Exhibit 10.1

 

Execution Version

 

AMENDMENT NO. 6 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES
CONTRACT AND AMENDED AND RESTATED GUARANTEE AGREEMENT

 

AMENDMENT NO. 6 TO AMENDED AND RESTATED MASTER REPURCHASE AND SECURITIES
CONTRACT AND AMENDED AND RESTATED GUARANTEE AGREEMENT, dated as of June 30, 2016
(this “Amendment”), between and among ACRC LENDER W LLC and ACRC LENDER W TRS
LLC, each a Delaware limited liability company (individually, a “Seller” and
collectively, the “Sellers”), ARES COMMERCIAL REAL ESTATE CORPORATION, a
Maryland corporation (the “Guarantor”) and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association (the “Buyer”).  Capitalized terms
used but not otherwise defined herein shall have the meanings given to them in
the Repurchase Agreement (as defined below).

 

RECITALS

 

WHEREAS, Sellers and Buyer are parties to that certain Amended and Restated
Master Repurchase and Securities Contract, dated as of December 20, 2013 (the
“Original Repurchase Agreement”, and as amended by (i) that certain Amendment
No. 1 to Amended and Restated Master Repurchase and Securities Contract, dated
as of May 29, 2014, (ii) that certain Amendment No. 2 to Amended and Restated
Master Repurchase and Securities Contract, dated as of December 12, 2014,
(iii) that certain Amendment No. 3 to Amended and Restated Master Repurchase and
Securities Contract, dated as of January 1, 2015, (iv) that certain Amendment
No. 4 to Amended and Restated Master Repurchase and Securities Contract, dated
as of October 14, 2015 and (v) that certain Amendment No. 5 to Amended and
Restated Master Repurchase and Securities Contract and Amended and Restated
Guarantee Agreement, dated as of December 14, 2015 (collectively, clause
(i) through (iv), the “Prior MRA Amendments”), and as further amended, restated,
supplemented or otherwise modified and in effect from time to time, the
“Repurchase Agreement”);

 

WHEREAS, in connection with the Repurchase Agreement, Guarantor executed and
delivered to Buyer that certain Amended and Restated Guarantee Agreement, dated
as of December 20, 2013 (as amended pursuant to  (i) Amendment No. 1 to Amended
and Restated Guarantee Agreement, by and between Buyer and Guarantor, dated as
of May 29, 2014 and (ii) Amendment No. 5 to Amended and Restated Master
Repurchase and Securities Contract and Amended and Restated Guarantee Agreement,
dated as of December 14, 2015 (together with the Prior MRA Amendments, the
“Prior Amendments”), and as further amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Guarantee Agreement”); and

 

WHEREAS, Sellers and Buyer have agreed to amend certain provisions of the
Repurchase Agreement in the manner set forth herein, Buyer and Guarantor have
agreed to further amend certain provisions of the Guarantee Agreement in the
manner set forth herein, and Sellers and Guarantor hereby agree to make the
acknowledgements set forth herein.

 

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Therefore, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor, Sellers and Buyer each hereby agree as follows:

 

SECTION 1.            Amendments to Repurchase Agreement.

 

The defined terms “Initial Facility Termination Date” and “Maximum Amount”, each
as set forth in ARTICLE 2 of the Repurchase Agreement, are each hereby amended
and restated in their entirety to read as follows:

 

“Initial Facility Termination Date”: December 14, 2017.

 

“Maximum Amount”:  $325,000,000, which Maximum Amount shall not be increased by
any Future Funding Transaction or reduced upon the repurchase of any Purchased
Assets; provided, that on and after the Initial Facility Termination Date, the
Maximum Amount on any date shall be the aggregate Purchase Price outstanding for
all Transactions as of such date, as such amount declines over the term hereof
as Purchased Assets are repurchased and Margin Deficits are satisfied.

 

SECTION 2.            Amendments to Guarantee Agreement.

 

The defined terms “Debt”, “Fixed Charge Coverage Ratio”, “Recourse Debt” and
“Tangible Net Worth”, as set forth in Section 1 of the Guarantee Agreement, are
each hereby amended and restated in their entirety to read as follows:

 

“Debt”:  With respect to any Person: (i) all indebtedness, whether or not
represented by bonds, debentures, notes, securities, or other evidences of
indebtedness, for the repayment of money borrowed, (ii) all indebtedness
representing deferred payment of the purchase price of property or assets
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business and payable within 60 days), (iii) all indebtedness
under any lease which, in conformity with GAAP, is required to be capitalized
for balance sheet purposes, (iv) all indebtedness under guaranties,
endorsements, assumptions, or other contingent obligations, other than
contingent obligations with respect to future funding obligations of the
Subsidiaries of Guarantor, and (v) all indebtedness secured by a lien existing
on property owned, subject to such lien, whether or not the indebtedness secured
thereby shall have been assumed by the owner thereof; provided, that “Debt”
shall be determined without regard to the effects of consolidation of any issuer
of a Specified Third Party Securitization on the financial statements of the
Guarantor under Accounting Standards Codification Section 810, as amended,
modified or supplemented from time to time, or otherwise under GAAP.

 

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“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; provided, that the
“Fixed Charge Coverage Ratio” and associated components thereof shall be
determined without regard to the effects of consolidation of any issuer of a
Specified Third Party Securitization on the financial statements of the
Guarantor under Accounting Standards Codification Section 810, as amended,
modified or supplemented from time to time, or otherwise under GAAP.

 

“Recourse Debt”:  Without duplication, (a) Debt of a consolidated Subsidiary of
Guarantor for which Guarantor has provided a payment guarantee and/or (b) any
Debt of Guarantor other than Debt in respect of which recourse for payment
(except for customary exceptions for fraud, misrepresentation, misapplication of
cash, waste, environmental claims and liabilities, prohibited transfers,
violations of single purpose entity covenants customarily excluded by
institutional lenders from exculpation provisions and/or included in separate
guaranty or indemnification agreements in non-recourse financings of real
estate) is contractually limited to specific assets of Guarantor (and not a
majority of Guarantor’s assets) encumbered by a Lien securing such Debt;
provided, that “Recourse Debt” shall be determined without regard to the effects
of consolidation of any issuer of a Specified Third Party Securitization on the
financial statements of the Guarantor under Accounting Standards Codification
Section 810, as amended, modified or supplemented from time to time, or
otherwise under GAAP.

 

“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; provided, that
“Tangible Net Worth” shall be determined without regard to the effects of
consolidation of any issuer of a Specified Third Party Securitization on the
financial statements of the Guarantor under Accounting Standards Codification
Section 810, as amended, modified or supplemented

 

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from time to time, or otherwise under GAAP.  For the sake of clarity, mortgage
servicing rights shall not be deemed to be intangible assets.

 

The defined term “Specified Third Party Securitization” is hereby added to
Section 1 of the Guarantee Agreement in its proper alphabetical order as
follows:

 

“Specified Third Party Securitization”:  Any securitization transaction that was
not established or sponsored by Guarantor, Manager or any of their respective
Affiliates.

 

SECTION 3.            Conditions Precedent.  This Amendment and its provisions
shall become effective on the later to occur of (i) June 30, 2016, provided that
this Amendment is executed and delivered by a duly authorized officer of each of
Sellers, Guarantor and Buyer on or prior to June 30, 2016 and (ii) the date that
Sellers and Guarantor have paid the modification fee to Buyer as required in
Amendment No. 3 to Amended and Restated Fee and Pricing Letter by and between
Sellers and Buyer of even date herewith (the “Amendment Effective Date”).

 

SECTION 4.            Conditions Subsequent.  Within ten (10) Business Days
following the Amendment Effective Date (or, if waived or extended by Buyer, such
later date as reasonably acceptable to Buyer), Sellers and Guarantor shall
provide Buyer with an opinion or opinions of counsel to Sellers and Guarantor
regarding the due authorization, execution and delivery and enforceability of
this Amendment, bankruptcy safe harbor issues (or a reaffirmation of the opinion
of Latham & Watkins LLP covering the same matters as the opinion delivered on
January 12, 2016) and updated copies (or reaffirmations) of all other legal
opinions previously delivered to Buyer by counsel to Sellers and Guarantor in
connection with the Original Repurchase Agreement.  The failure of Sellers and
Guarantor to do so shall constitute an immediate Event of Default under the
Repurchase Agreement.

 

SECTION 5.            Representations, Warranties and Covenants.  Guarantor and
each Seller hereby represents and warrants to Buyer, as of the date hereof and
as of the Amendment Effective Date, that (i) Guarantor and each Seller is in
full compliance with all of the terms and provisions set forth in each
Repurchase Document to which it is a party on its part to be observed or
performed, and (ii) Seller hereby represents and warrants to Buyer, as of the
date hereof and as of the Amendment Effective Date, no Default or Event of
Default has occurred or is continuing.  Guarantor and each Seller hereby
confirms and reaffirms its representations, warranties and covenants contained
in each Repurchase Document to which it is a party.

 

SECTION 6.            Acknowledgements.  Guarantor and each Seller hereby
acknowledges that Buyer is in compliance with its undertakings and obligations
under the Repurchase Agreement and the other Repurchase Documents.

 

SECTION 7.            Limited Effect.  Except as expressly amended and modified
by this Amendment, the Repurchase Agreement and each of the other Repurchase
Documents shall continue to be, and shall remain, in full force and effect in
accordance with their respective terms; provided, however, that upon the
Amendment Effective Date, (x) each reference therein

 

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and herein to the “Repurchase Documents” shall be deemed to include, in any
event, the Prior Amendments and this Amendment, (y) each reference to the
“Repurchase Agreement” and “Guarantee Agreement”, as applicable, in any of the
Repurchase Documents shall be deemed to be a reference to the Repurchase
Agreement and Guarantee Agreement, as applicable, as amended by the Prior
Amendments and this Amendment, and (z) each reference in the Repurchase
Agreement and Guarantee Agreement to “this Agreement”, this “Repurchase
Agreement”, this “Guarantee”, this “Guarantee Agreement”, “hereof”, “herein” or
words of similar effect in referring to the Repurchase Agreement and the
Guarantee Agreement, as applicable, shall be deemed to be references to the
Repurchase Agreement and the Guarantee Agreement, as applicable, as amended by
the Prior Amendments and this Amendment.

 

SECTION 8.            Counterparts.  This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page to this
Amendment in Portable Document Format (PDF) or by facsimile transmission shall
be effective as delivery of a manually executed original counterpart thereof.

 

SECTION 9.            Expenses.  Guarantor and each Seller agrees to pay and
reimburse Buyer for all out-of-pocket costs and expenses incurred by Buyer in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the fees and disbursements of Cadwalader,
Wickersham & Taft LLP, counsel to Buyer.

 

SECTION 10.          GOVERNING LAW.  THIS AMENDMENT AND ANY CLAIM, CONTROVERSY
OR DISPUTE ARISING UNDER OR RELATED TO OR IN CONNECTION WITH THIS AMENDMENT, 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.

 

[SIGNATURES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.

 

 

 

SELLERS:

 

 

 

 

 

 

 

ACRC LENDER W LLC, a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ John B. Jardine

 

 

Name: John B. Jardine

 

 

Title: Co-Chief Executive Officer and President

 

 

 

 

 

 

 

ACRC LENDER W TRS LLC, a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ John B. Jardine

 

 

Name: John B. Jardine

 

 

Title: Co-Chief Executive Officer and President

 

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BUYER:

 

 

 

 

 

 

 

WELLS FARGO BANK, N.A., a national banking association

 

 

 

 

 

 

 

By:

/s/ Melissa A. Dolski

 

 

Name: Melissa A. Dolski

 

 

Title: Director

 

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GUARANTOR:

 

 

 

 

 

 

 

ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation

 

 

 

 

 

 

 

By:

/s/ John B. Jardine

 

 

Name: John B. Jardine

 

 

Title: Co-Chief Executive Officer and President

 

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