or threatened litigation caused by, or arising out of or in connection with, any acts or omissions of the Sub-Collateral Manager,
its directors, managers, members, officers, stockholders, agents and employees made in good faith and in the performance of the
Sub-Collateral Manager’s duties under this Agreement except to the extent resulting from such person’s bad faith, willful
misfeasance, gross negligence or reckless disregard of its duties hereunder.  The Sub-Collateral Manager, its directors, managers,
members, officers, stockholders, agents and employees may consult with counsel and accountants with respect to the affairs of the
Collateral Manager and shall be fully protected and justified, to the extent allowed by law, in acting, or failing to act, if such
action or failure to act is taken or made in good faith and is in accordance with the advice or opinion of such counsel or accountants
if such counsel or accountants were selected with reasonable care.

 

(c)               
The provisions of this Section 9 shall survive the termination of this Agreement for any reason whatsoever.

 

    7 

     

    

10.             
Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the first date
above written. This Agreement shall remain in effect until the earlier of (a) 30 days following the Collateral Manager’s
written notice to the Sub-Collateral Manager terminating this Agreement, (b) the termination of the Collateral Management Agreement
or (c) the effective date of the resignation or removal of the Collateral Manager as “Collateral Manager” under the
Collateral Management Agreement. No assignment of this Agreement shall be made by the Sub-Collateral Manager without the consent
of (i) the Collateral Manager and a Majority of the Subordinated Notes and (ii) for an assignment to any person who is not an Affiliate
of the Collateral Manager, a Majority of the Controlling Class; provided that any assignment to an Affiliate shall comply
with the requirements of Section 13(b) of the Collateral Management Agreement. No assignment of this Agreement shall be made by
the Collateral Manager. The Sub-Collateral Manager shall not delegate its duties or responsibilities under this Agreement without
the consent of (i) the Collateral Manager and a Majority of the Subordinated Notes and (ii) for delegation to any person who is
not an Affiliate of the Collateral Manager, a Majority of the Controlling Class; provided that the Sub-Advisor shall not
be relieved of its duties or responsibilities hereunder in connection with any such delegation.

 

11.             
Inspection of Property, Books and Records; Audits; Etc.

 

(a)               
The Sub-Collateral Manager will keep proper books of record and accounts relating to its services performed hereunder, and,
to the extent such books of record and accounts are different from those prepared by the Collateral Manager pursuant to the terms
of the Collateral Management Agreement, will permit, at the request of the Collateral Manager, representatives of the Issuer, the
Trustee, the Holders and all Independent accountants appointed by the Collateral Manager pursuant to Section 10.12 of the Indenture
(in each case (i) payable by the Issuer as Administrative Expenses pursuant to the Priority of Payments, if such inspection does
not reveal any errors or discrepancies of $50,000 (or more) in the aggregate, (ii) at the expense of the Collateral Manager, if
such inspection reveals errors or discrepancies of $50,000 (or more) in the aggregate, or (iii) at the expense of the Collateral
Manager, during the continuance of an Event of Default) to examine and make abstracts from such books and records and to discuss
its affairs, finances and accounts relating to its duties under this Agreement with its officers, employees (including any “Shared
Employees” (as defined in the Staffing Agreement) who are responsible for the performance of this Agreement) and independent
public accountants, all at commercially reasonable times in a commercially reasonable manner so as to not unduly disrupt the business
of the Sub-Collateral Manager, upon commercially reasonable prior notice (but in any event, not less than five Business Days) to
the Sub-Collateral Manager and as often as may commercially reasonably be desired.

 

(b)              
If requested by the Collateral Manager, the Sub-Collateral Manager shall participate in a meeting with the Collateral Manager
and the Holders of the Class A-1 Notes once during each fiscal year of the Collateral Manager, to be held at a location in New
York City and at a time reasonably determined by the Sub-Collateral Manager; provided that such meeting shall be combined
with any meeting that is held pursuant to Section 6 of the Collateral Management Agreement such that no more than one such meeting
under this Agreement and the Collateral Management Agreement, collectively, shall be held during any fiscal year of the Collateral
Manager.

 

    8 

     

    

12.             
Notices.

 

(a)               
All notices, requests, or consents provided for or permitted to be given under this Agreement shall be in writing, addressed
to the recipient, at the address set forth on the signature page hereof, and shall be given (i) by depositing that writing in the
U.S. mail, postage paid and certified with return receipt requested, (ii) by depositing that writing with a reputable overnight
courier for next-day delivery, (iii) by delivering that writing to the recipient in person or (iv) by delivering that writing to
the recipient by facsimile transmission.

 

(b)              
A notice, request or consent given under this Agreement shall be deemed to have been given, and shall be effective, three
calendar days after mailed if sent by U.S. mail, on the next business day when sent by overnight courier or similar service, when
delivered if delivered in person, and upon receipt of a transmittal confirmation if sent by facsimile transmission. All notices,
requests and consents to be sent to a party must be sent to or made at the address given for that person on the signature page
hereof or at such other address as that person may specify by written notice to the other party.

 

13.             
Entire Agreement; Amendment. This Agreement, the Indenture, the Collateral Management Agreement and the Collateral
Administration Agreement contain the entire agreement and understanding among the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof and thereof control
and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may
be amended only (i) by the mutual written consent of the parties hereto and (ii) in accordance with the same procedures and requirements
for an amendment as set forth in Section 20 of the Collateral Management Agreement.

 

14.             
Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK INCLUDING NEW YORK GENERAL OBLIGATIONS
LAW §§ 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT REGARD TO THE PRINCIPLES THEREOF GOVERNING CONFLICTS OF LAW.

 

15.             
Indulgences Not Waivers. Neither the failure nor any delay on the part of any party hereto to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver
of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing
and is signed by the party asserted to have granted such waiver.

 

16.             
Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision
shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may
be invalid or unenforceable in whole or in part.

 

    9 

     

    

17.             
Titles Not to Affect Interpretation. The titles of paragraphs and subparagraphs contained in this Agreement are for
convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation
hereof.

 

18.             
Execution in Counterparts. This Agreement may be executed in any number of counterparts by telegraphic or other written
form of communication, each of which shall be deemed to be an original as against any party whose signature appears thereon, and
all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

 

19.             
Beneficiaries of this Agreement. The parties hereto agree that the Trustee on behalf of the Secured Parties shall
be a third party beneficiary of this Agreement and shall be entitled to rely upon and enforce such provisions of this Agreement
(other than Section 13) to the same extent as if each of them were a party hereto. For the avoidance of doubt, amendments to this
Agreement may be entered into without the consent of the Trustee.

 

[The remainder of this page intentionally
left blank]

 

    10 

     

    

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

 

 

 

	 	Garrison CApital iNc.
	 	 	 
	 	By:	/s/ Michael Butler
	 	Name:	 Michael Butler
	 	Title:	 Secretary
	 	 	 
	 	Address:	Garrison Capital Inc.
	 	 	1290 Avenue of the Americas
	 	 	Suite 914
	 	 	New York, New York 10104
	 	 	Attn: Sujit Sahadevan
	 	 	 
	 	 	 
	 	Garrison Capital AdviserS LLC
	 	 	 
	 	By: 	/s/ Michael Butler
	 	Name: 	Michael Butler
	 	Title: 	Secretary
	 	 	 
	 	Address:	Garrison Capital Advisers LLC
	 	 	1290 Avenue of the Americas
	 	 	Suite 914
	 	 	New York, New York 10104
	 	 	Attn: Sujit Sahadevan

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