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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. 

9

 

 

        (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] 

21

 

        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 GuidelinesQuickLinks
 -- Click here to rapidly navigate through this document

 

 
 

  Exhibit 10.3    
    

 
    ARES COMMERCIAL REAL ESTATE CORPORATION
  
    2012 EQUITY INCENTIVE PLAN    
    

	1.
	PURPOSE.    The Plan is intended to provide equity-based incentives to outside directors, officers,
advisors, consultants, and key personnel of the Company and the other Participating Companies, and to the Manager and others expected to provide bona fide services to the Company and the other
Participating Companies to encourage a proprietary interest in the Company, to encourage such key personnel to remain in the service of the Company and the other Participating Companies, to attract
new personnel with outstanding qualifications, and to afford additional incentives to all such personnel to increase their efforts in providing significant services to the Company and the other
Participating Companies.

	2.
	DEFINITIONS.    As used in this Plan, the following definitions apply:

	(a)
	"Act" means the Securities Act of 1933, as amended.

	(b)
	"Award Agreement" means a written agreement evidencing a Grant.

	(c)
	"Board" means the Board of Directors of the Company.

	(d)
	"Capital Stock" means all classes or series of stock of the Company, including Common Stock and Preferred
Stock.

	(e)
	"Cause" means, unless otherwise provided in an applicable Award Agreement, a termination of employment or
service, based upon a finding by the Company, acting in good faith, after the occurrence of any of the following: (i) the Grantee is convicted of or charged with a criminal offense;
(ii) the Grantee's intentional violation of law in connection with any transaction involving the purchase, sale, loan or other disposition of, or the rendering of investment advice with respect
to, any security, futures or forward contract, insurance contract, debt instrument, financial instrument or currency; (iii) the Grantee's dishonesty, bad faith, gross negligence, willful
misconduct, fraud or willful or reckless disregard of duties in connection with the performance of any services on behalf of the Participating Companies or the Grantee's engagement in conduct that is
injurious to the Participating Companies, monetarily or otherwise; (iv) the Grantee's intentional failure to comply with any reasonable directive by a supervisor in connection with the
performance of any services on behalf of the Participating Companies; (v) the Grantee's intentional breach of any material provision of an Award Agreement or any other agreement with the
Participating Companies; (vi) the Grantee's material violation of any written policy adopted by the Participating Companies governing the conduct of persons performing services on behalf of the
Participating Companies, or the Grantee's material breach of the policies and procedures or other rules set forth in applicable compliance manuals of the Participating Companies; (vii) the
Grantee's taking of or omission to take any action that causes or substantially contributes to a material deterioration in the business or reputation of the Participating Companies, or that is
otherwise materially disruptive of their business or affairs; provided that the term "Cause" shall not include for this purpose any mistake of judgment
made in good faith with respect to any transaction respecting an investment made by the Participating Companies; (viii) the failure by the Grantee to devote a sufficient portion of time to
performing services on behalf of a Participating Company without the prior written consent of such Participating Company (other than by reason of death or Disability); (ix) the obtaining by the
Grantee of any material improper personal benefit as a result of a breach by the Grantee of any covenant or agreement (including a breach of any covenant, agreement, representation or warranty
contained in any limited partnership agreement); or (x) the Grantee's suspension or other 

1

 

disciplinary
action against the Grantee by an applicable regulatory authority; provided that if a failure, breach, violation or action or omission
described in any of clauses (iv) to (vii) is capable of being cured, the Grantee has failed to do so after being given notice and a reasonable opportunity to cure. 

	(f)
	"Cause Termination" means a Termination of Service for Cause, including resignation by an Eligible Person
within 60 days before or after an event that would be grounds for a Termination of Service for Cause.

	(g)
	"Change in Control" means unless otherwise provided in an Award Agreement the happening of any of the
following:

	(i)
	the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (A) the then outstanding shares of Common Stock (the
"Outstanding Company Stock") or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, that for purposes of this clause (i), the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company or the Manager; (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or the Manager or any
corporation or trust controlled by the Company or the Manager; and (C) any acquisition by any entity pursuant to a transaction that complies with subsections (A), (B) and
(C) of clause (iii) of this Section 2(g); or

	(ii)
	individuals
who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but
excluding, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

	(iii)
	consummation
of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding
Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding
common shares and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such
Business Combination (including a corporation that as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as
the case may be, and (B) no Person (excluding any corporation or trust resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or the Manager, or
such corporation or trust resulting from such Business Combination) 

2

 

beneficially
owns, directly or indirectly, 35% or more of the then outstanding shares of the corporation or trust resulting from such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation or trust except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the
board of directors of the corporation or trust resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or  

	(iv)
	approval
by the stockholders of the Company of a complete liquidation or dissolution of the Company and consummation of such transaction. 

Notwithstanding
the foregoing, no event or condition shall constitute a Change in Control to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code;  provided that, in such a case,
the event or condition shall continue to constitute a Change in Control to the maximum extent possible (e.g., if
applicable, in respect of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.  

	(h)
	"Code" means the Internal Revenue Code of 1986, as amended.

	(i)
	"Committee" means a committee or subcommittee of the Board as appointed by the Board in accordance with
Section 4; provided that, to the extent required by law, the Committee shall at all times consist of two or more persons who each qualify as
(i) a "non-employee director" under Rule 16b-3(b)(3)(i) promulgated under the Exchange Act, (ii) to the extent that relief from the limitation of
Section 162(m) of the Code is sought, as an "outside director" under Section 1.162-27(e)(3)(i) of the Treasury Regulations, and (iii) an "independent director" as
defined under Section 303A.02 of the New York Stock Exchange Listed Company Manual or other applicable stock exchange rules.

	(j)
	"Common Stock" means the Company's common stock, par value $0.01 per share, either currently existing or
authorized hereafter.

	(k)
	"Company" means Ares Commercial Real Estate Corporation, a Maryland corporation.

	(l)
	"Disability" means, unless otherwise provided by the Committee in the Grantee's Award Agreement, the
occurrence of an event that would entitle the Grantee to the payment of disability income under an approved long-term disability income plan or a long-term disability as
determined by the Committee in its absolute discretion pursuant to any other standard as may be adopted by the Committee. Notwithstanding the foregoing, no circumstances or condition shall constitute
a Disability to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that, in such a case, the event
or condition shall continue to constitute a Disability to the maximum extent possible (e.g., if applicable, in respect of vesting without an acceleration of distribution) without causing the
imposition of such 20% tax.

	(m)
	"Effective Date" has the meaning set forth in Section 3.

	(n)
	"Eligible Persons" means outside directors, officers, advisors, consultants and key employees of the
Participating Companies, the Manager, and others expected to provide bona fide services to one or more of the Participating Companies.

	(o)
	"Employee" means an individual who is employed (within the meaning of Section 3401(c) of the Code and
the regulations thereunder) by the Participating Company.

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

	(q)
	"Exercise Price" means the price per Share at which an Option may be exercised. 

3

 

	(r)
	"Fair Market Value" means the value of one Share, determined as follows:

	(i)
	If
the Shares are then listed on a national stock exchange, the average of the high and low trading price per Share on the exchange on the date immediately
prior to the date in question (or, if no such prices are available for such date, for the last preceding date on which there was a sale of Shares on such exchange).

	(ii)
	If
the Shares are not then listed on a national stock exchange but are then traded on an over-the-counter market, the average of
the closing bid and asked prices on the date in question for the Shares in such over-the-counter market (or, if no such average is available for such date, for the last
preceding date on which there was a sale of Shares in such market).

	(iii)
	If
neither (i) nor (ii) applies, such value as the Committee may in good faith determine. Notwithstanding the foregoing, where the Shares
are listed or traded, the Committee may make discretionary determinations in good faith where the Shares have not been traded for ten trading days. 

Notwithstanding
the foregoing, with respect to any "stock right" within the meaning of Section 409A of the Code, Fair Market Value shall be determined in connection with such "stock right" in
accordance with the final regulations promulgated under Section 409A of the Code.  

	(s)
	"Grant" means an Incentive Stock Option, Non-qualified Stock Option, Restricted Stock,
Restricted Stock Unit, or other equity-based award, or any combination thereof issued under the Plan.

	(t)
	"Grantee" means an Eligible Person who receives a Grant hereunder.

	(u)
	"Incentive Stock Option" means an Option of the type described in Section 422(b) of the Code granted
to an Employee of (i) the Company or (ii) a "subsidiary corporation" or a "parent corporation" as defined in Section 424 of the Code.

	(v)
	"Initial Share Reserve" has the meaning set forth in Section 6.

	(w)
	"IPO" means the first underwritten public offering of Common Stock pursuant to a registration statement on
Form S-11 under the Act.

	(x)
	"Manager" means Ares Commercial Real Estate Management LLC.

	(y)
	"Non-qualified Stock Option" means an Option that is not an Incentive Stock Option.

	(z)
	"Option" means any option, whether an Incentive Stock Option or a Non-qualified Stock Option, to
purchase Shares.

	(aa)
	"Optionee" means an Eligible Person to whom an Option is granted, or the Successors of the Optionee, as the
context so requires.

	(bb)
	"Participating Companies" means the Company, the Subsidiaries, the Manager and, with the consent of the
Committee, any of their respective affiliates and any joint venture affiliate of the Company.

	(cc)
	"Performance Goals" has the meaning set forth in Section 12.

	(dd)
	"Plan" means the Company's 2012 Equity Incentive Plan, as set forth herein, and as the same may from time
to time be amended.

	(ee)
	"Preferred Stock" means the Company's preferred stock, par value $0.01 per share, either currently existing
or authorized hereafter. 

4

 

 

	(ff)
	"Purchase Price" means the Exercise Price multiplied by the number of Shares with respect to which an
Option is exercised.

	(gg)
	"Restricted Stock" means Shares that are subject to a risk of forfeiture or to other restrictions.

	(hh)
	"Restricted Stock Unit" means the right to payment, in cash or Shares, of the Fair Market Value of a Share.

	(ii)
	"Shares" means shares of Common Stock of the Company, adjusted in accordance with Section 14 of the
Plan (if applicable).

	(jj)
	"Subsidiary" means any corporation, partnership, limited liability company or other entity more than 50% of
the economic interest in the equity of which is owned, directly or indirectly, by the Company or by another subsidiary.

	(kk)
	"Successors of the Optionee" means the legal representative of the estate of a deceased Optionee or the
person or persons who shall acquire the right to exercise an Option by bequest or inheritance or by reason of the death of the Optionee.

	(ll)
	"Termination of Service" means the time when the employee-employer relationship, directorship or other
service relationship (sufficient to constitute service as an Eligible Person) between the Grantee and all relevant Participating Companies is terminated for any reason. The Committee, in its absolute
discretion, shall determine the effects of all matters and questions relating to Termination of Service, including the question of whether any Termination of Service was for Cause and all questions of
whether particular leaves of absence constitute Terminations of Service. For this purpose, the service relationship shall be treated as continuing intact while the Grantee is on military leave, sick
leave or other bona fide leave of absence (to be determined in the discretion of the Committee) not in excess of six months.

	3.
	EFFECTIVE DATE.    The effective date of the Plan
is                                    , 2012 (the
"Effective Date"), the date upon which the Plan was adopted by the Board and approved by the requisite percentage of the holders of the Common Stock of
the Company.

	4.
	ADMINISTRATION.

	(a)
	Appointment of Committee.    The Board shall appoint a Committee to administer the Plan. If no
Committee is designated by the Board to act for those purposes or the Board otherwise so elects, the full Board shall have the rights and responsibilities of the Committee.

	(b)
	Committee Actions.    The acts of a majority of the members present at any meeting of the
Committee at which a quorum is present, or acts approved in writing by a majority of the entire Committee, shall be the acts of the Committee.

	(c)
	Grant of Awards.    The Committee shall from time to time at its discretion select the Eligible
Persons who are to receive Grants and determine the number and type of Grants to be awarded to an Eligible Person. In particular, the Committee shall (A) determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Grants awarded hereunder (including the Performance Goals and periods applicable to the award of Grants); (B) determine the time or times when
and the manner and condition in which each Option shall be exercisable; and (C) determine or impose other conditions on any Grant or on the exercise of Options as it may deem appropriate.
Unless expressly prohibited hereunder, the Committee, with respect to any Grant, may exercise its discretion hereunder at the time of the award or thereafter. The Grantee shall take whatever
additional actions and execute whatever additional documents the Committee may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the
Grantee pursuant to the provisions of the Plan and any Award Agreement. 

5

 

	(d)
	Award Agreements.    Grants shall be evidenced by written Award Agreements in such form as the
Committee shall from time to time determine (which Award Agreements need not be in the same form as any other Award Agreement and need not contain terms and conditions identical to those applicable to
any other Grant).

	(e)
	Committee Authority.    Without limiting the foregoing, subject to the terms and conditions of the
Plan and consistent with the Company's intention for the Committee to exercise the greatest permissible flexibility under Rule 16b-3 under the Exchange Act in awarding Grants, the
Committee shall have the power:

	(i)
	to
correct any defect, supply any omission or reconcile any inconsistency in the Plan, any Award Agreement, or any related agreement;

	(ii)
	to
amend any outstanding Grant if such amendment does not materially impair the Grantee's rights under such Grant, to accelerate the vesting or extend the
period of exercisability of any Grant (in compliance with Section 409A of the Code) or to waive conditions or restrictions on any Grant; provided
that the Exercise Price of an Option may not be lowered (except pursuant to Section 14), directly or indirectly, without stockholder approval;

	(iii)
	to
determine the circumstances, if any, upon which a Grant shall be subject to forfeiture in whole or in part as a result of a breach by the Grantee of a
provision or covenant (whether in the Plan, the Award Agreement, or any other agreement between the Grantee and a Participating Company) to which the Grantee is subject, or otherwise; and

	(iv)
	generally
to exercise such powers and to perform such acts as it shall deem necessary or expedient to promote the best interests of the Company with
respect to the Plan.

	(f)
	Committee Decisions Binding.    The Committee may establish rules, regulations and procedures for
the administration of the Plan and take any other actions and make any other determinations or decisions in connection with the Plan or the administration or interpretation thereof. The Committee
shall have the right and responsibility to interpret the Plan, and the interpretation and construction by the Committee of any provision of the Plan or of any Grant, including in the event of a
dispute, shall be final and binding on all Grantees and other persons. Without limiting the generality of Section 23, no member of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Grant.

	5.
	PARTICIPATION.

	(a)
	Eligibility.    Only Eligible Persons shall be eligible to receive Grants.

	(b)
	Limitation of Ownership.    No Grants shall be issued to any person who after such Grant would
beneficially own more than 9.8% in value of the aggregate outstanding shares of Capital Stock of the Company or 9.8% (in value or in number of shares, whichever is more restrictive) of any class or
series of shares of Capital Stock, unless the foregoing restriction is expressly and specifically waived by the Board. For purposes of this Section 5(b), a Grantee shall be considered as
beneficially owning the stock owned, directly or indirectly, that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the
Code. In addition, no Eligible Person will be permitted to acquire, or will have any right to acquire, Shares, if such acquisition would be prohibited by any share ownership limitations contained in
the charter or bylaws of the Company or would impair the Company's status as a real estate investment trust.

	6.
	STOCK.    Subject to adjustments pursuant to Section 14, no Grant may cause the total number
of shares of Common Stock subject to all outstanding awards to exceed 7.5% of the issued and 

6

 

outstanding
shares of Common Stock immediately after giving effect to the issuance of the shares sold in the IPO, including shares actually issued and sold pursuant to the underwriters' exercise of
their overallotment option but excluding grants of Common Stock-based awards under the Plan or any other equity plan of the Company (the "Initial Share
Reserve"). Subject to adjustments pursuant to Section 14, the maximum number of shares of Common Stock underlying Grants that may be awarded in any one year to any
Grantee is 250,000; provided, that the foregoing limit only shall apply at such times as Section 162(m) of the Code applies. Without limiting the
preceding sentence, the maximum number of shares of Common Stock with respect to which Options may be granted in any one year to any Grantee is 250,000;  provided, that the foregoing limit only shall
apply at such times as Section 162(m) of the Code applies. The maximum number of shares of Common
Stock with respect to which Incentive Stock Options may be granted over the life of the Plan is a number equal to the Initial Share Reserve. Notwithstanding the first sentence of this
Section 6, (a) Shares that have been granted as Restricted Stock or that have been reserved for distribution in payment for Options or Restricted Stock Units but are later forfeited or
for any reason or otherwise are not payable under the Plan, (b) Shares underlying an Option that remains unexercised at the expiration, forfeiture or other termination of such Option, and
(c) Shares underlying Restricted Stock Units that are settled in cash, may again be made subject to Grants. Shares of Common Stock issued hereunder may consist, in whole or in part, of
authorized and unissued shares, treasury shares, or Shares previously issued but forfeited under the Plan. The certificates for Shares issued hereunder may include any legend that the Committee deems
appropriate to reflect any restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate.  

	7.
	TERMS AND CONDITIONS OF OPTIONS.

	(a)
	Exercise Price.    Each Award Agreement evidencing an Option shall state the Exercise Price, which
shall not be less than the Fair Market Value on the date of Grant.

	(b)
	Vesting; Term.    Each Award Agreement evidencing on Option shall state the time or times at which
all or a part thereof becomes exercisable. The term of each Option shall be ten years (or such shorter term as set forth in the applicable Award Agreement), and in no event may an Option be exercised
after its term.

	(c)
	Payment of Purchase Price.    Except as may otherwise be provided below, the Purchase Price for
each Option granted to an Eligible Person shall be payable in full in United States dollars upon the exercise of the Option. In the event the Company determines that it is required to withhold taxes
as a result of the exercise of an Option, as a condition to the exercise thereof, an Employee may be required to make arrangements satisfactory to the Company to enable it to satisfy such withholding
requirements in accordance with Section 20. Notwithstanding the foregoing, the Committee may permit the Purchase Price to be paid in one or a combination of the
following:

	(i)
	by
a certified or bank cashier's check;

	(ii)
	by
the surrender of Shares owned by the person exercising the Option and having a Fair Market Value on the date of exercise equal to the Purchase Price;  provided, that the Grantee represents and warrants
to the Company that the Grantee holds the Shares free and clear of liens and encumbrances;

	(iii)
	by
reduction of the Shares issuable upon exercise of the Option;

	(iv)
	by
broker-assisted cashless exercise using a broker reasonably acceptable to the Company, pursuant to which the Grantee delivers to the Company, on or
prior to the exercise date, the Grantee's instruction directing and obligating the broker to (A) sell Shares (or a sufficient portion of the Shares) acquired upon exercise of the Option and
(B) remit to 

7

 

the
Company a sufficient portion of the sale proceeds to pay the Purchase Price, no later than the third trading day after the exercise date; or  

	(v)
	by
any combination of such methods of payment or any other method acceptable to the Committee. 

The
Committee may impose such limitations and prohibitions on the exercise of Options as it deems appropriate, including any limitation or prohibition designed to avoid accounting consequences that
may result from the use of Shares as payment upon exercise of an Option. Fractional Shares shall not be accepted as payment of the Purchase Price.  

	(d)
	Transferability.

	(i)
	No
Option shall be assignable or transferable, except by will or the laws of descent and distribution of the state wherein the Grantee is domiciled at the
time of his or her death; provided that the Committee may (but need not) permit other transfers, where the Committee concludes that such transferability
(A) does not result in accelerated taxation to the Optionee, (B) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of
the Code and (C) is otherwise appropriate and desirable.

	(ii)
	No
Option shall be exercisable except by the Grantee or a transferee permitted hereunder.

	(e)
	Termination of Service, Other Than by Death, Disability or for Cause.    Unless otherwise provided
in the applicable Award Agreement, upon Termination of Service for any reason other than his or her death or Disability, or a Cause Termination, all Options shall cease vesting, and an Optionee shall
have the right, subject to the restrictions of Section 4(c), to exercise the vested portion of the Option at any time within 90 days after Termination of Service. Any unvested portion of
the Option shall be cancelled upon Termination of Service.

	(f)
	Death of Optionee.    Unless otherwise provided in the applicable Award Agreement, upon
Termination of Service on account of death, or if the Optionee dies within 90 days after a Termination of Service other than a Cause Termination, all Options shall cease vesting, and the
Successors of the Optionee shall have the right, subject to the restrictions of Section 4(c), to exercise the vested portion of the Option at any time within 12 months after the
Optionee's death (or 12 months after the Optionee's Termination of Service, if sooner). Any unvested portion of the Option shall be cancelled upon Termination of Service.

	(g)
	Disability of Optionee.    Unless otherwise provided in the Award Agreement, upon Termination of
Service on account of his or her Disability, all Options shall cease vesting, and an Optionee shall have the right, subject to the restrictions of Section 4(b), to exercise the vested portion
of the Option at any time within 12 months after Termination of Service. Any unvested portion of the Option shall be cancelled upon Termination of Service.

	(h)
	Cause Termination.    Unless otherwise provided in the applicable Award Agreement, upon a Cause
Termination all Options, whether vested or unvested, automatically shall be cancelled.

	(i)
	Rights as a Stockholder.    An Optionee or a Successor of the Optionee shall have no rights as a
stockholder with respect to any Shares covered by his or her Grant until the Option is exercised, the full Purchase Price thereof is paid, and all related withholding taxes are satisfied. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights for which the record date is prior to the date the
conditions in the foregoing sentence are satisfied. 

8

 

	(j)
	Modification and Extension of Option.    Notwithstanding Sections 7(e) through (h), the
Committee may extend the exercise period of an Option (but not beyond its maximum term), taking into consideration Rule 16b-3 under the Exchange Act and Section 409A of the
Code. The Committee also may modify an Option, as required by applicable law or regulation, to meet the requirements of any accounting standard, to correct an administrative error or otherwise;  provided
that no such modification may, without such Optionee's consent, materially impair the rights of an Optionee under any Option previously
granted.

	(k)
	Other Provisions.    The Award Agreement authorized under the Plan may contain such other
provisions not inconsistent with the terms of the Plan as the Committee shall deem advisable.

	8.
	SPECIAL RULES FOR INCENTIVE STOCK OPTIONS.

	(a)
	Each
Incentive Stock Option shall be designated as such in the applicable Award Agreement.

	(b)
	The
aggregate Fair Market Value (determined as of the date of grant thereof) of the Shares with respect to which Incentive Stock Options become exercisable
by any Optionee for the first time during any calendar year (under the Plan and all other plans) required to be taken into account under Section 422(d) of the Code shall not exceed $100,000.

	(c)
	In
the case of an individual described in Section 422(b)(6) of the Code (relating to certain 10% owners), the Exercise Price with respect to an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of a Share on the day the Option is granted and the term of an Incentive Stock Option shall be no more than five years from
the date of grant.

	(d)
	If
Shares acquired upon exercise of an Incentive Stock Option are disposed of in a disqualifying disposition within the meaning of Section 422 of the
Code by an Optionee, such Optionee shall notify the Company in writing as soon as practicable thereafter of the date and terms of such disposition and, if the Company thereupon has a
tax-withholding obligation, shall pay to the Company (or otherwise provide for as permitted by the Committee) an amount equal to any withholding tax the Company is required to pay as a
result of the disqualifying disposition.

	9.
	PROVISIONS APPLICABLE TO RESTRICTED STOCK.

	(a)
	Vesting.    The Committee shall establish vesting criteria, whether based on continuous service
for a period of time or on the level of achievement of performance conditions or both, with respect to the Shares of Restricted Stock granted, which shall be set forth in the applicable Award
Agreement.

	(b)
	Purchase Price.    The Committee may, as reflected by the terms of the applicable Award Agreement,
provide a specified purchase price for the Restricted Stock (whether or not the payment of a purchase price is required by any state law applicable to the Company).

	(c)
	Certificates.

	(i)
	Each
Grantee of Restricted Stock may be issued a stock certificate in respect of Shares of Restricted Stock awarded under the Plan. In addition to any
legend that might otherwise be required by the Board or the Company's charter, bylaws or other applicable documents, certificates for Shares of Restricted Stock issued hereunder may include any legend
that the Committee deems appropriate to reflect any restrictions on transfer hereunder or under the applicable Award Agreement, or as the Committee may otherwise deem appropriate, and, without
limiting the generality of the foregoing, shall bear a 

9

 

legend
referring to the terms, conditions, and restrictions applicable to such Grant, substantially in the following form: 

THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE ARES COMMERCIAL REAL ESTATE CORPORATION 2012
EQUITY INCENTIVE PLAN, AND AN AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND ARES COMMERCIAL REAL ESTATE CORPORATION. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE ON FILE IN THE
PRINCIPAL OFFICES OF ARES COMMERCIAL REAL ESTATE CORPORATION.  

	(ii)
	The
Committee may require that any stock certificates evidencing such Shares be held in custody by the Company until the restrictions hereunder shall have
lapsed and that, as a condition of any grant of Restricted Stock, the Grantee shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Grant. If and when such
restrictions so lapse, the stock certificates shall be delivered by the Company to the Grantee or his or her designee, subject to Section 9(d).

	(iii)
	For
purposes of clarity, nothing contained in the Plan shall preclude the use of any non-certficated method of evidencing ownership that the
Committee determines to be appropriate, including book entry.

	(d)
	Restrictions and Conditions.    Unless otherwise provided by the Committee in an Award Agreement,
Restricted Stock awarded pursuant to the Plan shall also be subject to the following restrictions and conditions:

	(i)
	During
a period commencing with the date of issuance of such Shares and ending on the date the period of forfeiture with respect to such Shares lapses
pursuant to the Plan or the applicable Award Agreement, the Grantee shall not be permitted to sell, transfer, pledge, anticipate, alienate, encumber or assign Restricted Stock (or have such Shares
attached or garnished). The period of forfeiture with respect to Restricted Stock shall lapse as provided in the applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly
provided by the Committee, the period of forfeiture with respect to such Restricted Stock shall only lapse as to whole Shares.

	(ii)
	Unless
otherwise provided in the applicable Award Agreement, the Grantee shall have, in respect of the Restricted Stock, all of the rights of a stockholder
of the Company, including the rights to vote the Shares and receive dividends.

	(iii)
	Unless
otherwise provided in the applicable Award Agreement, if the Grantee has a Termination of Service for any reason, then all Restricted Stock still
subject to restriction shall thereupon, and with no further action, be forfeited by the Grantee.

	(iv)
	The
Committee may impose such other restrictions and conditions on the grant or vesting of Restricted Stock as it deems appropriate, not inconsistent with
the terms of the Plan.

	10.
	PROVISIONS APPLICABLE TO RESTRICTED STOCK UNITS.

	(a)
	Term.    The Committee may provide in an Award Agreement that any particular Restricted Stock Unit
shall expire at the end of a specified term.

	(b)
	Vesting; Other Restrictions.    

	(i)
	Subject
to the provisions of the applicable Award Agreement and Section 10(b)(ii), Restricted Stock Units shall vest as provided in the applicable
Award Agreement. The Committee may impose such other conditions or restrictions on Restricted Stock Units as it deems appropriate, not inconsistent with the Plan. 

10

 

 

	(ii)
	Unless
otherwise provided by the applicable Award Agreement, in the event that a Grantee has a Termination of Service, any and all of the Grantee's
Restricted Stock Units that have not vested prior to or as of such termination shall thereupon, and with no further action, be forfeited and cease to be outstanding.

	(c)
	Settlement of Restricted Stock Units.    

	(i)
	Upon
vesting or at a pre-specified time thereafter, each vested Restricted Stock Unit shall be settled by the transfer to the Grantee of one Share;  provided that the Committee at the time of grant (or
thereafter) may provide that a Restricted Stock Unit may be settled (A) in cash at the
applicable Fair Market Value of one Share at the time of vesting of such Restricted Stock Unit, (B) in cash or by transfer of Shares as elected by the Grantee in accordance with procedures
established by the Committee (if any) or (C) in cash or by transfer of Shares as elected by the Company.

	(d)
	Other Restricted Stock Unit Provisions.    

	(i)
	Except
as permitted by the Committee, rights to payments with respect to Restricted Stock Units granted under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, garnishment, levy, execution, or other legal or equitable process, either voluntary or involuntary; and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish, or levy or execute on any right to payments or other benefits payable hereunder, shall be void.

	(ii)
	A
Grantee may designate in writing, on forms to be prescribed by the Committee, a beneficiary or beneficiaries to receive any payments payable on account
of vested Restricted Stock Units after his or her death and may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Grantee's death, payments
hereunder shall be made to the Grantee's estate.

	(iii)
	The
Committee may (taking into account, without limitation, Section 409A of the Code) establish a program under which distributions with respect to
Restricted Stock Units may be deferred.

	(iv)
	Notwithstanding
any other provision of this Section 10, any fractional Restricted Stock Units will be settled in cash.

	(v)
	No
Restricted Stock Unit shall give any Grantee any rights with respect to Shares or any ownership interest in the Company;  provided, that the Committee may confer the right to dividends or dividend
equivalents to the Grantee of a Restricted Stock Unit either in the form of
additional Restricted Stock Units equal in value to such dividends, or in cash or in kind. No provision of the Plan shall be interpreted to confer upon any Grantee of a Restricted Stock Unit any
voting rights with respect to any Restricted Stock Unit.

	(vi)
	The
holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.

	11.
	OTHER EQUITY-BASED AWARDS.    The Board shall have the right to grant other awards based upon the
Common Stock having such terms and conditions as the Board may determine, including the grant of Shares based upon certain conditions, the grant of securities convertible into Common Stock, the grant
of standalone dividend equivalents, and the grant of phantom Shares. 

11

 
	12.
	PERFORMANCE GOALS.    The Committee shall, in the case of Grants (other than Options) intended to
qualify for exception from the limitation imposed by Section 162(m) of the Code (a) establish one or more performance goals ("Performance
Goals") as a precondition to the issuance or vesting of such Grants, and (b) provide, in connection with the establishment of the Performance Goals, for predetermined
Grants (or the vesting thereof) to those Grantees (who continue to meet all applicable eligibility requirements) with respect to whom the applicable Performance Goals are satisfied. The Performance
Goals shall be based upon the criteria set forth in Exhibit A hereto, which is hereby incorporated by reference. The Performance Goals shall be
established in a timely fashion such that they are considered preestablished for purposes of the rules governing performance-based compensation under Section 162(m) of the Code. Prior to the
award or vesting of Restricted Stock or other Grants intended to qualify for exception from the limitation imposed by Section 162(m) of the Code, the Committee shall have certified that any
applicable Performance Goals, and other material terms of the Grant, have been satisfied. In the case of Grants intended to qualify for exception from the limitation imposed by Section 162(m)
of the Code, the Committee shall not have the discretion to increase the amounts payable with respect to such Grants upon the attainment of the applicable Performance Goals. Performance Goals which do
not satisfy the foregoing provisions of this Section 12 may be established by the Committee with respect to Grants not intended to qualify for exception from the limitation imposed by
Section 162(m) of the Code.

	13.
	TERM OF PLAN.    The Plan shall terminate on, and no Grant shall be awarded on or after, the
ten-year anniversary of the Effective Date, unless earlier terminated in accordance with Section 18.

	14.
	RECAPITALIZATION AND CHANGES OF CONTROL.

	(a)
	Subject
to any required action by stockholders and to the specific provisions of Section 14(b) and Section 15, if (A) the Company shall
at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or a
transaction similar thereto, (B) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar change in the capital structure of
the Company, or any distribution to holders of Common Stock other than cash dividends, shall occur or (C) any other event shall occur which in the judgment of the Committee necessitates action
by way of adjusting the terms of the outstanding Grants, then:

	(i)
	the
maximum aggregate number of Shares that may be made subject to Grants, and each of the other limits described in Section 6, shall be
appropriately adjusted by the Committee;

	(ii)
	the
Committee shall take any such action as shall be necessary to maintain each Grantee's economic interests in his or her Grants, including by making
adjustments in (A) the number of Options, Shares of Restricted Stock and Restricted Stock Units (and other Grants under Section 11) granted, (B) the kind of securities or other
property underlying such Grants, (C) the Exercise Price and (D) the performance-based criteria established in connection with Grants (to the extent consistent with Section 162(m)
of the Code, as applicable); provided, that in the discretion of the Committee, the foregoing clause (D) may also be applied in the case of any
event relating to a Subsidiary if the event would have been covered under this Section 14(a) had the event related to the Company; and

	(iii)
	Any
Shares or other securities distributed to a Grantee with respect to Restricted Stock or otherwise issued in adjustment of Restricted Stock pursuant to
Section 14(a) shall be subject to the applicable restrictions and requirements imposed by Section 9, including 

12

 

the
requirements to deposit the certificates therefor with the Company together with a stock power and to legend such certificates.  

	(b)
	Notwithstanding
Section 14(a), and subject to any required action by stockholders and to the specific provisions of Section 15, upon the
occurrence of a Change in Control, the Committee as constituted immediately before the Change in Control may make such adjustments or take such other actions with respect to Grants as it determines
are appropriate in light of the Change in Control (including the substitution of equity securities other than stock of the Company as the stock underlying Grants, acceleration of the exercisability or
vesting of Grants, or cancellation of Options in return for payment equal to the Fair Market Value of Shares subject to such Options as of the date of the Change in Control less the Exercise Price
applicable thereto (which payment amount may be zero)), if any, provided that the Committee determines that such adjustments or other actions do not have a substantial adverse economic impact on the
Grantee as determined at the time of the adjustments. The Committee also may reduce payments to a Grantee, or provide that a Grantee's Grants that otherwise would vest will not so vest, in each case
in connection with a Change in Control, where such Grantee would be a "disqualified individual" within the meaning of Section 280G of the Code and would be subject to the 20% excise tax imposed
by such section.

	15.
	EFFECT OF CERTAIN TRANSACTIONS.    Upon the occurrence of (a) the dissolution or
liquidation of the Company, (b) a merger, consolidation, reorganization or other business combination in which the Company is acquired by another entity or in which the Company is not the
surviving entity, or (c) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company, the Plan and the Grants issued hereunder shall terminate, unless provision is made in connection with such transaction for the assumption of such
Grants, or the substitution for such Grants of new Grants, by the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and the per share exercise prices,
as provided in Section 14. In the event of such termination, (i) all outstanding Options and other Grants subject to exercise shall be exercisable to the extent then vested (taking into
account any accelerated vesting provided by the Committee) for at least ten days prior to the date of such termination and (ii) all other Grants shall be settled, to the extent then-vested.

	16.
	SECURITIES LAW REQUIREMENTS.

	(a)
	Legality of Issuance.    The award of any Grant and the issuance of any Shares pursuant to Grants
shall be contingent upon the following:

	(i)
	complying
with all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such
approvals by governmental agencies as may be deemed necessary or appropriate by the Committee;

	(ii)
	the
listing, registration, qualification, consent or approval of Shares or of the offer or sale of Shares underlying Grants has been effected or obtained
free of any conditions in a manner acceptable to the Committee, to the extent that the Committee at any time determines that such listing, registration or qualification is required by any securities
exchange or under any state or federal law, or such consent or approval of any governmental regulatory body is necessary or desirable.

	(b)
	Restrictions on Transfer.    Regardless of whether the offering and sale of Shares under the Plan
has been registered under the Act or has been registered or qualified under the securities laws of any state, the Company may impose restrictions on the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on any stock certificates) if, in the judgment of the Company and its counsel, such restrictions are necessary or desirable in 

13

 

order
to achieve compliance with the provisions of the Act, the securities laws of any state or any other law. In the event that the offering and sale of Shares under the Plan is not registered under
the Act but an exemption is available that requires an investment representation or other representation, each Grantee shall be required to represent that such Shares are being acquired for
investment, and not with a view to the sale or distribution thereof, and to make such other representations as are deemed necessary or appropriate by the Company and its counsel. Any determination by
the Company and its counsel in connection with any of the matters set forth in this Section 16 shall be conclusive and binding on all persons. Any stock certificates evidencing Shares acquired
under the Plan pursuant to an unregistered transaction shall bear a restrictive legend, substantially in the following form, and such other restrictive legends as are required or deemed advisable
under the provisions of any applicable law: 

"THE
SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE INVALID UNLESS A REGISTRATION
STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT." 

	(c)
	Registration or Qualification of Securities.    The Company may, but shall not be obligated to,
register or qualify the issuance of Grants or the sale of Shares under the Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the
issuance of Grants or the sale of Shares under the Plan to comply with any law.

	(d)
	Exchange of Certificates.    If, in the opinion of the Company and its counsel, any legend placed
on a stock certificate representing Shares sold under the Plan no longer is required, the holder of such certificate shall, with the permission of the Committee, be entitled to exchange such
certificate for a certificate representing the same number of Shares but lacking such legend.

	17.
	COMPLIANCE WITH SECTION 409A OF THE CODE.

	(a)
	Any
Award Agreement that is subject to Section 409A of the Code shall include such additional terms and conditions as may be required to satisfy the
requirements of Section 409A of the Code.

	(b)
	With
respect to any Grant that is subject to Section 409A of the Code, and with respect to which a payment or distribution is to be made upon a
Termination of Service, if the Grantee is determined by the Company to be a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code and the Company's stock is publicly
traded on an established securities market or otherwise, such payment or distribution, to the extent it would constitute a payment of nonqualified deferred compensation within the meaning of
Section 409A of the Code that is ineligible for an exemption from treatment as such, may not be made before the date that is six months after the date of Termination of Service (to the extent
required under Section 409A of the Code).

	(c)
	It
is the intention of the Board and the Committee that the Plan be operated and administered in compliance with Section 409A of the Code or any
exemption thereto. Notwithstanding the foregoing, nothing contained herein shall be deemed to provide assurances or an indemnity to any Grantee regarding his or her personal tax treatment.

	18.
	AMENDMENT AND TERMINATION OF THE PLAN.    The Board may from time to time, with respect to any
Shares at the time not subject to Grants, suspend or discontinue the Plan or revise 

14

 

or
amend it in any respect whatsoever, taking into account applicable laws, regulations, exchange and accounting rules. The Board may otherwise amend the Plan or terminate the Plan before the ten-year
anniversary of the Effective Date, except that no such amendment or termination may materially impair the rights of a Grantee under an award previously granted without the Grantee's consent, unless
effected to comply with applicable law or regulation or to meet the requirements of any accounting standard or to correct an administrative error.  

	19.
	APPLICATION OF FUNDS.    The proceeds received by the Company from the sale of Shares pursuant to
the exercise of an Option, the sale of Restricted Stock or in connection with other Grants under the Plan will be used for general corporate purposes.

	20.
	TAX WITHHOLDING.    Each Grantee shall, no later than the date as of which any amount attributable
to any Grant first becomes includable in the gross income of the Grantee for federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Company regarding payment of, any
federal, state, local or other taxes of any kind that are required by law to be withheld with respect to such amount. To the extent permitted by the Committee from time to time, a Grantee may elect to
have such tax withholding satisfied, in whole or in part, by (a) authorizing the Company to withhold a number of Shares to be issued pursuant to a Grant with a Fair Market Value as of the date
of such withholding equal to the amount of the required withholding tax, (b) transferring to the Company Shares owned by the Grantee with a Fair Market Value equal to the amount of the required
withholding tax, or (c) in the case of a Grantee who is an Employee of the Company at the time such withholding is effected, by withholding from the Grantee's cash compensation. Notwithstanding
anything contained in the Plan to the contrary, the Grantee's satisfaction of any tax withholding requirements imposed by the Committee shall be a condition precedent to the Company's obligation to
issue Shares to the Grantee, and the failure of the Grantee to satisfy such requirements with respect to a Grant shall cause such Grant to be forfeited.

	21.
	NOTICES.    All notices under the Plan shall be in writing, and if to the Company, shall be
delivered to the Board or mailed to its principal office, addressed to the attention of the Committee; and if to the Grantee, shall be delivered personally or mailed to the Grantee at the address
appearing in the records of the Participating Company.

	22.
	RIGHTS TO EMPLOYMENT OR OTHER SERVICE.    Nothing in the Plan or in any Grant shall confer on any
person any right to continue in the employ or other service of the Participating Company or interfere in any way with the right of the Participating Company and its stockholders to terminate such
person's employment or other service at any time.

	23.
	EXCULPATION AND INDEMNIFICATION.    To the maximum extent not prohibited by law, the Company shall
indemnify and hold harmless the members of the Board and the members of the Committee, in each case as constituted from time to time, from and against any and all liabilities, costs and expenses
(including attorneys' fees) incurred by such persons as a result of any act or omission in connection with the performance of such person's duties, responsibilities and obligations under the Plan,
other than such liabilities, costs and expenses as may result from the bad faith or fraud of such persons.

	24.
	CAPTIONS; CONSTRUCTION.    The use of captions in the Plan is for convenience. The captions are
not intended to provide substantive rights. Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases
where they would so apply. As used herein, (a) "or" means "and/or" and (b) "including" or "include" means "including, without limitation."

	25.
	GOVERNING LAW.    THE PLAN SHALL BE GOVERNED BY THE LAWS OF MARYLAND, WITHOUT REFERENCE TO
PRINCIPLES OF CONFLICT OF LAWS.

	26.
	REGIONAL VARIATION.    The Committee reserves the right to authorize the establishment of, and to
make Grants pursuant to, annexes, sub-plans or other supplementary documentation as the Committee deems appropriate in light of local law, rules and customs. 

15

 

 
 

  EXHIBIT A
  
    PERFORMANCE CRITERIA    
    

        Grants intended to qualify as "performance based" compensation under Section 162(m) of the Code may be payable upon the
attainment of objective performance goals that are established by the Committee and relate to one or more Performance Criteria, in each case on a specified date or over any period, up to ten years, as
determined by the Committee. 

        "Performance
Criteria" means the following business criteria (or any combination thereof) with respect to the Company or any division or operating unit
thereof: 

	1.
	pre
tax income,

	2.
	after
tax income,

	3.
	net
income (on an aggregate, diluted or per share basis, or economic net income),

	4.
	operating
income or expenses,

	5.
	earnings
before or after any one or more of the following items: interest, taxes, depreciation or amortization, as reflected in the Company's financial
reports for the applicable period, or other measure of operating earnings,

	6.
	cash
flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of
capital,

	7.
	earnings
per share (basic or diluted),

	8.
	return
on equity,

	9.
	returns
on sales or revenues,

	10.
	return
on invested capital or assets (gross or net),

	11.
	cash,
funds or earnings available for distribution,

	12.
	appreciation
in the fair market value of the Common Stock or stock price appreciation,

	13.
	total
stockholder return (including dividends paid),

	14.
	implementation
or completion of critical projects or processes,

	15.
	related
return ratios,

	16.
	the
Company's published ranking against its peer group of real estate investment trusts,

	17.
	market
share,

	18.
	revenues
under management,

	19.
	number
of securities sold,

	20.
	economic
value created,

	21.
	operating
margin or profit margin,

	22.
	cost
targets, reductions and savings, productivity and efficiencies,

	23.
	objectively
determinable strategic business criteria, including objectively determinable specified market penetration, geographic business expansion,
expansion of scale, investor satisfaction, employee satisfaction, human resources management, supervision of litigation, information technology goals, and objectively determinable goals relating to
acquisitions, divestitures, joint 

16

 

ventures,
financings, capital market transactions and similar transactions, and budget comparisons,  

	24.
	objectively
determinable personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the
negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions, and

	25.
	any
combination of, or a specified increase or improvement in, any of the foregoing. 

        Where
applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the
particular criteria, and may be applied to one or more of the Company, a Subsidiary or affiliate, or a division or strategic business unit of the Company, or may be applied to the performance of the
Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Committee. 

        The
Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments
shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur). 

        To
the extent permitted by Section 162(m) of the Code, unless the Committee provides otherwise at the time of establishing the performance goals, the Committee shall have the
authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or affiliate or the financial
statements of the Company or any Subsidiary or affiliate and may provide for objectively determinable adjustments, as determined in accordance with GAAP, to any of the Performance Criteria described
above for one or more of the items of gain, loss, profit or expense: (a) determined to be extraordinary or unusual in nature or infrequent in occurrence, (b) related to the disposal of a
segment of a business, (c) related to a change in accounting principle under GAAP or a change in applicable laws or regulations, (d) related to discontinued operations that do not
qualify as a segment of a business under GAAP, and (e) attributable to the business operations of any entity acquired by the Company during the performance period. 

17

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Exhibit 10.3

ARES COMMERCIAL REAL ESTATE CORPORATION 2012 EQUITY INCENTIVE PLAN

EXHIBIT A PERFORMANCE CRITERIA

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