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  Exhibit 10.2    
    


 
    MANAGEMENT AGREEMENT
  BETWEEN
  ARES COMMERCIAL REAL ESTATE CORPORATION
  AND
  ARES COMMERCIAL REAL ESTATE MANAGEMENT LLC    
    



        This Management Agreement (this "Agreement") is made as
of                    , 2012, by
and between Ares Commercial Real Estate Corporation, a Maryland corporation (together with its subsidiaries, the "Company"), and Ares Commercial Real
Estate Management LLC, a Delaware limited liability company (the "Manager"). 


        WHEREAS,
the Company is a newly organized specialty finance company focused on originating, investing in and managing middle-market commercial real estate loans and other commercial real
estate-related investments; 


        WHEREAS,
the Company intends to qualify as a real estate investment trust for federal income tax purposes and will elect to receive the tax benefits afforded by Sections 856
through 860 of the Internal Revenue Code of 1986, as amended (the "Code"); and 


        WHEREAS,
the Company desires to retain the Manager to administer the business activities and day-to-day operations of the Company and to perform services for the
Company in the manner and on the terms set forth herein and the Manager wishes to be retained to provide such services. 



        NOW
THEREFORE, the Company and the Manager hereby agree as follows: 


        Section 1.    Definitions.


        (a)   The
following terms shall have the meanings set forth in this Section 1(a): 



        "Affiliate" means (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person,
(ii) any executive officer or general partner of such other Person, (iii) any member of the board of directors or board of managers (or bodies performing similar functions) of such
Person, and (iv) any legal entity for which such Person acts as an executive officer or general partner. 


        "Agreement" has the meaning set forth in the Preamble. 


        "Automatic Renewal Term" has the meaning set forth in Section 10(a) hereof. 


        "Bankruptcy" means, with respect to any Person, (i) the filing by such Person of a voluntary petition seeking liquidation,
reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other U.S. federal or state or foreign insolvency law, or such Person's filing an
answer consenting to or acquiescing in any such petition, (ii) the making by such Person of any assignment for the benefit of its creditors, (iii) the expiration of 60 days after
the filing of an involuntary petition under Title 11 of the United States Code, an application for the appointment of a receiver for a material portion of the assets of such Person, or an involuntary
petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other U.S. federal or state or foreign insolvency law,  provided that the same shall not have been vacated,
 set aside or stayed within such 60 day period or (iv) the entry against such Person of
a final and non-appealable order for relief under any bankruptcy, insolvency or similar law now or hereinafter in effect. 


        "Base Management Fee" means the base management fee, calculated and payable quarterly in arrears, in an amount equal to
one-fourth of 1.50% of the Company's Equity. 


        "Board" means the board of directors of the Company. 


        "Business Day" means any day except a Saturday, a Sunday or a day on which banking institutions in New York, New York are not required to
be open. 








 

        "Claim" has the meaning set forth in Section 8(c) hereof. 


        "Closing Date" means the date of closing of the Initial Public Offering. 


        "Code" has the meaning set forth in the Recitals. 


        "Common Stock" means the common stock, par value $0.01, of the Company. 


        "Company" has the meaning set forth in the Recitals. 


        "Company Account" has meaning set forth in Section 4 hereof. 


        "Company Indemnified Party" has meaning set forth in Section 8(b) hereof. 


        "Confidential Information" has the meaning set forth in Section 5 hereof. 


        "Core Earnings" means the net income (loss), computed in accordance with GAAP, excluding (i) non-cash equity
compensation expense, (ii) the Incentive Compensation, (iii) depreciation and amortization, (iv) any unrealized gains or losses or other non-cash items that are
included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income and (v) one-time
events pursuant to changes in GAAP and certain non-cash charges, in each case after discussions between the Manager and the Independent Directors and approved by a majority of the
Independent Directors. 


        For
the avoidance of doubt, the exclusion of depreciation and amortization in the calculation of Core Earnings shall only apply to depreciation and amortization related to Target
Investments that are structured as debt to the extent that the Company forecloses upon the property or properties underlying such debt. 



        "Effective Termination Date" has the meaning set forth in Section 10(b) hereof. 


        "Equity" means: 



          (i)  the
sum of (A) the net proceeds from all issuances of the Company's equity securities since inception (allocated on a pro rata daily basis for such issuances
during the fiscal quarter of any such issuance), plus (B) the Company's retained earnings at the end of the most recently completed fiscal quarter determined in accordance with GAAP (without
taking into account any non-cash equity compensation expense incurred in current or prior periods), less 



         (ii)  (A)
any amount that the Company has paid to repurchase the Common Stock since inception; (B) any unrealized gains and losses and other non-cash items
that have impacted stockholders' equity as reported in the Company's financial statements prepared in accordance with GAAP, and (C) one-time events pursuant to changes in GAAP, and
certain non-cash items not otherwise described above, in each case after discussions between the Manager and the Independent Directors and approval by a majority of the Independent
Directors. 




        "Equity Incentive Plans" means the equity incentive plans adopted by the Company to provide incentive compensation to attract and retain
qualified directors, officers, advisors, consultants and other personnel, including the Manager and its Affiliates and their personnel, and any joint venture affiliates of the Company, including the
2012 Equity Incentive Plan. 


        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        "GAAP" means generally accepted accounting principles in effect in the United States on the date such principles are applied. 



        "Governing Instruments" means, with regard to any entity, the articles of incorporation or certificate of incorporation and bylaws in the
case of a corporation, the certificate of limited 



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partnership
(if applicable) and the partnership agreement in the case of a general or limited partnership, the certificate of formation and operating agreement in the case of a limited liability
company, the trust instrument in the case of a trust, or similar governing documents in each case as amended. 


        "HY Funds" has the meaning set forth in Section 2(a) hereof. 


        "Incentive Compensation" means the incentive management fee calculated and payable with respect to each fiscal quarter (or part thereof
that this Agreement is in effect) in arrears in an amount, not less than zero, obtained by subtracting: 



        (a)   the
sum of any Incentive Compensation earned by the Manager with respect to the first three fiscal quarters of such previous 12-month period from 



        (b)   the
product of (i) 20% and (ii) the amount obtained by subtracting (A) the product of (1) the weighted average issue price per share of the
Common Stock of all of the Company's public offerings of Common Stock multiplied by the weighted average number of shares of Common Stock outstanding (including, for the avoidance of doubt, any
restricted shares of Common Stock, restricted stock units or any shares of Common Stock not yet issued but underlying other awards granted under one or more of the Company's Equity Incentive Plans) in
the previous 12-month period, and (2) 8% from (B) Core Earnings of the Company for the previous 12-month period; 




provided, however, that no Incentive Compensation shall be payable with respect to any fiscal quarter
unless cumulative Core Earnings for the 12 most recently completed fiscal quarters is greater than zero. 


        For
purposes of calculating the Incentive Compensation prior to the completion of a 12-month period during the term of this Agreement, Core Earnings shall be calculated on
the basis of the number of days that this Agreement has been in effect on an annualized basis. 



        If
the Effective Termination Date does not correspond to the end of a fiscal quarter, the Manager's Incentive Compensation shall be calculated for the period beginning on the day after
the end of the fiscal quarter immediately preceding the Effective Termination Date and ending on the Effective Termination Date, which Incentive Compensation shall be calculated using Core Earnings
for the 12-month period ending on the Effective Termination Date. 


        "Indemnified Party" has the meaning set forth in Section 8(b) hereof. 


        "Independent Director" means a member of the Board who is "independent" in accordance with the Company's Governing Instruments and the
rules of the NYSE or such other securities exchange on which the shares of Common Stock are listed. 


        "Initial Public Offering" means the Company's underwritten sale of Common Stock to the public pursuant to the Company's Registration
Statement on Form S-11 (No. 333-176841). 


        "Initial Term" has the meaning set forth in Section 10(a) hereof. 



        "Investment Committee" means the investment committee formed by the Manager, the members of which shall consist of employees of the
Manager and its Affiliates and may change from time to time. 


        "Investment Company Act" means the Investment Company Act of 1940, as amended. 


        "Investment Guidelines" means the investment guidelines, a copy of which is attached hereto as  Exhibit A, as the same may amended, restated, modified, supplemented
or waived pursuant to the approval of a majority of the entire Board (which
must include a majority of the Independent Directors) and the Investment Committee. 



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        "Losses" has the meaning set forth in Section 8(a) hereof. 


        "Manager" has the meaning set forth in the Recitals. 



        "Manager Change of Control" means, other than as set forth in the immediately following sentence, a change in the direct or indirect
(i) beneficial ownership of more than 50% of the combined voting power of the Manager's then outstanding equity interests, or (ii) power to direct or control the management policies of
the Manager, whether through the ownership of beneficial equity interests, common directors or officers, by contract or otherwise. A Manager Change of Control shall not include changes resulting from
(x) public offerings of the equity interests of the Manager or one of its Affiliates or (y) any assignment of this Agreement by the Manager as permitted hereby and in accordance with the
terms hereof. 


        "Manager Indemnified Party" has the meaning set forth in Section 8(a) hereof. 


        "Manager Permitted Disclosure Parties" has the meaning set forth in Section 5 hereof. 


        "Monitoring Services" means monitoring services with respect to the Company's investments, including (i) negotiating servicing
agreements, (ii) acting as a liaison between the servicers of the assets and the Company, (iii) review of servicers' delinquency, foreclosure and other reports on assets,
(iv) supervising claims filed under any insurance policies and (v) enforcing the obligation of any servicer to repurchase assets. 


        "Notice of Proposal to Negotiate" has the meaning set forth in Section 10(c) hereof. 


        "NYSE" means The New York Stock Exchange. 



        "Person" means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any
federal, state, county or municipal government or any bureau,
department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing. 


        "Portfolio Management Services" means portfolio management services with respect to the Company's investments, including
(i) consulting with the Company on the purchase and sale of, and other opportunities in connection with, the Company's portfolio of investments, (ii) the collection of information and
the submission of reports pertaining to the Company's investments, interest rates and general economic conditions, (iii) periodic review and evaluation of the performance of the Company's
portfolio of investments, (iv) acting as liaison between the Company and banking, mortgage banking and investment banking institutions and other parties with respect to the purchase, financing
and disposition of investments and (iv) other customary functions related to portfolio management. 


        "Portfolio Investments" has the meaning set forth in Section 2(a) hereof. 


        "Regulation FD" means Regulation FD as promulgated by the SEC. 


        "REIT" means a "real estate investment trust" as defined under the Code. 


        "SEC" means the United States Securities and Exchange Commission. 


        "Securities Act" means the Securities Act of 1933, as amended. 


        "Sub-Manager" has the meaning set forth in Section 2(c) hereof. 



        "Target Investments" means the types of investments described under "Business—Our Investment Strategy" in the Company's
prospectus dated            , 2012, relating to the Initial Public Offering, subject to, and including any changes to the Investment Guidelines that may be approved by the Manager and the
Board
from time to time. 



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        "Termination Fee" means a termination fee equal to three times the sum of (i) the average annual Base Management Fee, and
(ii) average annual Incentive Compensation, in each case earned by the Manager during the 24-month period immediately preceding the most recently completed fiscal quarter prior to
the Effective Termination Date. 


        "Termination Notice" has the meaning set forth in Section 10(b) hereof. 


        "Termination Without Cause" has the meaning set forth in Section 10(b) hereof. 



        "Underwriting Agreement" means the underwriting agreement, dated as of April             , 2012, among the Company, the Manager
and the underwriters of the Initial Public Offering. 


        "Underwriting Committee" means the underwriting committee formed by the Manager, the members of which shall consist of employees of the
Manager and its Affiliates and may change from time to time. 


        "Underwriting Fee" has meaning set forth in Section 6(a) hereof. 




        (b)   As
used herein, accounting terms relating to the Company not defined in Section 1(a) hereof and accounting terms partly defined in Section 1(a) hereof, to
the extent not defined, shall have the respective meanings given to them under GAAP. As used herein, "fiscal quarters" shall mean the period from January 1 to March 31, April 1 to
June 30, July 1 to September 30 and October 1 to December 31 of the applicable year. 


        (c)   The
words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section references are to this Agreement 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. The words include, includes and including
shall be deemed to be followed by the phrase "without limitation." 


        Section 2.    Appointment and Duties of the Manager.


        (a)   The
Company hereby appoints the Manager to manage the investments and day to-day operations of the Company, subject at all times to the further terms and
conditions set forth in this Agreement and to the supervision of, and such further limitations or parameters as may be imposed from time to time by, the Board. The Manager hereby agrees to use its
commercially reasonable efforts to perform each of the duties set forth herein, provided that funds are made available by the Company for such purposes
as set forth in Section 7 hereof. The appointment of the Manager shall be exclusive to the Manager, except to the extent that the Manager elects, in its sole and absolute discretion, subject to
the terms of this Agreement, to cause the duties of the Manager as set forth herein to be provided by third parties. 


        The
Manager, in its capacity as manager of the investments and the operations of the Company, at all times will be subject to the supervision and direction of the Board and will have
only such functions and authority as the Board may delegate to it, including managing the Company's business affairs in conformity with the Investment Guidelines and policies that are approved and
monitored by the Board. The Company and the Manager hereby acknowledge the recommendation by the Manager and the approval by the Board, of the Investment Guidelines, including the Company's investment
strategy in the Target Investments. The Company and the Manager hereby acknowledge and agree that, during the term of this Agreement, any proposed changes to the Company's investment strategy that
would modify or expand the Target Investments may only be recommended by the Manager and shall require the approval of the Board and the Manager. The Company also acknowledges that, until the
expiration of the investment period of Wrightwood Capital High Yield Partners II LP, Wrightwood Capital High Yield Investors II LP, Wrightwood Capital High Yield Associates II LP
and Wrightwood Capital High 


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Yield
Advisors II LP (together, the "HY Funds") (which expires on December 31, 2012), the Manager must provide the HY Funds with a right
of first offer with respect to investments in mezzanine indebtedness, B-notes, preferred equity, joint venture equity interests, distressed opportunities including recapitalizations and
the acquisition of distressed indebtedness or equity, or
other interests, direct or indirect, in or relating to single or multiple real estate properties or assets (including, for all purposes hereunder, land, buildings and other improvements and related
personal or intangible personal property), and investments that are substantially similar to the foregoing, and pools or portfolios of real estate interests or assets, partial interests or rights in
real estate interests or assets that relate to the foregoing ("Portfolio Investments") that require less than $12,152,411 of capital. 


        (b)   The
Manager will be responsible for the day-to-day operations of the Company, and will perform (or cause to be performed) such services and
activities relating to the investments and operations of the Company as may be appropriate, which may include: 



          (i)  forming
the Underwriting Committee, which will have the following responsibilities: (A) reviewing investment opportunities presented to it by senior investment
professionals of the Manager; and (B) referring those investment opportunities that it approves to the Investment Committee for further review. 


         (ii)  forming
the Investment Committee, which will have the following responsibilities: (A) reviewing investment opportunities presented to it by the Underwriting
Committee and (B) reviewing the Company's investment portfolio for compliance with the Investment Guidelines at least on a quarterly basis, or more frequently as necessary; 



        (iii)  serving
as the Company's consultant with respect to the periodic review of the Investment Guidelines and other parameters for the Company's investments, financing
activities and operations, any modification to which will be approved by the Board; 


        (iv)  investigating,
analyzing and selecting possible investment opportunities and originating, acquiring, financing, retaining, selling, restructuring or disposing of
investments consistent with the Investment Guidelines; 


         (v)  with
respect to prospective purchases, sales or exchanges of investments, conducting negotiations on the Company's behalf with sellers, purchasers and brokers and, if
applicable, their respective agents and representatives; 


        (vi)  negotiating
and entering into, on the Company's behalf, repurchase agreements, interest rate swap agreements and other agreements and instruments required for the
Company to conduct the Company's business; 


       (vii)  engaging
and supervising, on the Company's behalf and at the Company's expense, independent contractors that provide investment banking, securities brokerage, mortgage
brokerage and other
financial services, due diligence services, underwriting review services, legal and accounting services, and all other services (including transfer agent and registrar services) as may be required
relating to the Company's operations or investments (or potential investments); 


      (viii)  coordinating
and managing operations of any joint venture or co-investment interests held by the Company and conducting all matters with the joint venture
or co investment partners; 


        (ix)  providing
executive and administrative personnel, office space and office services required in rendering services to the Company; 



         (x)  administering
the day-to-day operations and performing and supervising the performance of such other administrative functions necessary to the
Company's management as may be agreed upon by the Manager and the Board, including the collection of revenues and the payment of the 



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Company's
debts and obligations and maintenance of appropriate computer services to perform such administrative functions; 



        (xi)  communicating
on the Company's behalf with the holders of any of the Company's equity or debt securities as required to satisfy the reporting and other requirements of
any governmental bodies or agencies or trading markets and to maintain effective relations with such holders, including website maintenance, logo design, analyst presentations, investor conferences
and annual meetings arrangements; 


       (xii)  counseling
the Company in connection with policy decisions to be made by the Board; 


      (xiii)  evaluating
and recommending to the Board hedging strategies and engaging in hedging activities on the Company's behalf, consistent with such strategies as so modified
from time to time, with the Company's qualification as a REIT and with the Investment Guidelines; 


      (xiv)  counseling
the Company regarding the maintenance of the Company's qualification as a REIT and monitoring compliance with the various REIT qualification tests and other
rules set out in the Code and Treasury Regulations thereunder and using commercially reasonable efforts to cause the Company to qualify for taxation as a REIT; 


       (xv)  counseling
the Company regarding the maintenance of the Company's exemption from the status of an investment company required to register under the Investment Company
Act, monitoring compliance with the requirements for maintaining such exemption and using commercially reasonable efforts to cause the Company to maintain such exemption from such status; 


      (xvi)  furnishing
reports and statistical and economic research to the Company regarding the Company's activities and services performed for the Company by the Manager; 


     (xvii)  monitoring
the operating performance of the Company's investments and providing periodic reports with respect thereto to the Board, including comparative information
with respect to such operating performance and budgeted or projected operating results; 


    (xviii)  investing
and reinvesting any monies and securities of the Company (including investing in short-term investments pending investment in other
investments, payment of fees, costs and expenses or payments of dividends or distributions to the Company's stockholders, partners or members) and advising the Company as to the Company's capital
structure and capital raising; 


      (xix)  causing
the Company to retain qualified accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures and systems, internal
controls and other compliance procedures and testing systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to REITs and, if applicable,
taxable REIT subsidiaries, and to conduct quarterly compliance reviews with respect thereto; 


       (xx)  assisting
the Company in qualifying to do business in all applicable jurisdictions and to obtain and maintain all appropriate licenses; 


      (xxi)  assisting
the Company in complying with all regulatory requirements applicable to the Company in respect of the Company's business activities, including preparing or
causing to be prepared all financial statements required under applicable regulations and contractual undertakings and all reports and documents, if any, required under the Exchange Act or the
Securities Act, or by the NYSE; 


     (xxii)  assisting
the Company in taking all necessary action to enable the Company to make required tax filings and reports, including soliciting information from
stockholders, partners or members to the extent required by the provisions of the Code applicable to REITs; 



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    (xxiii)  placing,
or arranging for the placement of, all orders pursuant to the Manager's investment determinations for the Company either directly with the issuer or with a
broker or dealer (including any affiliated broker or dealer); 


    (xxiv)  handling
and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the
Company may be involved or to which the Company may be subject arising out of the Company's day-to-day operations (other than with the Manager or its Affiliates), subject to
such limitations or parameters as may be imposed from time to time by the Board; 


      (xxv)  using
commercially reasonable efforts to cause expenses incurred by the Company or on the Company's behalf to be commercially reasonable or commercially customary and
within any budgeted parameters or expense guidelines set by the Board from time to time; 


    (xxvi)  advising
the Company with respect to and structuring long-term financing vehicles for the Company's portfolio of assets, and offering and selling
securities publicly or privately in connection with any such structured financing; 


   (xxvii)  serving
as the Company's consultant with respect to decisions regarding any of the Company's financings, hedging activities or borrowings undertaken by the Company,
including (A) assisting the Company in developing criteria for debt and equity financing that is specifically tailored to the Company's investment objectives, and (B) advising the
Company with respect to obtaining appropriate financing for the Company's investments; 


  (xxviii)  providing
the Company with Portfolio Management Services and Monitoring Services; 


     (xxix)  arranging
marketing materials, advertising, industry group activities (such as conference participations and industry organization memberships) and other promotional
efforts designed to promote the Company's business; 


      (xxx)  using
commercially reasonable efforts to cause the Company to comply with all applicable laws; and 



     (xxxi)  performing
such other services as may be required from time to time for management and other activities relating to the Company's assets and business as the Board
shall reasonably request or the Manager shall deem appropriate under the particular circumstances. 




        (c)   The
Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of the persons and firms referred to in Section 7(a)
hereof as the Manager deems necessary or advisable in connection with the management and operations of the Company; provided that any such agreement shall be on terms and conditions substantially
identical to the terms and conditions of this Agreement or otherwise not adverse to the Company. In performing its duties under this Section 2, the Manager shall be entitled to rely reasonably
on qualified experts and professionals (including accountants, legal counsel and other professional service providers) hired by the Manager at the Company's sole cost and expense. In addition, the
Manager is hereby authorized to enter into one or more sub-advisory agreements with other investment managers (each, a
"Sub-Manager") pursuant to which the Manager may obtain the services of the Sub-Manager(s) to assist the Manager in providing
the investment advisory services required to be provided by the Manager under Section 2(a) hereof. Specifically, the Manager may retain a Sub-Manager to recommend specific
securities or other investments based upon the Company's Investment Guidelines, and work, along with the Manager, in structuring, negotiating, arranging or effecting the acquisition or disposition of
such investments and monitoring investments on behalf of the Company, subject to the oversight of the Manager and the Company. The Manager, and not the Company, shall be responsible for any
compensation payable to any Sub-Manager. Any sub-management agreement entered into by 


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the
Manager shall be in accordance with applicable laws. Nothing in this subsection (c) will obligate the Manager to pay any expenses that are the expenses of the Company under Section 2
hereof. 


        (d)   The
Manager shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Guidelines,
(ii) would adversely and materially affect the qualification of the Company as a REIT under the Code or the Company's status as an entity intended to be exempted or excluded from investment
company status under the Investment Company Act, or (iii) would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or of any exchange on
which the securities of the Company may be listed or that would otherwise not be permitted by the applicable Governing Instruments. If the Manager is ordered to take any action by the Board, the
Manager shall promptly notify the Board if it is the Manager's judgment that such action would adversely and materially affect such status or violate any such law, rule or regulation or Governing
Instruments. Notwithstanding the foregoing, neither the Manager nor any of its Affiliates, nor any of their members, stockholders, managers, partners, personnel, officers, directors, employees,
consultants and any person providing sub-advisory services to the Manager shall be liable to the Company, the Board, or the Company's stockholders, partners or members, for any act or
omission by the Manager or any of its Affiliates, except as provided in Section 7(d) hereof. 



        (e)   The
Company (including the Board) agrees to take all actions reasonably required to permit and enable the Manager to carry out its duties and obligations under this
Agreement, including all steps reasonably necessary to allow the Manager to file any registration statement or other filing required to be made under the Securities Act, Exchange Act, the NYSE's
Listed Company Manual, Code or other applicable law, rule or regulation on behalf of the Company in a timely manner. The Company further agrees to use commercially reasonable efforts to make available
to the Manager all resources, information and materials reasonably requested by the Manager to enable the Manager to satisfy its obligations hereunder, including its obligations to prepare, or cause
to be prepared, required financial statements or other information or reports with respect to the Company. 



        (f)    As
frequently as the Manager may deem necessary or advisable, or at the direction of the Board, the Manager shall prepare, or, at the sole cost and expense of the
Company, cause to be prepared, any reports and other information relating to any proposed or consummated investment as may be reasonably requested by the Company. 


        (g)   The
Manager shall prepare, or cause to be prepared, at the sole cost and expense of the Company, all reports, financial or otherwise, with respect to the Company
reasonably required by the Board in order for the Company to comply with its Governing Instruments, or any other materials required to be filed with any governmental body or agency, and shall prepare,
or cause to be prepared, at the sole cost and expense of the Company, all materials and data necessary to complete such reports and other materials, including an annual audit of the Company's books of
account by a nationally recognized independent accounting firm. 


        (h)   The
Manager shall prepare, or cause to be prepared, at the sole cost and expense to the Company, regular reports for the Board to enable the Board to review the
Company's acquisitions, portfolio composition and characteristics, credit quality, performance and compliance with the Investment Guidelines and policies approved by the Board. 


        (i)    Officers,
employees, personnel and agents of the Manager and its Affiliates may serve as directors, officers, agents, nominees or signatories for the Company, to the
extent permitted by their Governing Instruments, by this Agreement or by any resolutions duly adopted by the Board. When executing documents or otherwise acting in such capacities for the Company,
such persons shall indicate in what capacity they are executing on behalf of the Company. Without limiting the foregoing, while this Agreement is in effect, the Manager will provide the Company with a
management team, including a Chief Executive Officer and/or President or similar positions along with appropriate support personnel, to provide the management services to be provided by the Manager to
the Company hereunder, who shall devote such of their time to the management of the Company as necessary and appropriate, commensurate with the level of activity of the Company from time to time. 


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        (j)    The
Manager shall have the power and authority on behalf of the Company to effect investment decisions for the Company, including the execution and delivery of all
documents relating to the Company's investments and the placing of orders for other purchase or sale transactions on behalf of the Company. In the event that the Company determines to incur debt
financing, the Manager will arrange for such financing on the Company's behalf, subject to the oversight and approval of the Board. If it is necessary for the Manager to make investments on behalf of
the Company through a special purpose vehicle, the Manager shall have authority to create or arrange for the creation of such special purpose vehicle and to make such investments through such special
purpose vehicle in accordance with the Investment Guidelines. 


        (k)   The
Manager, at its sole cost and expense, shall provide personnel for service on the Underwriting Committee and the Investment Committee. 


        (l)    The
Manager, at its sole cost and expense, shall maintain reasonable and customary "errors and omissions" insurance coverage and other customary insurance coverage in
respect of its obligations and activities under, or pursuant to, this Agreement. 


        (m)  The
Manager acknowledges receipt of the Company's Code of Business Conduct and Ethics and Policy on Insider Trading agrees to require the Persons who provide services to
the Company to comply with the Code of Business Conduct and Ethics and the Policy on Insider Trading in the performance of such services hereunder or such comparable policies as shall in substance
hold such Persons to at least the standards of conduct set forth in the Code of Business Conduct and Ethics and the Policy on Insider Trading. 


        Section 3.    Additional Activities of the Manager; Non-Solicitation; Restrictions.


        (a)   Except
as provided in the last sentence of this Section 3(a) and/or the Investment Guidelines, nothing in this Agreement shall (i) prevent the Manager or
any of its Affiliates, officers, directors or employees, from engaging in other businesses or from rendering services of any kind to any other Person or entity, whether or not the investment
objectives or policies of any such other Person or entity are similar to those of the Company, (ii) in any way bind or restrict the Manager or any of its Affiliates or any of their members,
stockholders, managers, partners, personnel, officers, directors, employees or consultants from buying, selling or trading any securities or commodities for their own accounts or for the account of
others for whom the Manager or any of its Affiliates, or any of their members, stockholders, managers, partners, personnel, officers, directors, employees or consultants may be acting,
(iii) obligate the Manager to dedicate any of its officers or personnel exclusively to the Company or (iv) obligate the Company's officers to dedicate any specific portion of their time
to the Company's business. While information and recommendations supplied to the Company shall, in the Manager's reasonable and good faith judgment, be appropriate under the circumstances and in light
of the investment objectives and policies of the Company, they may be different from the information and recommendations supplied by the Manager or any Affiliate of the Manager to others. The Company
shall be entitled to equitable treatment under the circumstances in receiving information, recommendations and any other services, but the Company recognizes that it is not entitled to receive
preferential treatment as compared with the treatment given by the Manager or any Affiliate of the Manager to others. The Company shall have the benefit of the Manager's best judgment and effort in
rendering services hereunder and, in furtherance of the foregoing, the Manager shall not undertake activities that, in its good faith judgment, will adversely affect the performance of its obligations
under this Agreement. Notwithstanding anything to the contrary herein, for so long as the Manager is managing the Company pursuant to this Agreement, neither it nor any of its Affiliates will sponsor
or manage any other U.S. publicly traded REIT that invests primarily in the Target Investments (taken as a whole). 


10







 

        (b)   In
the event of a Termination Without Cause of this Agreement by the Company pursuant to Section 10(b) hereof, for two years after such termination of this
Agreement, the Company shall not, without the consent of the Manager, employ or otherwise retain any employee of the Manager or any of its Affiliates or any person who has been employed by the Manager
or any of its Affiliates at any time within the two-year period immediately preceding the date on which such person commences employment with or is otherwise retained by the Company. The
Company acknowledges and agrees that, in addition to any damages, the Manager shall be entitled to equitable relief for any violation of this Section 3(b) by the Company, including injunctive
relief. If any person who is a member, stockholder, manager, partner, personnel, officer, director or employee of the Manager or any of its Affiliates or provides sub-advisory services to
the Manager is or becomes a director, officer and/or employee of the Company and acts as such in any business of the Company, then such member, stockholder, manager, partner, personnel, officer,
director and/or employee of the Manager or its Affiliate or person providing sub-advisory services to the Manager shall be deemed to be acting in such capacity solely for the Company, and
not as a member, stockholder, manager, partner, personnel, officer, director or employee of the Manager or its Affiliate, a person providing sub-advisory services to the Manager or under
the control or direction of the Manager or its Affiliate, even if paid by the Manager or its Affiliate. 


        Section 4.    Bank Accounts.    At the direction of the Board, the Manager may establish and maintain one or
more bank accounts in the name of the Company (any such account, a "Company Account"), and may collect and deposit into any such account or accounts, and disburse funds from any such account or
accounts, under such terms and conditions as the Board may approve; and the Manager shall from time to time render appropriate accountings of such collections and payments to the Board and, upon
request, to the auditors of the Company. 


        Section 5.    Records; Confidentiality.


        The
Manager shall maintain appropriate books of accounts and records relating to services performed hereunder, and such books of account and records shall be accessible for inspection by
representatives of the Company at any time during normal business hours upon reasonable advance notice. The Manager shall keep confidential any and all non-public information, written or
oral, obtained by it in connection with the services rendered hereunder ("Confidential Information") and shall not use Confidential Information except
in furtherance of its duties under this Agreement or disclose Confidential Information, in whole or in part, to any Person other than (a) to its Affiliates, (b) to its and its
Affiliates' members, stockholders, managers, partners, personnel, officers, directors, employees, consultants, agents, representatives or advisors who need to know such Confidential Information,
(c) to appraisers, financing sources and others in the ordinary course of the Company's business ((a), (b) and (c) collectively, "Manager Permitted
Disclosure Parties"), (d) in connection with any governmental or regulatory filings of the Company or disclosure or presentations to Company investors (subject to
compliance with Regulation FD), (e) to governmental officials having jurisdiction over the Company, (f) as requested by law or legal process to which the Manager or any Person to
whom disclosure is permitted hereunder is a party or (g) with the consent of the Board. The Manager agrees to inform each of its Manager Permitted Disclosure Parties of the
non-public nature of the Confidential Information and instruct the Manager Permitted Disclosure Parties to keep such information confidential. Nothing herein shall prevent the Manager from
disclosing Confidential Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of, or pursuant to any law or regulation to, any regulatory
agency or authority, (iii) to the extent reasonably required in connection with the exercise of any remedy hereunder, or (iv) to its legal counsel or independent auditors;  provided,
however, that with respect to clauses (i) and (ii), it is agreed that, so long as not
legally prohibited, the Manager will provide the Company with prompt written notice of such order, request or demand so that the Company may seek, at its sole expense, an 


11







 

appropriate
protective order and/or waive the Manager's compliance with the provisions of this Agreement. If, failing the entry of a protective order or the receipt of a waiver hereunder, the Manager
is required to disclose Confidential Information, the Manager may disclose only that portion of such information that is legally required without liability hereunder;  provided, that the Manager agrees
to exercise its commercially reasonable efforts to obtain reliable assurance that confidential treatment will be
accorded such information. Notwithstanding anything herein to the contrary, each of the following shall be deemed to be excluded from provisions hereof: any Confidential Information that (A) is
available to the public from a source other than the Manager; (B) is released by the Company to the public or to Persons who are not under similar obligation of confidentiality to the Company;
or (C) is obtained by the Manager from a third party that, to the best of the Manager's knowledge, has not breached an obligation of confidence with respect to the Confidential Information
disclosed. The provisions of this Section 5 shall survive the expiration or earlier termination of this Agreement for a period of one year. 


        Section 6.    Compensation.


        (a)   For
the services rendered under this Agreement, the Company shall pay the Base Management Fee and the Incentive Compensation to the Manager. The Manager will not receive
any compensation for the period prior to the Closing Date other than expenses incurred and reimbursed pursuant to Section 7 hereof. The Manager and the Company acknowledge the obligation of the
Manager to pay to the underwriters of the Initial Public Offering the underwriting fee set forth in the Underwriting Agreement (the "Underwriting Fee"). 


        (b)   The
parties acknowledge that the Base Management Fee is intended to compensate the Manager for certain expenses it will incur pursuant to this Agreement that are not
otherwise reimbursable under Section 7 hereof, in order for the Manager to provide the Company the investment advisory services and certain general management services rendered under this
Agreement. 


        (c)   The
Base Management Fee shall be payable in arrears in cash, in quarterly installments commencing with the quarter in which this Agreement is executed. If applicable,
the initial and final installments of the Base Management Fee shall be prorated based on the number of days during the initial and final quarter, respectively, that this Agreement is in effect. The
Manager shall calculate each quarterly installment of the Base Management Fee, and deliver such calculation to the Company, for informational purposes only and subject in any event to
Section 10(b) of this Agreement, within 30 days following the last day of each fiscal quarter. The Company shall pay the Manager each installment of the Base Management Fee in cash
within five Business Days after the date of delivery to the Company of such computations. 


        (d)   The
Base Management Fee is subject to adjustment pursuant to and in accordance with the provisions of Section 10(c) of this Agreement. 


        (e)   The
Incentive Compensation shall be payable in arrears, in quarterly installments commencing with the quarter in which this Agreement is executed. The Manager shall
compute each quarterly installment of the Incentive Compensation within 45 days after the end of the fiscal quarter with respect to which such installment is payable. A copy of the computations
made by the Manager to calculate such installment shall thereafter, for informational purposes only and subject in any event to Section 10(b) of this Agreement, promptly be delivered to the
Board. The Company shall pay the Manager each installment of the Incentive Compensation in cash within five Business Days after the date of delivery to the Board of such computations. 


        Section 7.    Expenses of the Company.


        (a)   The
Company shall pay all of its costs and expenses and shall reimburse the Manager or its Affiliates for expenses of the Manager and its Affiliates incurred on behalf
of the Company, excepting 


12







 

only
the Underwriting Fee and those expenses that are specifically the responsibility of the Manager pursuant to this Section 7. Without limiting the generality of the foregoing, it is
specifically agreed that the following costs and expenses of the Company shall be paid by the Company and shall not be paid by the Manager or Affiliates of the Manager: 



          (i)  expenses
in connection with the issuance and transaction costs incident to the origination, acquisition, disposition and financing of the investments of the Company; 


         (ii)  costs
of legal, financial, tax, accounting, servicing, due diligence, consulting, auditing and other similar services rendered for the Company by providers retained by
the Manager or, if provided by the Manager's personnel, in amounts that are no greater than those that would be payable to outside professionals or consultants engaged to perform such services
pursuant to agreements negotiated on an arm's-length basis; 


        (iii)  the
compensation and expenses of the Company's directors, the cost of liability insurance to indemnify the Company's directors and officers and the Company's allocable
portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premium; 


        (iv)  costs
associated with the establishment and maintenance of any of the Company's credit facilities, other financing arrangements, or other indebtedness of the Company
(including commitment fees, accounting fees, legal fees, closing and other similar costs) or any of the Company's securities offerings; 



         (v)  expenses
connected with communications to holders of the Company's securities and other bookkeeping and clerical work necessary in maintaining relations with holders of
such securities and in complying with the continuous reporting and other requirements of governmental bodies or agencies, including all costs of preparing and filing required reports with the SEC, the
costs payable by the Company to any transfer agent and registrar in connection with the listing and/or trading of the
Company's securities on any exchange, the fees payable by the Company to any such exchange in connection with its listing, costs of preparing, printing and mailing the Company's annual report to the
Company's stockholders, partners or members and proxy materials with respect to any meeting of the Company's stockholders, partners or members; 



        (vi)  costs
associated with any computer software or hardware, electronic equipment or purchased information technology services from third-party vendors that is used for the
Company; 


       (vii)  expenses
incurred by managers, officers, personnel and agents of the Manager for travel on the Company's behalf and other out-of-pocket
expenses incurred by managers, officers, personnel and agents of the Manager in connection with the services provided hereunder, including in connection with any purchase, financing, refinancing, sale
or other disposition of an investment or establishment and maintenance of any of the Company's securitizations or any of the Company's securities offerings; 



      (viii)  costs
and expenses incurred with respect to market information systems and publications, research publications and materials, and settlement, clearing and custodial
fees and expenses; 


        (ix)  compensation
and expenses of the Company's custodian and transfer agent, if any; 


         (x)  the
costs of maintaining compliance with all federal, state and local rules and regulations or any other regulatory agency; 


        (xi)  all
federal, state and local taxes and license fees; 


       (xii)  all
insurance costs incurred in connection with the operation of the Company's business except for the costs attributable to the insurance that the Manager elects to
carry for itself and its personnel; 



13







 

      (xiii)  costs
and expenses incurred in contracting with third parties; 


      (xiv)  all
other costs and expenses relating to the Company's business and investment operations, including the costs and expenses of originating, acquiring, owning,
protecting, maintaining, developing and disposing of investments, including appraisal, reporting, audit and legal fees; 


       (xv)  expenses
(including the Company's pro rata portion of rent, telephone, printing, mailing, utilities, office furniture, equipment, machinery and other office, internal
and overhead expenses) relating to any office(s) or office facilities, including disaster backup recovery sites and facilities, maintained for the Company or the investments of the Company, the
Manager or their Affiliates required for the operation of the Company; 


      (xvi)  expenses
connected with the payments of interest, dividends or distributions in cash or any other form authorized or caused to be made by the Board to or on account of
holders of the Company's securities, including in connection with any dividend reinvestment plan; 


     (xvii)  any
judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company, or against any trustee, director, partner,
member or officer of the Company in his capacity as such for which the Company is required to indemnify such trustee, director, partner, member or officer by any court or governmental agency; 



    (xviii)  expenses
connected with calculating Core Earnings (including the cost and expenses of any independent valuation firm); and 


      (xix)  all
other expenses actually incurred by the Manager (except as otherwise specified herein) that are reasonably necessary for the performance by the Manager of its
duties and functions under this Agreement. 




        (b)   The
Company shall have no obligation to reimburse the Manager or its Affiliates for the salaries and other compensation of the Manager's investment professionals who
provide services to the Company under this Agreement, except that the Company shall reimburse the Manager or its Affiliates, as applicable, for the Company's allocable share of the compensation,
including annual base salary, bonus, any related withholding taxes and employee benefits, paid to (i) the Manager's personnel serving as the Company's chief financial officer based on the
percentage of his or her time spent managing the Company's affairs and (ii) other corporate finance, tax, accounting, internal audit, legal, risk management, operations, compliance and other
non-investment personnel of the Manager and its Affiliates who spend all or a portion of their time managing the Company's affairs. The Company's share of such costs shall be based upon
the percentage of time devoted by such personnel of the Manager or its Affiliates to the Company's affairs. The Manager shall provide the Company with such written detail as the Company may reasonably
request to support the determination of the Company's share of such costs. 



        (c)   The
Manager may, at its option, elect not to seek reimbursement for certain expenses during a given quarterly period, which determination shall not be deemed to construe
a waiver of reimbursement for similar expenses in future periods. 


        (d)   Costs
and expenses incurred by the Manager on behalf of the Company shall be reimbursed monthly to the Manager. The Manager shall prepare a written statement in
reasonable detail documenting the costs and expenses of the Company and those incurred by the Manager on behalf of the Company during each month, and shall deliver such written statement to the
Company within 30 days after the end of each month. The Company shall pay all amounts payable to the Manager pursuant to this Section 7(d) in cash within five Business Days after the
receipt of the written statement without demand, deduction offset or delay. Cost and expense reimbursements to the Manager shall be subject to adjustment at the end of each calendar year in connection
with the annual 


14







 

audit
of the Company. The provisions of this Section 7 shall survive the expiration or earlier termination of this Agreement to the extent such expenses have previously been incurred or are
incurred in connection with such expiration or termination. 


        (e)   Notwithstanding
anything contained in this Agreement to the contrary, except to the extent that the payment of additional monies is proven by the Company to have been
required as a direct result of the Manager's acts or omissions that result in the right of the Company to terminate this Agreement pursuant to Section 12 of this Agreement, the Manager shall
not be required to expend money ("Excess Funds") in connection with any expenses that are required to be paid for or reimbursed by the Company pursuant to this Agreement in excess of that contained in
any applicable Company Account (as herein defined) or otherwise made available by the Company to be expended by the Manager hereunder. Failure of the Manager to expend Excess Funds
out-of-pocket shall not give rise or be a contributing factor to the right of the Company under Section 10(b) of this Agreement to terminate this Agreement due to the
Manager's unsatisfactory performance. 


        Section 8.    Limits of the Manager's Responsibility.


        (a)   The
Manager assumes no responsibility under this Agreement other than to render the services called for hereunder in good faith and shall not be responsible for any
action of the Board in following or declining to follow any advice or recommendations of the Manager, including as set forth in the Investment Guidelines. The Manager and its Affiliates, and any of
their members, stockholders, managers, partners, personnel, officers, directors, employees, consultants and any person providing sub-advisory services to the Manager, will not be liable to
the Company, the Board or the Company's stockholders, partners or members for any acts or omissions by any such Person (including errors that may result from ordinary negligence, such as errors in the
investment decision making process or in the trade process) performed in accordance with and pursuant to this Agreement, except by reason of acts or omission constituting bad faith, willful
misconduct, gross negligence or reckless disregard of their respective duties under this Agreement, as determined by a final non-appealable order of a court of competent jurisdiction. The
Company shall, to the full extent lawful, reimburse, indemnify and hold harmless the Manager, its Affiliates, and any of their members, stockholders, managers, partners, personnel, officers,
directors, employees, consultants and any person providing sub-advisory services to the Manager (each, a "Manager Indemnified Party"), of
and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys' fees and amounts reasonably paid in settlement)
(collectively "Losses") incurred by the Manager Indemnified Party in or by reason of any pending, threatened or completed action, suit, investigation or
other proceeding (including an action or suit by or in the right of the Company or its security holders) arising from any acts or omissions of such Manager Indemnified Party performed in good faith
under this Agreement and not constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of such Manager Indemnified Party under this Agreement. 



        (b)   The
Manager shall, to the full extent lawful, reimburse, indemnify and hold harmless the Company, and the directors, officers, stockholders, partners or members of the
Company and each Person, if any, controlling the Company (each, a "Company Indemnified Party" and, together with a Manager Indemnified Party, an
"Indemnified Party") of and from any and all Losses in respect of or arising from (i) any acts or omissions of the Manager constituting bad
faith, willful misconduct, gross negligence or reckless disregard of duties of the Manager under this Agreement or (ii) any claims by the Manager's employees relating to the terms and
conditions of their employment by the Manager. 


        (c)   In
case any such claim, suit, action or proceeding (a "Claim") is brought against any Indemnified Party in respect of
which indemnification may be sought by such Indemnified Party pursuant hereto, the Indemnified Party shall give prompt written notice thereof to the indemnifying party;  provided, however, that the failure of the Indemnified Party to so notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have hereunder, except to the 


15







 

extent
such failure actually materially prejudices the indemnifying party. Upon receipt of such notice of Claim (together with such documents and information from such Indemnified Party), the
indemnifying party shall, at its sole cost and expense, in good faith defend any such Claim with counsel reasonably satisfactory to such Indemnified Party. The Indemnified Party will be entitled to
participate but, subject
to the next sentence, not control, the defense of any such action, with its own counsel and at its own expense. Such Indemnified Party may elect to conduct the defense of the Claim, if (i) such
Indemnified Party reasonably determines that the conduct of its defense by the indemnifying party could be materially prejudicial to its interests, (ii) the indemnifying party refuses to assume
such defense (or fails to give written notice to the Indemnified Party within ten (10) days of receipt of a notice of Claim that the indemnifying party assumes such defense), or
(iii) the indemnifying party shall have failed, in such Indemnified Party's reasonable judgment, to defend the Claim in good faith. The indemnifying party may settle any Claim against such
Indemnified Party without such Indemnified Party's consent, provided, that (i) such settlement is without any Losses whatsoever to such
Indemnified Party, (ii) the settlement does not include or require any admission of liability or culpability by such Indemnified Party and (iii) the indemnifying party obtains an
effective written release of liability for such Indemnified Party from the party to the Claim with whom such settlement is being made, which release must be reasonably acceptable to such Indemnified
Party, and a dismissal with prejudice with respect to all claims made by the party against such Indemnified Party in connection with such Claim. The applicable Indemnified Party shall reasonably
cooperate with the indemnifying party, at the indemnifying party's sole cost and expense, in connection with the defense or settlement of any Claim in accordance with the terms hereof. If such
Indemnified Party is entitled pursuant to this Section 8 to elect to defend such Claim by counsel of its own choosing and so elects, then the indemnifying party shall be responsible for any
good faith settlement of such Claim entered into by such Indemnified Party. Except as provided in the immediately preceding sentence, no Indemnified Party may pay or settle any Claim and seek
reimbursement therefor under this Section 8. 


        (d)   The
provisions of this Section 8 shall survive the expiration or earlier termination of this Agreement. 


        Section 9.    No Joint Venture.    The Company and the Manager are not partners or joint venturers with each
other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them. 



        Section 10.    Term; Renewal; Termination Without Cause.


        (a)   This
Agreement shall become effective on the Closing Date and shall continue in operation, unless terminated in accordance with the terms hereof, until the third
anniversary of the Closing Date (the "Initial Term"). After the Initial Term, this Agreement shall be deemed renewed automatically each year for an
additional one-year period (an "Automatic Renewal Term") unless the Company or the Manager elects not to renew this Agreement in accordance
with Section 10(b) or Section 10(d), respectively. 


        (b)   Notwithstanding
any other provision of this Agreement to the contrary, upon the expiration of the Initial Term or any Automatic Renewal Term and upon 180 days'
prior written notice to the Manager (the "Termination Notice"), the Company may, without cause, in connection with the expiration of the Initial Term or
the then current Automatic Renewal Term, decline to renew this Agreement (any such nonrenewal, a "Termination Without Cause") upon the affirmative vote
of at least two-thirds of the Independent Directors that (i) there has been unsatisfactory performance by the Manager that is materially detrimental to the Company taken as a whole
or (ii) the Base Management Fee and Incentive Compensation payable to the Manager are not fair, subject to Section 10(c) hereof. In the event of a Termination Without Cause, the Company
shall pay the Manager the Termination Fee before or on the last day of the Initial Term or such Automatic Renewal Term, as the case may be (the "Effective Termination
Date"). 


16









 



































 


        (c)   Notwithstanding
the provisions of subsection (b) of this Section 10, if the reason for nonrenewal specified in the Company's Termination Notice is that
2/3 of the Independent Directors have determined that the Base Management Fee or the Incentive Compensation payable to the Manager is unfair, the Company shall not have the foregoing
nonrenewal right in the event the Manager agrees that it will continue to perform its duties hereunder during the Automatic Renewal Term that would commence upon the expiration of the Initial Term or
then current Automatic Renewal Term at a fee that at least two thirds of the Independent Directors determine to be fair; provided,  however, the Manager
shall have the right to renegotiate the Base Management Fee and/or the Incentive Compensation, by delivering to the Company, not
less than 45 days prior to the pending Effective Termination Date, written notice (a "Notice of Proposal to Negotiate") of its intention to
renegotiate the Base Management Fee and/or the Incentive Compensation. Thereupon, the Company and the Manager shall endeavor to negotiate the Base Management Fee and/or the Incentive Compensation in
good faith. If the Company and the Manager agree to a revised Base Management Fee, Incentive Compensation or other compensation structure within 45 days following the Company's receipt of the
Notice of Proposal to Negotiate, the Termination Notice from the Company shall be deemed of no force and effect, and this Agreement shall continue in full force and effect on the terms stated herein,
except that the Base Management Fee, the Incentive Compensation or other compensation structure shall be the revised Base Management Fee, Incentive Compensation or other compensation structure as then
agreed upon by the Company and the Manager. The Company and the Manager agree to execute and deliver an amendment to this Agreement setting forth such revised Base Management Fee, Incentive
Compensation, or other compensation structure promptly upon reaching an agreement regarding same. In the event that the Company and the Manager are unable to agree to a revised Base Management Fee,
Incentive Compensation, or other compensation structure during such 45 day period, this Agreement shall terminate on the Effective Termination Date and the Company shall be obligated to pay the
Manager the Termination Fee upon the Effective Termination Date. 


        (d)   No
later than 180 days prior to the expiration of the Initial Term or the then current Automatic Renewal Term, the Manager may deliver written notice to the
Company informing it of the Manager's intention to decline to renew this Agreement, whereupon this Agreement shall not be renewed and extended and this Agreement shall terminate effective on the
anniversary date of this Agreement next following the delivery of such notice. The Company is not required to pay to the Manager the Termination Fee if the Manager terminates this Agreement pursuant
to this Section 10(d). 


        (e)   Except
as set forth in this Section 10, a nonrenewal of this Agreement pursuant to this Section 10 shall be without any further liability or obligation of
either party to the other, except as provided in Sections 3(b), 5, 7, 8. 10(b), 12(b), 13 and 15(e) hereof. 



        (f)    The
Manager shall cooperate with the Company in executing an orderly transition of the management of the Company's consolidated assets to a new manager. 


        Section 11.    Assignments.


        (a)    Assignments by the Manager.    This Agreement shall terminate automatically without payment of the Termination
Fee in the event of its assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company with the approval of a majority of the Independent Directors.
Any permitted assignment (including to an Affiliate of the Manager as set forth below) shall bind the assignee under this Agreement in the same manner as the Manager is bound, and the Manager shall be
liable to the Company for all errors or omissions of the assignee under any such assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming
such assignee as the Manager. Notwithstanding anything to the contrary in this Agreement, the Manager may, without the approval of the Company's Independent Directors, (i) assign this Agreement
to an Affiliate of the Manager and (ii) delegate to one or more of its Affiliates the performance of any of its responsibilities hereunder so long as it remains liable for any such Affiliate's 


17







 

performance,
in each case so long as assignment or delegation does not require the Company's approval under the Investment Company Act (but if such approval is required, the Company shall not
unreasonably withhold, condition or delay its consent). Nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this
Agreement. 


        (b)    Assignments by the Company.    This Agreement shall not be assigned by the Company without the prior written
consent of the Manager, except in the case of assignment by the Company to another REIT or other organization which is a successor (by merger, consolidation, purchase of assets, or other transaction)
to the Company, in which case such successor organization shall be bound under this Agreement and by the terms of such assignment in the same manner as the Company is bound under this Agreement. 


        Section 12.    Termination for Cause.


        (a)   The
Company may terminate this Agreement effective upon 30 days' prior written notice of termination from the Company to the Manager, without payment of any
Termination Fee, if (i) the Manager, its agents or its assignees breaches any material provision of this Agreement and such breach shall continue for a period of 30 days after written
notice thereof specifying such breach and requesting that the same be remedied in such 30-day period (or 45 days after written notice of such breach if the Manager takes steps to
cure such breach within 30 days of the written notice), (ii) there is a commencement of any proceeding relating to the Manager's Bankruptcy or insolvency, including an order for relief
in an involuntary bankruptcy case or the Manager authorizing or filing a voluntary bankruptcy petition, (iii) any Manager Change of Control occurs that a majority of the Independent Directors
determines is materially detrimental to the Company taken as a whole, (iv) the Manager is dissolved, or (v) the Manager commits fraud against the Company, misappropriates or embezzles
funds of the Company, or acts, or fails to act, in a manner constituting bad faith, willful misconduct, gross negligence or reckless disregard in the performance of its duties under this Agreement;  provided, however, that if any of the actions or omissions described in this clause (v) are
caused by an employee, personnel and/or officer of the Manager or one of its Affiliates and the Manager (or such Affiliate) takes all necessary and appropriate action against such person and cures the
damage caused by such actions or omissions within 30 days of the Manager's actual knowledge of its commission or omission, the Company shall not have the right to terminate this Agreement
pursuant to this Section 12(a)(v). 


        (b)   The
Manager may terminate this Agreement effective upon 60 days' prior written notice of termination to the Company in the event that the Company shall default in
the performance or observance of any material term, condition or covenant contained in this Agreement and such default shall continue for a period of 30 days after written notice thereof
specifying such default and requesting that the same be remedied in such 30-day period. The Company is required to pay to the Manager the Termination Fee if the termination of this
Agreement is made pursuant to this Section 12(b). 


        (c)   The
Manager, at its sole option, may terminate this Agreement if the Company becomes required to register as an investment company under the Investment Company Act, with
such termination deemed to occur immediately before such event, in which case the Company shall not be required to pay the Termination Fee. 


        Section 13.    Actions Upon Termination.    From and after the effective date of termination of this Agreement
pursuant to Sections 10, 11, or 12 hereof, the Manager shall not be entitled to compensation for further services hereunder, but shall be paid all compensation accruing to the date of
termination and, if terminated pursuant to Section 12(b) hereof or not renewed pursuant to 


18







 

Section 10(b)
hereof (subject to Section 10(c) hereof), the Termination Fee. Upon any such termination, the Manager shall forthwith: 


        (a)   after
deducting any accrued compensation and reimbursement for its expenses to which it is then entitled, pay over to the Company all money collected and held for the
account of the Company pursuant to this Agreement; 


        (b)   deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following
the date of the last accounting furnished to the Board with respect to the Company; and 


        (c)   deliver
to the Board all property and documents of the Company then in the custody of the Manager. 


        Section 14.    Release of Money or Other Property Upon Written Request.



        The
Manager agrees that any money or other property of the Company held by the Manager shall be held by the Manager as custodian for the Company, and the Manager's records shall be
appropriately and clearly marked to reflect the ownership of such money or other property by the Company. Upon the receipt by the Manager of a written request signed by a duly authorized officer of
the Company requesting the Manager to release to the Company any money or other property then held by the Manager for the account of the Company under this Agreement, the Manager shall release such
money or other property to the Company within a reasonable period of time, but in no event later than 60 days following such request. Upon delivery of such money or other property to the
Company, the Manager shall not be liable to the Company, the Board, or the Company's stockholders, partners or members for any acts or omissions by the Company in connection with the money or other
property released to the Company in accordance with this Section 14. The Company shall indemnify the Manager and its Affiliates, and any of their members, stockholders, managers, partners,
personnel, officers, directors, employees, consultants and any person providing sub-advisory services to the Manager against any and all Losses that arise in connection with the Manager's
proper release of such money or other property to the Company in accordance with the terms of this Section 14. Indemnification pursuant to this provision shall be in addition to any right of
the Manager and its Affiliates, and any of their members, stockholders, managers, partners, personnel, officers, directors, employees, consultants and any person providing sub-advisory
services to the Manager to indemnification under Section 7(d) hereof. 


        Section 15.    Miscellaneous.


        (a)    Notices.    All notices, requests and demands to or upon the respective parties hereto to be effective shall be
in writing (including by facsimile), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered against receipt or upon actual receipt of
(i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by facsimile transmission with telephonic confirmation or (iv) delivery by registered or
certified mail, postage 


19







 

prepaid,
return receipt requested, addressed as set forth below (or to such other address as may be hereafter notified by the respective parties hereto in accordance with this Section 15): 

 






			
	The Company:	 	Ares Commercial Real Estate Corporation

Two North LaSalle Street, Suite 925

Chicago, IL 60602

Attention: Chief Financial Officer

Fax: (312) 324-5901
	
 with a copy to:	
 	
Ares Commercial Real Estate Corporation

Two North LaSalle Street, Suite 925

Chicago, IL 60602

Attention: General Counsel

Fax: (312) 324-5901
	

 	
 	
Proskauer Rose LLP

2049 Century Park East, 32nd Floor

Los Angeles, CA 90067

Attention: Monica J. Shilling

Fax: (310) 557-2193
	
 The Manager:	
 	
Ares Commercial Real Estate Management LLC

Two North LaSalle Street, Suite 925

Chicago, IL 60602

Attention: President

Fax: (312) 324-5901
	
 with a copy to:	
 	
Ares Commercial Real Estate Management LLC

13760 Noel Road, 11th Floor

Dallas, Texas 75240

Attention: Timothy B. Smith

Fax: (214) 866-0115
	

 	
 	
Proskauer Rose LLP

2049 Century Park East, 32nd Floor

Los Angeles, CA 90067

Attention: Monica J. Shilling

Fax: (310) 557-2193




 

         (b)    Binding Nature of Agreement; Successors and Assigns.    This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein. 


        (c)    Integration.    This Agreement contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. 


        (d)    Amendments.    This Agreement, and any terms hereof, may not be amended, supplemented or modified except in an
instrument in writing executed by the parties hereto 


20







 

        (e)   GOVERNING
LAW.    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT
COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR THE PURPOSE OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF
VENUE IN SUCH COURT. 


        (f)    WAIVER
OF JURY TRIAL.    EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY
IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. 



        (g)    No Waiver; Cumulative Remedies.    No failure to exercise and no delay in exercising, on the part of a party
hereto, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law. No waiver of any provision hereunder shall be effective unless it is in writing and is signed by the party granting such waiver. 



        (h)    Section Headings.    The section and subsection headings in this Agreement are for convenience in reference
only and shall not be deemed to alter or affect the interpretation of any provisions hereof. 


        (i)    Counterparts.    This Agreement may be executed by the parties to this Agreement on any number of separate
counterparts (including by facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 



        (j)    Severability.    Any provision of this Agreement that 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. 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 


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        IN
WITNESS WHEREOF, each of the parties hereto has executed this Management Agreement as of the date first written above. 

 






					
	 	 	 Ares Commercial Real Estate Corporation
	

 	
 	
By:	
 	
 






  Name:

Title:
	

 	
 	
 Ares Commercial Real Estate Management LLC
	

 	
 	
By:	
 	
  






  Name:

Title:




 

 22


















































 
 

  Exhibit A    
    
    Investment Guidelines    
    


        1.     No
investment shall be made that would cause the Company to fail to qualify as a REIT under the Code. 



        2.     No
investment shall be made that would cause the Company to be regulated as an investment company under the Investment Company Act. 


        3.     The
Company's investments shall be in the Target Investments. 


        4.     Until
appropriate investments in the Target Investments are identified, the Manager may invest its available cash in interest-bearing, short-term investments,
including money market accounts or funds, commercial mortgage backed securities and corporate bonds, subject to the requirements for the Company's qualification as a REIT under the Code. 



        5.     All
investments by the Company require the approval of the Underwriting Committee and Investment Committee. 


        These
Investment Guidelines may be amended, restated, modified, supplemented or waived by the Board (which must include a majority of the Independent Directors) and the Investment
Committee without the approval of the Company's stockholders. 











QuickLinks



Exhibit 10.2


MANAGEMENT AGREEMENT BETWEEN ARES COMMERCIAL REAL ESTATE CORPORATION AND ARES COMMERCIAL REAL ESTATE MANAGEMENT LLC


Exhibit A Investment Guidelines