Exhibit 10.2

 

EXECUTION

 

GUARANTY

 

GUARANTY, dated as of April 9, 2014 (as amended, supplemented, or otherwise
modified from time to time, this “Guaranty”), made by Ares Commercial Real
Estate Corporation, a Maryland real estate investment trust (the “Guarantor”),
in favor of UBS Real Estate Securities Inc. (the “Buyer”).

 

RECITALS

 

Pursuant to the Master Repurchase Agreement, dated as of April 9, 2014 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Repurchase Agreement”), among ACRC Lender U LLC, ACRC Lender U TRS LLC (each, a
“Seller” and collectively, the “Sellers”), ACRC Lender U Mezz LLC (the
“Mezzanine Subsidiary”), the Guarantor and the Buyer, the Buyer has agreed from
time to time to enter into transactions with Sellers upon the terms and subject
to the conditions set forth therein.  It is a condition precedent to the
obligation of the Buyer to enter into Transactions with the Sellers under the
Repurchase Agreement that the Guarantor shall have executed and delivered this
Guaranty to the Buyer.

 

Now, therefore, in consideration of the premises and to induce the Buyer to
enter into the Repurchase Agreement and engage in Transactions with the Sellers,
and for other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the Guarantor hereby agrees to guarantee each
Seller’s obligations under the Repurchase Agreement, as may be amended from time
to time.

 

1.                                      Defined Terms.

 

(a)                                 Unless otherwise defined herein, terms
defined in the Repurchase Agreement and used herein shall have the meanings
given to them in the Repurchase Agreement.

 

(b)                                 For purposes of this Guaranty, “Obligations”
shall mean all obligations and liabilities of the Sellers to the Buyer, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, or whether for payment or for performance
(including, without limitation, Price Differential accruing after the Repurchase
Date for the Transactions and Price Differential accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Seller, whether or not a
claim for post filing or post petition interest is allowed in such proceeding),
which may arise under, or out of or in connection with the Repurchase Agreement,
this Guaranty and any other Program Documents and any other document made,
delivered or given in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable and documented fees and
disbursements of counsel to the Buyer that are required to be paid by the
Sellers pursuant to the terms of such documents), all “claims” (as defined in
Section 101 of the Bankruptcy Code) of the Buyer against any Seller, or
otherwise.

 

(c)                                  The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Guaranty shall refer
to this Guaranty as a whole and not to any

 

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particular provision of this Guaranty and section and paragraph references are
to this Guaranty unless otherwise specified.

 

(d)                                 The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.

 

2.                                      Guarantee.  (a) Guarantor hereby,
unconditionally and irrevocably, guarantees to the Buyer and its successors,
indorsees, transferees and assigns under the Program Documents, the prompt and
complete payment and performance by any Seller when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

 

(b)                                 Guarantor further agrees to pay any and all
reasonable and documented out-of-pocket costs and expenses (including, without
limitation, all reasonable and documented fees and disbursements of counsel)
which may be paid or incurred by the Buyer in enforcing any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, the Guarantor under this Guaranty.  This
Guaranty shall remain in full force and effect until the later of (i) the
termination of the Repurchase Agreement or (ii) the Obligations are paid in
full, notwithstanding that from time to time prior thereto a Seller may be free
from any Obligations.

 

(c)                                  No payment or payments made by any Seller,
the Guarantor, any other guarantor or any other Person or received or collected
by the Buyer from the Sellers, the Guarantor, any other guarantor 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 the Guarantor hereunder which shall, notwithstanding any such
payment or payments other than payments made by the Guarantor in respect of the
Obligations or payments received or collected from the Guarantor in respect of
the Obligations, remain liable for the Obligations until the Obligations are
paid in full and the Repurchase Agreement is terminated subject to the
provisions of Section 7 hereof.

 

3.                                      Right of Set-off.  Upon the occurrence
of any Event of Default, the Guarantor hereby irrevocably authorizes the Buyer
at any time and from time to time without notice to the Guarantor, any such
notice being expressly waived by the Guarantor, to set-off and appropriate and
apply any and all monies and other property of the Guarantor, deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Buyer or any affiliate thereof to or for the credit or the
account of the Guarantor, or any part thereof in such amounts as the Buyer may
elect, against and on account of the Obligations and liabilities of the
Guarantor to the Buyer hereunder and claims of every nature and description of
the Buyer against the Guarantor, in any currency, whether arising hereunder,
under the Repurchase Agreement, or otherwise, as the Buyer may elect, whether or
not the Buyer has made any demand for payment and although such Obligations and
liabilities and claims may be contingent or unmatured. The Buyer shall notify
the Guarantor promptly of any such set-off and the application made by the
Buyer, provided that the failure to give such notice shall not affect the
validity of such set-off and

 

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application.  The rights of the Buyer under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which the Buyer may have.

 

4.                                      No Subrogation.  Notwithstanding any
payment or payments made by the Guarantor hereunder or any set-off or
application of funds of the Guarantor by the Buyer, the Guarantor shall not be
entitled to be subrogated to any of the rights of the Buyer against any Seller
or any other guarantor or any collateral security or guarantee or right of
offset held by the Buyer for the payment of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from any
Seller or any other guarantor in respect of payments made by the Guarantor
hereunder, until all amounts owing to the Buyer by any Seller on account of the
Obligations are paid in full and the Repurchase Agreement is terminated. The
Guarantor hereby subordinates all of its subrogation rights against each Seller
to the full payment of Obligations due Buyer under the Repurchase Agreement for
a period of ninety-one (91) days following the final payment of the last of all
of the Obligations under the Program Documents.  If any amount shall be paid to
the Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Buyer, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the Buyer
in the exact form received by the Guarantor (duly indorsed by the Guarantor to
the Buyer, if required), to be applied against the Obligations in accordance
with the Repurchase Agreement.

 

5.                                      Amendments, Etc. with Respect to the
Obligations; Waiver of Rights.  Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against the Guarantor
and without notice to or further assent by the Guarantor, any demand for payment
of any of the Obligations made by the Buyer may be rescinded by the 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 the Buyer, and the Repurchase
Agreement, and the other Program Documents and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, in accordance with the terms thereof, and any
collateral security, guarantee or right of offset at any time held by the Buyer
for the payment of the Obligations may be sold, exchanged, waived, surrendered
or released in accordance with the terms of the Program Documents.  The Buyer
shall not have any obligation to protect, secure, perfect or insure any lien at
any time held by it as security for the Obligations or for this Guaranty or any
property subject thereto.  When making any demand hereunder against the
Guarantor, the Buyer may, but shall be under no obligation to, make a similar
demand on a Seller or any other guarantor, and any failure by the Buyer to make
any such demand or to collect any payments from any Seller or any such other
guarantor or any release of a Seller or such other guarantor shall not relieve
the 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
the Buyer against the Guarantor.  For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings.

 

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6.                                      Guaranty Absolute and Unconditional.

 

(a)                                 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 the Buyer upon this Guaranty or acceptance of this
Guaranty, the Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon this Guaranty; and all dealings among any Seller and the
Guarantor, on the one hand, and the Buyer, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty.

 

(b)                                 Guarantor hereby expressly waives all
set-offs and counterclaims and all diligence, presentments, demands for payment,
demands for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, notices of acceptance of this Guaranty, notices of
sale, notice of default or nonpayment to or upon any Seller or the Guarantor,
surrender or other handling or disposition of assets subject to the Repurchase
Agreement (in each case, except to the extent required under the Program
Documents), any requirement that Buyer exhaust any right, power or remedy or
take any action against any Seller or against any assets subject to the
Repurchase Agreement, and other formalities of any kind.

 

(c)                                  Guarantor understands and agrees that this
Guaranty shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (i) the validity, regularity or
enforceability of the Repurchase Agreement, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Buyer, (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 any Seller against the Buyer,
or (iii) any other circumstance whatsoever (with or without notice to or
knowledge of any Seller or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of a Seller from the
Obligations, or of the Guarantor from this Guaranty, in bankruptcy or in any
other instance.

 

(d)                                 When pursuing its rights and remedies
hereunder against the Guarantor, the Buyer may, but shall be under no obligation
to, pursue such rights and remedies as it may have against any Seller or any
other Person or against any collateral security or guarantee for the Obligations
or any right of offset with respect thereto, and any failure by the Buyer to
pursue such other rights or remedies or to collect any payments from a 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 a Seller or
any such other Person or any such collateral security, guarantee or right of
offset, shall not relieve the 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 the Buyer against the Guarantor.

 

(e)                                  This Guaranty shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
the Guarantor and the successors and assigns thereof (to the extent permitted
under the Repurchase Agreement), and shall inure to the benefit of the Buyer,
and its successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guaranty shall have
been satisfied by payment in full

 

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and the Repurchase Agreement shall be terminated, notwithstanding that from time
to time prior thereto a Seller may be free from any Obligations.

 

(f)                                   Guarantor waives, to the fullest extent
permitted by applicable law, all defenses of surety to which it may be entitled
by statute or otherwise.

 

7.                                      Reinstatement.  The Obligations of the
Guarantor under this Guaranty, and this Guaranty, shall continue to be
effective, or be reinstated, as the case may be, and be continued in full force
and effect, if at any time any payment, or any part thereof, of any of the
Obligations is rescinded, invalidated, declared fraudulent or preferentially set
aside or must otherwise be restored, returned or repaid by the Buyer upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any Seller
or the Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, any Seller or
the Guarantor or any substantial part of its or their property, or for any other
reason, all as though such payments had not been made.

 

8.                                      Payments.   Guarantor hereby guarantees
that payments hereunder will be paid to the Buyer without set-off or
counterclaim in U.S. Dollars.

 

9.                                      Event of Default.  If an Event of
Default under the Repurchase Agreement shall have occurred and be continuing,
the Guarantor agrees that, as between the Guarantor and Buyer, the Obligations
may be declared to be due for purposes of this Guaranty notwithstanding any
stay, injunction or other prohibition which may prevent, delay or vitiate any
such declaration as against a Seller and that, in the event of any such
declaration (or attempted declaration), such Obligations shall forthwith become
due by the Guarantor for purposes of this Guaranty.

 

10.                               Waiver of Rights.   Guarantor hereby waives:
(i) notice of or proof of reliance by the Buyer upon this Guaranty or acceptance
of this Guaranty, and the Obligations shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Guaranty, and all dealings among a Seller and the Guarantor,
on the one hand, and the Buyer, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty; (ii) diligence, presentment, protest, all demands whatsoever, and
notice of default or nonpayment with respect to the Obligations, except, in each
case, to the extent required under the Program Documents; (iii) the filing of
claims with any court in case of the insolvency, reorganization or bankruptcy of
any Seller; and (iv) any fact, event or circumstance that might otherwise
constitute a legal or equitable defense to or discharge of the Guarantor,
including (but without typifying or limiting this waiver), failure by the Buyer
to perfect a security interest in any collateral securing performance of any
Obligation or to realize the value of any collateral or other assets which may
be available to satisfy any Obligation and any delay by the Buyer in exercising
any of its rights hereunder or against any Seller.

 

11.                               Notices.  All notices, requests and other
communications provided for herein (including without limitation any
modifications of, or waivers, requests or consents under, this Guaranty) shall
be given or made in writing (including without limitation by electronic
transmission) delivered to the intended recipient at the “Address for Notices”
specified below its name on the signature pages of the Repurchase Agreement, or,
with respect to Guarantor, at the

 

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“Address for Notices” specified below its name on the signature page hereof);
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other party.  All such communications shall be
deemed to have been duly given when transmitted electronically or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.

 

12.                               Severability.  Any provision of this Guaranty
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.

 

13.                               Integration.  This Guaranty represents the
agreement of the Guarantor with respect to the subject matter hereof and thereof
and there are no promises or representations by the Buyer relative to the
subject matter hereof or thereof not reflected herein or therein.

 

14.                               Amendments in Writing; No Waiver; Cumulative
Remedies.  (a) None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Guarantor and the Buyer, provided that any provision of this
Guaranty may be waived by the Buyer.

 

(b)                                 The Buyer shall not by any act (except by a
written instrument pursuant to Section 14(a) 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 the 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 the
Buyer of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Buyer would otherwise have
on any future occasion.

 

(c)                                  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

 

15.                               Section Headings.  The section headings used
in this Guaranty are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

 

16.                               Successors and Assigns.  This Guaranty shall
be binding upon the successors and assigns of the Guarantor and shall inure to
the benefit of the Buyer and its successors and assigns permitted under the
Repurchase Agreement.  This Guaranty may not be assigned by the Guarantor
without the express written consent of the Buyer.

 

17.                               Governing Law.  This Guaranty shall be
governed by the internal laws of the State of New York without giving effect to
the conflict of law principles thereof.

 

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18.                               SUBMISSION TO JURISDICTION; WAIVERS.  THE
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:

 

(A)                               SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND THE OTHER PROGRAM
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, THE FEDERAL 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, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN 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 SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF
WHICH THE BUYER 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 OR SHALL
LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

 

19.                               WAIVER OF JURY TRIAL.  THE GUARANTOR AND THE
BUYER EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER PROGRAM DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed
and delivered by its duly authorized officer as of the date first above written.

 

 

 

 

ARES COMMERCIAL REAL ESTATE CORPORATION, as Guarantor

 

 

 

 

 

 

 

 

By:

/s/ Todd Schuster

 

 

 

Name: Todd Schuster

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

Address for Notices:

 

 

 

 

 

Ares Commercial Real Estate Corporation

 

 

One North Wacker Drive, 48th Floor

 

 

Chicago, IL 60606

 

 

Attention: Todd Schuster, CEO

 

 

Telephone: 310-921-7244

 

 

Telecopy: 310-432-8892

 

 

E-mail: tschuster@aresmgmt.com

 

 

 

 

 

With a copy to:

 

 

 

 

 

One North Wacker Drive, 48th Floor

 

 

Chicago, IL 60606

 

 

Attention:  Legal Department

 

 

Telephone: 312-252-7500

 

 

Telecopy: 312-252-7501

 

 

E-mail: mscherer@aresmgmt.com

 

Signature Page to the Guaranty

 

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