Exhibit 10.7

 

EXECUTION VERSION

 

SIXTH AMENDMENT TO FIFTH AMENDED AND RESTATED MORTGAGE WAREHOUSING AND SECURITY
AGREEMENT

 

THIS SIXTH AMENDMENT TO FIFTH AMENDED AND RESTATED MORTGAGE WAREHOUSING AND
SECURITY AGREEMENT (this “Amendment”) dated as of September 5, 2013, by and
among BANK OF AMERICA, N.A., as Credit Agent  (the “Credit Agent”), ACRE CAPITAL
LLC (f/k/a EF&A FUNDING, L.L.C. d/b/a ALLIANT CAPITAL, LLC) (the “Borrower”),
and the LENDER party to this Amendment (the “Lender”).

 

WITNESSETH:

 

WHEREAS, the Credit Agent, the Lender and the Borrower are parties to that
certain Fifth Amended and Restated Mortgage Warehousing and Security Agreement,
dated as of April 16, 2010 (as amended to date, the “Loan Agreement”);

 

WHEREAS, in connection with the consummation of the transactions contemplated by
that certain Purchase and Sale Agreement, dated as of May 14, 2013 (the
“Purchase Agreement”), by and among Alliant, Inc., The Alliant Company, LLC
(each, a “Seller” and, collectively, the “Sellers”) and Ares Commercial Real
Estate Corporation (the “ACRE”), (i) the Sellers have, among other things,
transferred all of the limited liability company interests of the Borrower to
ACRE Capital Holdings LLC, a Delaware limited liability company, and a direct
wholly owned subsidiary of ACRE (“ACRE Holdings”) (the “Transaction”), and
(ii) the name of the Borrower was changed to ACRE Capital LLC; and

 

WHEREAS, the Borrower has requested that the Credit Agent and the Lender consent
to the Transaction and agree to further amend the Loan Agreement, on and subject
to, the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Borrower, the Credit Agent and the Lender
agree as follows:

 

1.                                      Defined Terms.  Capitalized terms used,
but not defined, in this Amendment shall have the meanings provided therefor in
the Loan Agreement.

 

2.                                      Amendment to Loan Agreement.  As of the
Effective Date (as hereafter defined), the Loan Agreement is hereby amended as
follows:

 

(a)                       Section 6.1(ix) is hereby amended and restated in its
entirety to read as follows:

 

“(ix)                        A Change of Control or Management shall have
occurred.

 

As used herein:

 

“ACRE” means Ares Commercial Real Estate Corporation, a Maryland corporation.

 

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“ACRE Change of Control” means  any single event, transaction, or occurrence, or
series of related  events, transactions, or occurrences, as a result of which
(a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), is or
becomes a beneficial owner (within the meaning of Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of ACRE, representing
thirty-five percent (35%) or more of the outstanding voting common stock of
ACRE; or (b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of ACRE (together with any new or replacement directors whose election
by the board of directors of ACRE, or whose nomination for election, was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of ACRE then in office.

 

“ACRE Closing Date” means August 30, 2013.

 

“Change of Control or Management” means that, at any time following the ACRE
Closing Date, either (a) ACRE ceases to directly or indirectly through one or
more intermediaries, Control the Company, or (b) ACRE ceases to directly or
indirectly through one or more intermediaries own greater than 50% of the
ownership and economic interests of the Company, or (c) an ACRE Change of
Control has occurred.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the Company, whether
through the ownership of equity interests, by contract, or otherwise.”

 

(b)                       The Loan Agreement is hereby amended in its entirety
to replace each instance of the phrase “EF&A Funding, L.L.C.” with the phrase
“ACRE Capital LLC”.

 

(c)                        Section 7.3 is hereby amended by deleting the address
for notices for the Company set forth therein and replacing it as follows:

 

“The Company:

 

ACRE Capital LLC

25650 West Eleven Mile Road, Suite 300

Southfield, Michigan 48034

Attn: Kelley Prevete

Fax: 248-746-5763

 

with a copy to:

 

Ares Commercial Real Estate Management LLC

One North Wacker Drive, 48th Floor

Chicago, Illinois 60606

Attn: Legal Department

 

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Fax: (312) 324-5901”

 

(d)                       Exhibits G and K of the Loan Agreement are hereby
amended and restated in their entirety with Exhibits G and K attached hereto and
made a part hereof.

 

(e)                        Schedule 1 of the Loan Agreement is hereby amended
and restated in its entirety with Schedule 1 attached hereto and made a part
hereof.

 

3.                                      Consent and Waiver.  The Credit Agent
and the Lender hereby agree as follows:

 

(a)                       Notwithstanding Section 4.11 or any other term or
provision of the Loan Agreement or the other Loan Documents, the Credit Agent
and the Lender hereby consent to the Transaction, including, without limitation
(i) the Sellers’ transfer of all of the limited liability company interests of
the Borrower to ACRE Holdings and the other transactions contemplated by the
Purchase Agreement, and (ii) the change of Borrower’s true legal name following
the closing of the Transaction to ACRE Capital LLC.

 

(b)                       The Credit Agent and the Lender each hereby waive any
Event of Default arising from the Transaction or any of the other transactions
contemplated by the Purchase Agreement arising as a result of the Transaction
pursuant to Section 6.1(ix) of the Loan Agreement as in effect immediately prior
to this Amendment.

 

(c)                        The waivers and consents granted hereby do not
include any transaction, matter, act, omission, or occurrence which is not
specifically set forth in, or specifically contemplated by, the Purchase
Agreement, including, without limitation, (i) any amendment to the Borrower’s
articles of organization, operating agreement, or other governing document which
is not reflected in the certificate to be delivered pursuant to
Section 4(a)(ii) of this Amendment, and (ii) the incurrence of any Indebtedness
not specifically permitted pursuant to applicable provisions of the Loan
Agreement.

 

4.                                      Conditions Precedent.  The effectiveness
of this Amendment and the consents and waivers set forth in Section 3 are
expressly conditioned on the satisfaction of, or written waiver by the Credit
Agent of, the following conditions and any other conditions set forth in this
Amendment by no later than 3:00 p.m., (Chicago time) on October 15, 2013 (with
the date, if it occurs, as of which all of such conditions have been satisfied
or waived being referred to herein as the “Effective Date”):

 

(a)                       The Credit Agent shall have received the following:

 

(i)             This Amendment, duly executed by all parties hereto.

 

(ii)          A certificate of an authorized person of the Borrower as to
(x) any amendments to the Borrower’s articles of organization or operating
agreement since June 28, 2013, and (y) the authority and incumbency of the
person executing and delivering this Amendment.

 

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(iii)       (x) A certificate of an authorized person of ACRE Holdings as to its
certificate of formation and limited liability company agreement, and (y) a
certificate of legal existence and good standing with respect to ACRE Holdings
issue by the Secretary of State of Delaware dated no more than thirty (30) days
prior to the Effective Date.

 

(iv)      Copies of the respective approvals of the Transaction by Fannie Mae,
Ginnie Mae, and HUD/FHA, and evidence reasonably satisfactory to the Credit
Agent of the satisfaction or waiver of any conditions to such approvals.

 

5.                                      Acknowledgements by Borrower.  The
Borrower acknowledges, confirms, represents and warrants and agrees that:

 

(a)                       The closing of the Transaction and the other
transactions contemplated by the Purchase Agreement has occurred substantially
in accordance with the material terms of the Purchase Agreement.

 

(b)                       This Amendment is a Loan Document.

 

(c)                        Except as provided in this Amendment, the terms and
conditions of the Loan Agreement and the other Loan Documents remain in full
force, Borrower hereby (x) as of the date hereof and as of the Effective Date,
ratifies, confirms and reaffirms all and singular of the terms and conditions of
the Loan Agreement and the other Loan Documents applicable to the Borrower, and
(y) represents and warrants that:

 

(i)             attached hereto as Exhibit A is a true, correct and complete
copy of the Purchase Agreement.

 

(ii)          no Default or Event of Default exists on the date hereof or will
exist on the Effective Date.

 

(iii)       the representations and warranties made by the Borrower in the Loan
Agreement and the other Loan Documents are as of the date hereof and, as amended
by this Amendment, will be as of the Effective Date, true and correct in all
material respects, except as to matters which speak to a specific date and
changes in the ordinary course to the extent permitted and contemplated by the
Loan Agreement.

 

(iv)      the Borrower has the power and authority and legal right to execute,
deliver and perform this Amendment, and has taken all necessary action to
authorize the execution, delivery, and performance of this Amendment, and the
person executing and delivering this Amendment on behalf of the Borrower is duly
authorized to do so.

 

(v)         this Amendment has been duly executed and delivered on behalf of the
Borrower and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with

 

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its terms, subject to the effect of applicable bankruptcy and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity.

 

(vi)          Attached hereto as Exhibit B is a true, correct and complete
organizational chart of the Borrower, after giving effect to the consummation of
the Transaction.

 

(vii)         The consummation of the Transaction and the matters contemplated
thereby and the performance by any applicable Person of any of such Person’s
obligations thereunder which in any way relate to or affect the Borrower
(a) will not, to the knowledge of the Borrower, contravene any applicable
material provisions of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality applicable to
the Borrower, and (b) unless any necessary consents or approvals have been
obtained and copies thereof furnished to the Credit Agent, will not, to the
knowledge of the Borrower, conflict with or result in any breach of, any of the
terms, covenants, conditions, or provisions of, or constitute a default under,
any material agreement to which the Borrower is a party or by which the Borrower
or any of the Borrower’s assets is subject.

 

(d)        The Borrower shall promptly pay upon receipt of an invoice or
statement therefor the reasonable attorneys’ fees and expenses and disbursements
incurred by the Credit Agent in connection with this Amendment and all previous
matters relating to the Loan Agreement and the Borrower’s relationship with the
Credit Agent and the Lender.

 

(e)        The Credit Agent is authorized to file appropriate UCC-3 financing
statements in any appropriate jurisdiction.

 

(f)        As soon as practicable following the Effective Date, the Borrower
shall provide the Credit Agent with evidence that all insurance required to be
maintained by the Borrower pursuant to the applicable provisions of the Loan
Agreement remain in effect under the Borrower’s name.

 

6.             Miscellaneous.

 

(a)        Except as provided herein, the terms and conditions of the Loan
Agreement and the other Loan Documents remain in full force and effect.

 

(b)        This Amendment may be executed in several counterparts and by each
party on a separate counterpart, each of which when so executed and delivered
shall be an original, and all of which together shall constitute one instrument.
Signatures transmitted electronically (including by fax or e-mail) shall have
the same legal effect as the originals, but each party nevertheless shall
deliver original signed counterparts of this Amendment to each other party upon
request of another party.

 

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(c)        This Amendment expresses the entire understanding of the parties with
respect to the transactions contemplated hereby. No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions hereof.

 

(d)        This Amendment shall be governed in accordance with the internal laws
of the State of New York (without regard to conflict of laws principles which
would result in the application of the law of another jurisdiction) as an
instrument under seal.

 

[Remainder of Page Intentionally Left Bank]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date first set forth above.

 

 

 

ACRE CAPITAL LLC

 

 

 

 

By:

ACRE Capital Holdings LLC, its

 

 

Manager

 

 

 

 

 

 

 

By:

/s/ Timothy B. Smith

 

 

Name: Timothy B. Smith

 

 

Title: Vice President

 

 

 

 

 

 

 

BANK OF AMERICA, N.A.,

 

as Credit Agent

 

 

 

 

 

 

 

By:

/s/ Seamus O’Mahoney

 

 

Name: Seamus O’Mahoney

 

 

Title: SVP

 

 

 

 

 

 

BANK OF AMERICA, N.A.,

 

as Lender

 

 

 

 

 

 

By:

/s/ Seamus O’Mahoney

 

 

Name: Seamus O’Mahoney

 

 

Title: SVP

 

Sixth Amendment Signature Page

 

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