Exhibit 10.15

 

Execution Copy

 

AMENDED AND RESTATED GUARANTEE AGREEMENT

 

AMENDED AND RESTATED GUARANTEE AGREEMENT, dated as of December 20, 2013 (as
amended, restated, supplemented, or otherwise modified from time to time, this
“Guarantee”), made by ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland
corporation (“Guarantor”) having its principal place of business c/o Ares
Management LLC, One North Wacker Drive, 48th Floor, Chicago, IL  60606, in favor
of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
(“Buyer”) and any of its parent, subsidiary or affiliated companies
(collectively, “Beneficiary”).

 

RECITALS

 

Pursuant to that certain Master Repurchase and Securities Contract, dated as of
December 14, 2011 (as amended by (a) Amendment No. 1 (the “First Amendment”) to
Master Repurchase and Securities Contract, dated as of May 22, 2012,
(b) Amendment No. 2 to Master Repurchase and Securities Contract, dated as of
June 27, 2013, and (c) Amendment No. 3 to Master Repurchase and Securities
Contract, dated as of November 8, 2013, the “Original Repurchase Agreement”)
between Wells Fargo Bank, National Association (as “Buyer”) and ACRC Lender W
LLC (“Existing Seller”), as amended and restated by that certain Amended and
Restated Master Repurchase and Securities Contract among Buyer, Existing Seller
and ACRC Lender W TRS LLC (“New Seller” and together with Existing Seller,
individually or collectively as the context may require, “Seller”) dated
December 20, 2013 (as further amended, restated, supplemented or otherwise
modified from time to time, the “Repurchase Agreement”), Seller agreed to sell,
from time to time, to Buyer certain Whole Loans, Senior Interests and Mezzanine
Loans, each as defined in the Repurchase Agreement (collectively, the “Purchased
Assets”), upon the terms and subject to the conditions as set forth therein.

 

Pursuant to the terms of that certain Amended and Restated Custodial Agreement,
dated as of December 20, 2013 (as amended, restated, supplemented or otherwise
modified from time to time, the “Custodial Agreement”), by and between Wells
Fargo Bank, National Association (“Custodian”), Buyer, Existing Seller and New
Seller, Custodian is required to take possession of the Purchased Assets, along
with certain other documents specified in the Custodial Agreement, as Custodian
of Buyer and any future purchaser, on several delivery dates, in accordance with
the terms and conditions of the Custodial Agreement.  The Repurchase Agreement,
the Custodial Agreement, this Guarantee and any other agreements executed in
connection with the Repurchase Agreement and the Custodial Agreement shall be
referred to herein as the “Repurchase Documents”.

 

In connection with the execution and delivery by the parties thereto of the
Original Repurchase Agreement, ACRC Holdings LLC, a Delaware limited liability
company, (“Original Guarantor”) executed and delivered to Buyer a Guarantee
Agreement dated as of December 14, 2011 (the “Original Guarantee”).  As a
condition precedent to the Buyer’s entering into the First Amendment,
(i) Beneficiary released all claims against Original Guarantor under the
Original Guarantee, and (ii) Guarantor executed that certain Guarantee
Agreement, dated as of May 22, 2012, in favor of Beneficiary, as amended by
(a) Amendment No. 1 to Guarantee

 

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Agreement, dated as of June 29, 2012 and (b) Amendment No. 2 to Guarantee
Agreement, dated as of June 27, 2013 (the “Existing Guarantee”).

 

It is a condition to Buyer’s entering into the Repurchase Agreement and
purchasing the Purchased Assets that Guarantor amend and restate the Existing
Guarantee in its entirety by executing and delivering this Guarantee in favor of
Beneficiary with respect to the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following: (a) all payment obligations owing by any Seller to Buyer under or in
connection with the Repurchase Agreement and any other Repurchase Documents;
(b) any and all extensions, renewals, modifications, amendments or substitutions
of the foregoing; (c) all expenses, including, without limitation, reasonable
attorneys’ fees and disbursements, that are incurred by Buyer in the enforcement
of any of the foregoing or any obligation of Guarantor hereunder; (d) any other
obligations of any Seller with respect to Buyer under each of the Repurchase
Documents; and (e) if Interim Servicer is an Affiliate of either Seller or
Guarantor, the timely delivery by Interim Servicer of Income into the Waterfall
Account in accordance with the applicable provisions of the Repurchase Agreement
including, without limitation, Section 5.01 thereof (collectively, the
“Obligations”).

 

NOW, THEREFORE, in consideration of the foregoing premises, to induce Buyer to
enter into the Repurchase Documents and to enter into the transactions
contemplated thereunder, Guarantor hereby agrees with Buyer as follows:

 

1.                                      Defined Terms.  Unless otherwise defined
herein, terms which are defined in the Repurchase Agreement and used herein are
so used as so defined.

 

“Cash or Cash Equivalents”:  All unencumbered cash, together with any and all of
the following, in each case to the extent owned by Guarantor or any of its
Subsidiaries free and clear of all Liens and having a maturity of not greater
than ninety (90) days from the date of issuance thereof: (a) readily marketable
direct obligations of the government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the government of the United States, (b) certificates of
deposit of or time deposits with Buyer or a member of the Federal Reserve System
that issues (or the parent of which issues) commercial paper rated as described
in clause (c) below, is organized under the laws of the United states or any
State thereof and has combined capital and surplus of at least $500,000,000,
(c) commercial paper in an aggregate amount of not more than $50,000,000 per
issuer outstanding at any time, issued by any corporation organized under the
laws of any State of the United States and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P,
(d) repurchase obligations of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than seven days with
respect to securities issued or fully guaranteed or insured by the United States
Government, (e) securities with maturities of ninety (90) days or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A2 by Moody’s, (f) securities with maturities of ninety (90) days or
less from the date of acquisition backed by standby letters of credit issued by
any commercial bank satisfying the requirements of

 

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clause (b) of this definition or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.

 

“Debt Service”:  For any Test Period, the sum of (a) Interest Expense for
Guarantor determined on a consolidated basis for such period, and (b) all
regularly scheduled principal payments made with respect to Indebtedness of
Guarantor and its Subsidiaries during such period, other than (i) any voluntary
or involuntary prepayment or (ii) prepayment occasioned by the repayment of an
underlying asset, or any balloon, bullet, margin or similar principal payment
which repays such Indebtedness in part or in full.

 

“Fixed Charge Coverage Ratio”:  With respect to Guarantor at any time, the
EBITDA (as determined in accordance with GAAP) for the immediately preceding
twelve (12) month period ending on the last date of the applicable Test Period,
divided by the Fixed Charges for the immediately preceding twelve (12) month
period ending on the last date of the applicable Test Period.

 

“Fixed Charges”:  With respect to Guarantor at any time, the sum of (a) Debt
Service, (b) all preferred dividends that Guarantor is required, pursuant to the
terms of the certificate of designation or other similar document governing the
rights of preferred shareholders, to pay and is not permitted to defer,
(c) Capital Lease Obligations paid or accrued during such period, and (d) any
amounts payable under any Ground Lease.

 

“Investment Securities”:  Any of the following, but only to the extent approved
by Buyer in its sole discretion:

 

(a)                                 negotiable debt obligations issued by the
U.S. Treasury Department having a remaining maturity of less than one year;

 

(b)                                 negotiable debt obligations issued by the
U.S. Treasury Department having a remaining maturity of one to ten years; and

 

(c)                                  negotiable debt obligations issued by the
U.S. Treasury Department having a remaining maturity of more than ten years.

 

“Tangible Net Worth”:  With respect to Guarantor at any time, determined on a
consolidated basis, all amounts that would be included under capital or
shareholder’s equity (or any like caption) on the balance sheet of Guarantor,
minus (a) amounts owing to Guarantor from any Affiliate thereof, or from
officers, employees, partners, members, directors, shareholders or other Persons
similarly affiliated with such Person or any Affiliate thereof, (b) intangible
assets, and (c) prepaid taxes and/or expenses, plus deferred origination fees,
net of deferred origination costs, all on or as of such date.  For the sake of
clarity, mortgage servicing rights shall not be deemed to be intangible assets.

 

“Test Period”:  The time period from the first day of each calendar quarter,
through and including the last day of such calendar quarter.

 

“Total Assets”:  With respect to Guarantor and any date, an amount, determined
on a consolidated basis, equal to the aggregate book value of all assets owned
by Guarantor on a

 

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consolidated basis and the proportionate share of assets owned by all
non-consolidated Subsidiaries of Guarantor, less (a) amounts owing to Guarantor
from any Affiliate thereof, or from officers, employees, partners, members,
directors, shareholders or other Persons similarly affiliated with Guarantor or
any Affiliate thereof, (b) intangible assets (other than Interest Rate
Protection Agreements specifically related to the Purchased Assets), and
(c) prepaid taxes and expenses, plus deferred origination fees, net of deferred
origination costs, all on or as of such date.  For the sake of clarity, mortgage
servicing rights shall not be deemed to be intangible assets.

 

“Total Indebtedness”:  With respect to Guarantor and any date, all amounts of
Indebtedness and Non-Recourse Indebtedness of Guarantor, on or as of such date,
determined on a consolidated basis.

 

2.                                      Guarantee.  (a)  Guarantor hereby
unconditionally and irrevocably guarantees to Beneficiary the prompt and
complete payment and performance by each Seller when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

 

(b)                                         Notwithstanding anything herein to
the contrary, but subject to clause (c) below, the maximum liability of
Guarantor hereunder and under the Repurchase Documents shall in no event exceed
the sum of (x) twenty-five percent (25%) of the then-currently unpaid aggregate
Repurchase Price of all Purchased Assets consisting of Core Assets,
(y) one-hundred percent (100%) of the then-currently unpaid aggregate Repurchase
Price of all Purchased Assets consisting of Flex Assets, and (z) one hundred
percent (100%) of all of the Obligations described in clause (e) of the
definition thereof.

 

(c)                                  Notwithstanding the foregoing, the
limitation on recourse liability as set forth in both of clauses (x) and (y) of
subsection (b) above SHALL BECOME NULL AND VOID and shall be of no further force
and effect and the Obligations shall be fully recourse to each Seller and
Guarantor, jointly and severally, upon the occurrence of any of the following:

 

(i)                                       a voluntary bankruptcy or insolvency
proceeding is commenced by either Seller under the U.S. Bankruptcy Code or any
similar federal or state law;

 

(ii)                                    an involuntary bankruptcy or insolvency
proceeding is commenced against Guarantor or either Seller in connection with
which Seller, Guarantor or any Affiliate of any of the foregoing has or have
colluded in any way with the creditors commencing or filing such proceeding; or

 

(iii)                                 fraud or intentional misrepresentation by
Guarantor, either Seller or any other Affiliate of Seller or Guarantor in
connection with the execution and the delivery of this Guarantee, the Repurchase
Agreement, or any of the other Repurchase Documents, or any certificate, report,
financial statement or other instrument or document furnished to Buyer at the
time of the closing of the Repurchase Agreement or during the term of the
Repurchase Agreement.

 

(d)                                 In addition to the foregoing and
notwithstanding the limitation on recourse liability set forth in both of
clauses (x) and (y) of subsection (b) above, Guarantor shall be liable

 

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for any losses, costs, claims, expenses or other liabilities incurred by Buyer
arising out of or attributable to the following items:

 

(i)                                       any material breach of the
separateness covenants set forth in Article 9 of the Repurchase Agreement; and

 

(ii)                                    any material breach of any
representations and warranties by Guarantor contained in any Repurchase Document
and any material breach by Guarantor, either Seller or any of their respective
Affiliates, of any representations and warranties relating to Environmental
Laws, or any indemnity for costs incurred in connection with the violation of
any Environmental Law, the correction of any environmental condition, or the
removal of any Materials of Environmental Concern, in each case in any way
affecting any Seller’s or Guarantor’s properties or any of the Purchased Assets.

 

(e)                                  Nothing herein shall be deemed to be a
waiver of any right which Buyer may have under Section 506(a), 506(b),
1111(b) or any other provision of the U.S. Bankruptcy Code to file a claim for
the full amount of the indebtedness secured by the Repurchase Agreement or to
require that all collateral shall continue to secure all of the indebtedness
owing to the Buyer in accordance with the Repurchase Agreement or any other
Repurchase Documents.

 

(f)                                   Guarantor further agrees to pay any and
all reasonable expenses (including, without limitation, all reasonable fees and
disbursements of counsel) which may be paid or incurred by Beneficiary in
enforcing, or obtaining advice of counsel in respect of, any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, Guarantor under this Guarantee.  This
Guarantee shall remain in full force and effect until the Obligations are
satisfied or paid in full, notwithstanding that from time to time prior thereto
Sellers may be free from any Obligations.

 

(g)                                  No payment or payments made by Seller or
any other Person or received or collected by Beneficiary from Seller or any
other Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in reduction of
or in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of Guarantor hereunder which shall,
notwithstanding any such payment or payments, remain liable for the amount of
the Obligations until the Obligations are paid in full.

 

(h)                                 Guarantor agrees that whenever, at any time,
or from time to time, Guarantor shall make any payment to Beneficiary on account
of Guarantor’s liability hereunder, Guarantor will notify Buyer in writing that
such payment is made under this Guarantee for such purpose.

 

3.                                      Subrogation.  Upon making any payment
hereunder, Guarantor shall be subrogated to the rights of Buyer against Seller
and any collateral for any Obligations with respect to such payment; provided
that Guarantor shall not seek to enforce any right or receive any payment by way
of subrogation until all amounts due and payable by Seller to Buyer under the
Repurchase Documents or any related documents have been paid in full; and
further provided that such subrogation rights shall be subordinate in all
respects to all amounts owing to the Buyer under the Repurchase Documents.

 

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4.                                      Amendments, etc. with Respect to the
Obligations.  Until the Obligations shall have been paid or performed in full,
and subject to the provisions of Section 11 of this Guarantee, Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against Guarantor, and without notice to or further assent by Guarantor,
any demand for payment of any of the Obligations made by Buyer may be rescinded
by Buyer and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by Buyer, and any
Repurchase Document and any other document in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as Buyer may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by Buyer for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released.  Buyer shall have no
obligation to protect, secure, perfect or insure any lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto.  When making any demand hereunder against Guarantor, Buyer may, but
shall be under no obligation to, make a similar demand on any Seller or any
other guarantor, and any failure by Buyer to make any such demand or to collect
any payments from Seller or any such other guarantor or any release of Seller or
such other guarantor shall not relieve Guarantor of its Obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of Buyer against Guarantor.  For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.

 

5.                                      Guarantee Absolute and Unconditional. 
(a)  Guarantor hereby agrees that its obligations under this Guarantee
constitute a guarantee of payment when due and not of collection.  Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by Beneficiary upon this
Guarantee or acceptance of this Guarantee; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guarantee; and all dealings between any Seller or Guarantor,
on the one hand, and Beneficiary, on the other hand, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee.  Guarantor waives promptness, diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon Seller or Guarantor
with respect to the Obligations.  This Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(i) the validity, regularity or enforceability of any Agreement, any of the
Obligations or any collateral security therefor or guarantee or right of offset
with respect thereto at any time or from time to time held by Beneficiary,
(ii) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by a Seller
against Beneficiary, (iii) any requirement that Beneficiary exhaust any right to
take any action against a Seller or any other Person prior to or
contemporaneously with proceeding to exercise any right against Guarantor under
this Guarantee or (iv) any other circumstance whatsoever (with or without notice
to or knowledge of any Seller or Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of Seller for the
Obligations or of Guarantor under this Guarantee, in bankruptcy or in any other
instance.  When pursuing its rights and remedies hereunder against Guarantor,
Beneficiary may, but shall be under no obligation, to pursue such rights and
remedies that Beneficiary may have against Seller or any other Person or against
any collateral security or

 

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guarantee for the Obligations or any right of offset with respect thereto, and
any failure by Beneficiary to pursue such other rights or remedies or to collect
any payments from Seller or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of Seller or any such other Person or any such collateral security,
guarantee or right of offset, shall not relieve Guarantor of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of Beneficiary against
Guarantor.  This Guarantee shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon Guarantor and its
successors and assigns thereof, and shall inure to the benefit of Beneficiary,
and its successors, endorsees, transferees and assigns, until all of the
Obligations shall have been satisfied in full, notwithstanding any sale by Buyer
of any Purchased Asset as set forth in Article 10 of the Repurchase Agreement or
the exercise by Buyer of any of the other rights and remedies set forth in any
of the Repurchase Documents.

 

(b)                                 Without limiting the generality of the
foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to
Beneficiary as follows:

 

(i)                                     Guarantor hereby waives any defense
arising by reason of, and any and all right to assert against Buyer any claim or
defense based upon, an election of remedies by Beneficiary which in any manner
impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s
subrogation rights, rights to proceed against Seller, or any other guarantor for
reimbursement or contribution, and/or any other rights of Guarantor to proceed
against Seller against any other guarantor, or against any other person or
security.

 

(ii)                                  Guarantor is presently informed of the
financial condition of Seller and of all other circumstances which diligent
inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations.  Guarantor hereby covenants that it will make its own investigation
and will continue to keep itself informed about each of Seller’s financial
condition, the status of other guarantors, if any, of circumstances which bear
upon the risk of nonpayment and that it will continue to rely upon sources other
than Buyer for such information and will not rely upon Beneficiary or any
Beneficiary for any such information.  Absent a written request for such
information by Guarantor to Beneficiary, Guarantor hereby waives the right, if
any, to require Beneficiary to disclose to Guarantor any information which
Beneficiary may now or hereafter acquire concerning such condition or
circumstances including, but not limited to, the release of or revocation by any
other guarantor.

 

(iii)                               Guarantor has independently reviewed the
Repurchase Documents and related agreements and has made an independent
determination as to the validity and enforceability thereof, and in executing
and delivering this Guarantee to Beneficiary, Guarantor is not in any manner
relying upon the validity, and/or enforceability, and/or attachment, and/or
perfection of any liens or security interests of any kind or nature granted by
Seller or any other guarantor to Buyer or any Buyer, now or at any time and from
time to time in the future.

 

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6.                                      Reinstatement.  This Guarantee shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by Buyer upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Seller or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any of any Seller or any substantial part of such Seller’s
property, or otherwise, all as though such payments had not been made.

 

7.                                      Payments.  Guarantor hereby agrees that
the Obligations will be paid to Buyer without set-off or counterclaim in U.S.
Dollars at the address specified in writing by Buyer.

 

8.                                      Representations and Warranties. 
Guarantor represents and warrants that:

 

(a)                                 Guarantor has the legal capacity and the
legal right to execute and deliver this Guarantee and to perform Guarantor’s
obligations hereunder;

 

(b)                                 no consent or authorization of, filing with,
or other act by or in respect of, any arbitrator or governmental authority and
no consent of any other Person (including, without limitation, any creditor of
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee;

 

(c)                                  this Guarantee has been duly executed and
delivered by Guarantor and constitutes a legal, valid and binding obligation of
Guarantor enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity (whether enforcement is sought in proceedings in
equity or at law);

 

(d)                                 the execution, delivery and performance of
this Guarantee will not violate any law, treaty, rule or regulation or
determination of an arbitrator, a court or other governmental authority,
applicable to or binding upon Guarantor or any of its property or to which
Guarantor or any of its property is subject (“Requirement of Law”), or any
provision of any security issued by Guarantor or of any agreement, instrument or
other undertaking to which Guarantor is a party or by which it or any of its
property is bound (“Contractual Obligation”), and will not result in or require
the creation or imposition of any lien on any of the properties or revenues of
Guarantor pursuant to any Requirement of Law or Contractual Obligation of
Guarantor;

 

(e)                                  no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
Knowledge of Guarantor, threatened by or against Guarantor or against any of
Guarantor’s properties or revenues with respect to this Guarantee or any of the
transactions contemplated hereby; and

 

(f)                                   except as disclosed in writing to Buyer
prior to the date hereof, Guarantor has filed or caused to be filed all tax
returns which, to the Knowledge of Guarantor, are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against him or any of Guarantor’s property and all other taxes, fees or
other charges imposed on him or any of Guarantor’s property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by

 

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appropriate proceedings); no tax lien has been filed, and, to the Knowledge of
Guarantor, no claim is being asserted, with respect to any such tax, fee or
other charge.

 

Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by Guarantor on the date of each Transaction under the
Repurchase Agreement, on and as of such date of the Transaction, as though made
hereunder on and as of such date.

 

9.                                      Covenants.

 

(a)                                 Total Indebtedness to Total Assets Ratio. 
Guarantor shall not permit the ratio of its Total Indebtedness (excluding all
Contingent Liabilities) to its Total Assets for any Test Period (calculated on a
consolidated basis) to be greater than 0.75 (seventy-five percent, 75%), with
compliance to be tested as of the end of each Test Period.

 

(b)                                 [Reserved].

 

(c)                                  Fixed Charge Coverage Ratio.  Commencing on
the calendar quarter ending on June 30, 2013, Guarantor shall not permit its
Fixed Charge Coverage Ratio for the immediately preceding twelve (12) month
period ending on the last date of the applicable Test Period to be less than
1.25 to 1.00, with compliance to be tested as of the end of each Test Period.

 

(d)                                 Tangible Net Worth.  Guarantor shall not
permit its Tangible Net Worth to be less than the sum of (i) $135,520,000, plus
(ii) eighty percent (80%) of the net proceeds (after the deduction of all
related transaction costs) of all subsequent issuances of equity by Guarantor,
with compliance to be tested as of the end of each Test Period.  Seller shall
confirm the amount of Guarantor’s Tangible Net Worth as of the date of this
Guarantee, in writing in a Compliance Certificate executed and delivered to
Buyer on May 22, 2012.

 

10.                               Severability.  Any provision of this Guarantee
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

11.                               Paragraph Headings.  The paragraph headings
used in this Guarantee are for convenience of reference only and are not to
affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

12.                               No Waiver; Cumulative Remedies.  Buyer shall
not by any act (except by a written instrument pursuant to Section 13 hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any default or event of default or in
any breach of any of the terms and conditions hereof.  No failure to exercise,
nor any delay in exercising, on the part of Buyer, any right, power or privilege
hereunder shall operate as a waiver thereof.  No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A
waiver by Buyer of any right or remedy hereunder on any one

 

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occasion shall not be construed as a bar to any right or remedy which Buyer
would otherwise have on any future occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.

 

13.                               Waivers and Amendments; Successors and
Assigns; Governing Law.  None of the terms or provisions of this Guarantee may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by Guarantor and Buyer, provided that, subject to any
limitations set forth in the Repurchase Agreement, any provision of this
Guarantee may be waived by Buyer in a letter or agreement executed by Buyer or
by telex or facsimile transmission from Buyer.  This Guarantee shall be binding
upon the heirs, personal representatives, successors and assigns of Guarantor
and shall inure to the benefit of Buyer, and their respective successors and
assigns.  THIS GUARANTEE AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR
RELATED TO OR IN CONNECTION WITH THIS GUARANTEE, THE RELATIONSHIP OF THE
PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF
THE PARTIES WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CONFLICTS OF LAW PRINCIPLES OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

 

14.                               Notices.  Notices by Buyer to Guarantor may be
given by mail, or by telecopy transmission, addressed to Guarantor at the
address or transmission number set forth under its signature below and shall be
effective (a) in the case of mail, five days after deposit in the postal system,
first class certified mail and postage pre-paid, (b) one Business Day following
timely delivery to a nationally recognized overnight courier service for next
Business Day delivery and (c) in the case of telecopy transmissions, when sent,
transmission electronically confirmed if prior to 5:00 p.m. local recipient time
on a Business Day, and otherwise on the next succeeding Business Day.  Notices
to Buyer by Guarantor may be given in the manner set forth in the Repurchase
Agreement.

 

15.                               SUBMISSION TO JURISDICTION; WAIVERS.  EACH OF
GUARANTOR AND BENEFICIARY HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(A)                               SUBMITS FOR GUARANTOR AND GUARANTOR’S PROPERTY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND THE OTHER
REPURCHASE DOCUMENTS TO WHICH GUARANTOR IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;

 

(B)                               CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN

 

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ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

 

(C)                               AGREES THAT SERVICE OF PROCESS IN ANY ACTION
OR PROCEEDING UNDER THIS GUARANTEE MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO SUCH PARTY AT SUCH PARTY’S ADDRESS, AS SET FORTH UNDER
GUARANTOR’S SIGNATURE BELOW, WITH RESPECT TO DELIVERIES SENT TO GUARANTOR, OR,
WITH RESPECT TO DELIVERIES SENT TO BUYER, AT THE ADDRESS SET FORTH IN THE
REPURCHASE AGREEMENT, OR, IN EITHER CASE, AT SUCH OTHER ADDRESS OF WHICH THE
OTHER PARTY SHALL HAVE BEEN NOTIFIED; AND

 

(D)                               AGREES THAT NOTHING HEREIN SHALL AFFECT THE
RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

16.                               Integration.  This Guarantee represents the
agreement of Guarantor with respect to the subject matter hereof and there are
no promises or representations by Buyer or any Buyer relative to the subject
matter hereof not reflected herein.

 

17.                               Acknowledgments.  Guarantor hereby
acknowledges that:

 

(a)                                 Guarantor has been advised by counsel in the
negotiation, execution and delivery of this Guarantee and the related documents;

 

(b)                                 neither Buyer nor any Beneficiary has any
fiduciary relationship to Guarantor, and the relationship between Beneficiary
and Guarantor is solely that of surety and creditor; and

 

(c)                                  no joint venture exists between or among
any of Buyer, the Beneficiary, Guarantor and Sellers.

 

18.                               WAIVERS OF JURY TRIAL.  EACH OF GUARANTOR AND
BENEFICIARY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT
AND FOR ANY COUNTERCLAIM HEREIN OR THEREIN.

 

19.                               Effect of Amendment and Restatement.  From and
after the date hereof, the Existing Guarantee from Guarantor in favor of Buyer,
shall be amended, restated and superseded in its entirety by this Guarantee.

 

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the undersigned has caused this Amended and Restated
Guarantee Agreement to be duly executed and delivered as of the date first above
written.

 

 

 

ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation

 

 

 

 

 

By:

/s/ Timothy B. Smith

 

 

Name: Timothy B. Smith

 

 

Title: Vice President

 

Address for Notices:

 

Ares Commercial Real Estate Corporation

c/o Ares Management LLC

One North Wacker Drive, 48th Floor

Chicago, IL  60606

Attention:  Sharon L. Ephraim

 

Ares Commercial Real Estate Corporation

c/o Ares Management LLC

One North Wacker Drive, 48th Floor

Chicago, IL  60606

Attention:  Legal Department

 

 

With a copy to:

 

David Shapiro, Esq. (030205-0128)

Latham & Watkins LLP

885 Third Avenue

New York, NY  10022

 

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