Exhibit 10.2

 

EXECUTION VERSION

 

AMENDMENT NO. 1 TO AMENDED AND RESTATED GUARANTEE AGREEMENT

 

AMENDMENT NO. 1 TO AMENDED AND RESTATED GUARANTEE AGREEMENT, dated as of May 29,
2014 (this “Amendment”), by and between ARES COMMERCIAL REAL ESTATE CORPORATION,
a Maryland corporation (“Guarantor”) and WELLS FARGO BANK, NATIONAL ASSOCIATION,
a national banking association (“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, ACRC LENDER W LLC and ACRC LENDER W TRS LLC (collectively, “Sellers”)
and Buyer are parties to that certain Amended and Restated Master Repurchase and
Securities Contract, dated as of December 20, 2013 (as amended hereby and as
further amended, restated, supplemented or otherwise modified and in effect from
time to time, the “Repurchase Agreement”);

 

WHEREAS, in connection with the execution and delivery by the parties thereto of
the Repurchase Agreement, Guarantor executed and delivered to Buyer that certain
Amended and Restated Guarantee Agreement, also dated as of December 20, 2013 (as
amended hereby and as further amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Guarantee Agreement”); and

 

WHEREAS, Buyer and Guarantor have agreed to amend certain provisions of the
Guarantee Agreement in the manner set forth herein, and Guarantor has agreed to
make the acknowledgments set forth herein.

 

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

 

SECTION 1.                                     Amendments to Guarantee
Agreement.

 

(a)                                 The following new defined terms are hereby
added to Section 1 of the Guarantee Agreement, in correct alphabetical order:

 

“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

 

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(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.

 

“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.

 

(b)                                 The defined terms, “Total Assets” and “Total
Indebtedness”, as set forth in Section 1 of the Guarantee Agreement, are hereby
deleted in their entirety.

 

(c)                                  Sections 9(a) and (b) of the Guarantee
Agreement are hereby amended and restated in their entirety to read as follows:

 

(a)                                 Ratio of Recourse Debt to Tangible Net
Worth. At the end of each Test Period, Guarantor (on a consolidated basis) shall
maintain its ratio of Recourse Debt to Tangible Net Worth to not more than 3.00
to 1.00.

 

(b)                                 Ratio of Debt to Tangible Net Worth. At the
end of each Test Period, Guarantor (on a consolidated basis) shall maintain its
ratio of Debt to Tangible Net Worth to not more than 4.00 to 1.00.

 

(d)                                 Section 9 of the Guarantee Agreement is
hereby amended by adding a new Section 9(e) thereto, in correct alphabetical
order:

 

(e)                                  Guarantor shall deliver to Buyer those
documents required to be delivered by or on behalf of Guarantor pursuant to
Sections 8.07(a), (b), (d) and (e) of the Repurchase Agreement as soon as such
documents are available but, in any event, no later than as and when required
under the Repurchase Agreement.

 

SECTION 2.                                     Conditions Precedent.  This
Amendment and its provisions shall become effective on the first date on which
this Amendment is executed and delivered by a duly authorized officer of
Guarantor and Buyer (the “Amendment Effective Date”).

 

SECTION 3.                                     Representations, Warranties and
Covenants.  Guarantor hereby represents and warrants to Buyer, as of the date
hereof and as of the Amendment Effective Date, that (i) Guarantor 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) no Default or Event of Default has occurred or is continuing.  Guarantor
hereby confirms

 

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and reaffirms its representations, warranties and covenants contained in each
Repurchase Document to which it is a party.

 

SECTION 4.                                     Acknowledgements.  Guarantor
hereby acknowledges that Buyer is in compliance with its undertakings and
obligations under the Guarantee Agreement and the other Repurchase Documents.

 

SECTION 5.                                     Limited Effect.  Except as
expressly amended and modified by this Amendment, the Guarantee 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 and
herein to the “Repurchase Documents” shall be deemed to include, in any event,
this Amendment, (y) each reference to the “Guarantee Agreement” and the “Amended
and Restated Guarantee Agreement”, as applicable, in any of the Repurchase
Documents shall be deemed to be a reference to the Guarantee Agreement, as
amended hereby, and (z) each reference in the Guarantee Agreement to “this
Agreement”, this “Guarantee”, this “Guarantee Agreement”, this “Amended and
Restated Guarantee Agreement”, “hereof”, “herein” or words of similar effect in
referring to the Guarantee Agreement, shall be deemed to be references to the
Guarantee Agreement, as amended by this Amendment.

 

SECTION 6.                                     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 7.                                     Expenses.  Guarantor 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 8.                                     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.

 

 

 

GUARANTOR:

 

 

 

 

 

ARES COMMERCIAL REAL ESTATE CORPORATION, a Maryland corporation

 

 

 

 

 

 

 

By:

/s/ Maria Scherer

 

 

Name: Maria Scherer

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

BUYER:

 

 

 

 

 

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

 

 

 

 

 

 

 

By:

/s/ John Nelson

 

 

Name: John Nelson

 

 

Title: Managing Director

 

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