Exhibit 10.1

 

 

SECOND AMENDED AND RESTATED WAREHOUSING

CREDIT AND SECURITY AGREEMENT

 

BY AND AMONG

 

WALKER & DUNLOP, LLC

a Delaware limited liability company

AS BORROWER,

 

WALKER & DUNLOP, INC.

A Maryland corporation

AS PARENT

 

and

 

PNC BANK, NATIONAL ASSOCIATION

AS LENDER

 

DATED AS OF SEPTEMBER 11, 2017

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

THE CREDIT

1

 

 

 

 

 

1.1

The Warehousing Commitment

1

 

1.2

Expiration of Warehousing Commitment

1

 

1.3

Warehousing Note

2

 

1.4

Replacement of Warehousing Note

2

 

1.5

Nature of Obligations

2

 

1.6

Amended and Restated Guaranty

2

 

 

 

2.

PROCEDURES FOR OBTAINING ADVANCES

2

 

 

 

 

 

2.1

Warehousing Advances

2

 

 

 

3.

INTEREST, PRINCIPAL AND FEES

3

 

 

 

 

 

3.1

Interest

3

 

3.2

Interest Limitation

4

 

3.3

Principal Payments

4

 

3.4

Facility Fee

6

 

3.5

[Intentionally Omitted.]

7

 

3.6

Miscellaneous Fees and Charges

7

 

3.7

Overdraft Advances

7

 

3.8

Method of Making Payments

7

 

3.9

Billings

8

 

3.10

Late Charges

8

 

3.11

Additional Provisions Relating to Interest Rate

8

 

3.12

Continuing Authority of Authorized Representatives

10

 

3.13

Increases to Standard Warehousing Credit Limit

10

 

 

 

4.

COLLATERAL

11

 

 

 

 

 

4.1

Grant of Security Interest

11

 

4.2

Maintenance of Collateral Records

12

 

4.3

Release of Security Interest in Pledged Loans and Pledged Securities

12

 

4.4

Collection and Servicing Rights

14

 

4.5

Return of Collateral at End of Warehousing Commitment

14

 

4.6

Delivery of Collateral Documents

14

 

4.7

Borrower Remains Liable

15

 

 

 

5.

CONDITIONS PRECEDENT

15

 

 

 

 

 

5.1

Initial Advance

15

 

5.2

Each Advance

17

 

5.3

Force Majeure

18

 

i

--------------------------------------------------------------------------------

 

6.

GENERAL REPRESENTATIONS AND WARRANTIES

18

 

 

 

 

 

6.1

Place of Business

18

 

6.2

Organization; Good Standing

18

 

6.3

Authorization and Enforceability

19

 

6.4

Approvals

19

 

6.5

Financial Condition

19

 

6.6

Litigation

19

 

6.7

Compliance with Laws

20

 

6.8

Regulation U

20

 

6.9

Investment Company Act

20

 

6.10

Payment of Taxes

20

 

6.11

Agreements

20

 

6.12

Title to Properties

21

 

6.13

ERISA

21

 

6.14

No Retiree Benefits

21

 

6.15

Assumed Names

21

 

6.16

Servicing

22

 

6.17

Foreign Asset Control Regulations

22

 

 

 

7.

AFFIRMATIVE COVENANTS

22

 

 

 

 

 

7.1

Payment of Obligations

22

 

7.2

Financial Statements

22

 

7.3

Other Borrower Reports

23

 

7.4

Maintenance of Existence; Conduct of Business

24

 

7.5

Compliance with Applicable Laws

24

 

7.6

Inspection of Properties and Books; Operational Reviews

24

 

7.7

Notice

25

 

7.8

Payment of Taxes and Other Obligations

25

 

7.9

Insurance

26

 

7.10

Closing Instructions

26

 

7.11

Subordination of Certain Indebtedness

26

 

7.12

Other Loan Obligations

27

 

7.13

ERISA

27

 

7.14

Use of Proceeds of Warehousing Advances

27

 

7.15

Investor Instructions

27

 

7.16

Sale of Mortgage Loan to Investor

27

 

 

 

8.

NEGATIVE COVENANTS

28

 

 

 

 

 

8.1

[Intentionally Deleted]

28

 

8.2

Contingent Liabilities

28

 

8.3

Restrictions on Fundamental Changes

28

 

8.4

Subsidiaries

29

 

8.5

Loss of Eligibility, Licenses or Approvals

29

 

8.6

Accounting Changes

29

 

8.7

Minimum Adjusted Tangible Net Worth

29

 

ii

--------------------------------------------------------------------------------

 

 

8.8

[Intentionally Deleted]

29

 

8.9

[Intentionally Deleted]

29

 

8.10

[Intentionally Deleted]

29

 

8.11

Minimum Cash and Cash Equivalents

30

 

8.12

Servicing Delinquencies

30

 

8.13

Dividends and Distributions

30

 

8.14

Transactions with Affiliates

30

 

8.15

Recourse Servicing Contracts

30

 

8.16

Total Servicing Portfolio and Fannie Mae Servicing Portfolio

31

 

 

 

9.

SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL

31

 

 

 

 

 

9.1

Special Representations and Warranties Concerning Warehousing Collateral

31

 

9.2

Special Affirmative Covenants Concerning Warehousing Collateral

34

 

9.3

Special Negative Covenants Concerning Warehousing Collateral

35

 

9.4

Special Representations and Warranties Concerning Eligibility as Fannie Mae
Approved Seller/Servicer of Mortgage Loans

35

 

9.5

Special Representation and Warranty Concerning Fannie Mae DUS Program Reserve
Requirements

35

 

9.6

Special Representations and Warranties Concerning FHA Mortgage Loans

36

 

9.7

Special Representations and Warranties Concerning Eligibility as Freddie Mac
Program Plus Seller/Servicer of Mortgage Loans

36

 

 

 

10.

DEFAULTS; REMEDIES

36

 

 

 

 

 

10.1

Events of Default

36

 

10.2

Remedies

38

 

10.3

Insufficiency of Proceeds

41

 

10.4

Lender Appointed Attorney-in-Fact

41

 

10.5

Right of Set-Off

42

 

10.6

Application of Funds

42

 

 

 

11.

MISCELLANEOUS

43

 

 

 

 

 

11.1

Modifications, Amendments or Waivers

43

 

11.2

No Implied Waivers, Cumulative Remedies

44

 

11.3

Notices

44

 

11.4

Reimbursement Of Expenses; Indemnity

46

 

11.5

Financial Information

47

 

11.6

Terms Binding Upon Successors; Survival of Representations

47

 

11.7

Pledge to Federal Reserve Banks

47

 

11.8

Governing Law

47

 

11.9

Amendments

47

 

11.10

Relationship of the Parties

47

 

11.11

Severability

48

 

11.12

Consent to Credit References

48

 

11.13

Counterparts, PDF Copies

48

 

iii

--------------------------------------------------------------------------------

 

 

11.14

Headings/Captions

49

 

11.15

Entire Agreement

49

 

11.16

Consent to Jurisdiction

49

 

11.17

Waiver of Jury Trial

49

 

11.18

Waiver of Punitive, Consequential, Special or Indirect Damages

49

 

11.19

U.S. Patriot Act

50

 

11.20

Assignments and Participations

50

 

11.21

Confidentiality

52

 

11.22

No Novation

53

 

11.23

Amendment and Restatement

53

 

 

 

12.

DEFINITIONS

53

 

 

 

 

 

12.1

Defined Terms

53

 

12.2

Other Definitional Provisions; Terms of Construction

67

 

iv

--------------------------------------------------------------------------------

 

EXHIBITS

 

Exhibit A

Fifth Amended and Restated Warehousing Note

Exhibit B-1 FNMA/DUS

Procedures and Documentation for Fannie Mae DUS Loans and Other Fannie Mae
Mortgage Loans

Exhibit B-2-A FHA/GNMA

Procedures and Documentation for FHA Permanent Mortgage Loans, FHA Construction
Mortgage Loans, and Related Ginnie Mae Mortgage-Backed Securities

Exhibit B-2-B FHA

 

Modified Mortgage Loan

Procedures and Documentation for FHA Modified Mortgage Loans and Related Ginnie
Mae Mortgage-Backed Securities

Exhibit B-3-A Freddie

 

Mac Program Plus Loans

Procedures and Documentation for Program Plus Loans

Exhibit B-3-B Freddie

 

Mac Direct Purchase

 

Mortgage Loans

Procedures and Documentation for Direct Purchase Mortgage Loans

Exhibit C

Form of Warehousing Advance Request

Exhibit D

Eligible Loans and Other Assets

Exhibit E

Authorized Representatives

Exhibit F

[Intentionally Omitted]

Exhibit G

Assumed Names

Exhibit H

Servicing Portfolio

Exhibit I

Form of Compliance Certificate

Exhibit J

Lines of Credit

Exhibit K

Foreign Qualifications and Licenses

Exhibit L

Miscellaneous Fees and Charges

Exhibit M

Form of Assignment and Assumption Agreement

Exhibit N-1

Form of Joint Escrow and Bailee Letter

Exhibit N-2

Form of Escrow Letter

Exhibit N-2

Form of Bailee Letter

Exhibit O

Form of Disbursement Request

Exhibit P

Form of Assignment of Mortgage Note and Mortgage

Exhibit Q

[Intentionally Omitted]

Exhibit R

Form of Amended and Restated Guaranty

 

v

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED WAREHOUSING

CREDIT AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT,
dated as of September 11, 2017, is made by and among WALKER & DUNLOP, LLC, a
Delaware limited liability company (“Borrower”), WALKER & DUNLOP, INC., a
Maryland corporation (“Parent” or “Guarantor”, as applicable), and PNC BANK,
NATIONAL ASSOCIATION, as lender (the “Lender”).

 

Preliminary Statement

 

A.                                    Borrower, Parent, Lender, as a Lender and
administrative agent and certain other lenders are parties to that certain
Amended and Restated Warehousing Credit and Security Agreement, dated as of
June 25, 2013, as amended from time to time (collectively, the “Original Credit
Facility Agreement”), whereby upon the satisfaction of certain terms and
conditions set forth therein, Lender (and the other Lender) agreed to make
Warehousing Advances from time to time, up to the Warehousing Credit Limit (as
defined in the Original Credit Facility Agreement).

 

B.                                    Borrower and Parent have requested, and
Lender has agreed, to amend and restate the Original Credit Facility Agreement
in its entirety pursuant to the terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree to amend and restate
the Original Credit Facility Agreement in its entirety as follows:

 

1.                                      THE CREDIT

 

1.1                               The Warehousing Commitment

 

On the terms and subject to the conditions and limitations of this Agreement,
Lender agrees to make Warehousing Advances to Borrower from the Closing Date to
the fifth (5th) Business Day immediately preceding the Warehousing Maturity
Date, during which applicable period Borrower may borrow, repay and reborrow in
accordance with the provisions of this Agreement.  Lender has no obligation to
make or maintain Warehousing Advances if, after giving effect to each requested
Warehousing Advance, the aggregate outstanding principal amount of all
Warehousing Advances would exceed the Warehousing Credit Limit.  While a Default
or Event of Default exists, Lender may refuse to make any additional Warehousing
Advances to Borrower.  All Warehousing Advances under this Agreement constitute
a single indebtedness, and all of the Collateral is security for the Warehousing
Note and for the performance of all of the Obligations.

 

1.2                               Expiration of Warehousing Commitment

 

The Warehousing Commitment expires on the earlier of (“Warehousing Maturity
Date”):  (a) September 10, 2018 (the “Stated Maturity Date”), on which date the
Warehousing Commitment will expire of its own term and the Warehousing Advances
together with all accrued and unpaid

 

--------------------------------------------------------------------------------

 

interest and costs and expenses will become due and payable without the
necessity of Notice or action by Lender; and (b) the date the Warehousing
Commitment is terminated and the Warehousing Advances become due and payable
under Section 10.2(a) or 10.2(b).

 

1.3                               Warehousing Note

 

Warehousing Advances are evidenced by a certain Fifth Amended and Restated
Warehousing Note, payable to Lender in the form attached hereto as Exhibit A. 
The term “Warehousing Note” as used in this Agreement includes the
aforementioned Warehousing Note, together with all amendments, restatements,
renewals or replacements of the original Warehousing Note and all substitutions
for it.  All terms and provisions of the Warehousing Note are incorporated into
this Agreement.

 

1.4                               Replacement of Warehousing Note

 

Upon receipt of an affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Warehousing Note or any other security document
which is not of public record, and, in the case of any such loss, theft,
destruction or mutilation, upon cancellation of such Warehousing Note or other
security document and receipt by Borrower of customary indemnification from
Lender, the Borrower will issue, in lieu thereof, a replacement note or other
security document in the same principal amount thereof and otherwise of like
tenor.

 

1.5                               Nature of Obligations

 

The aggregate amount of all Warehousing Advances outstanding from time to time
under this Agreement may hereinafter collectively be referred to as the “Loan.”

 

1.6                               Amended and Restated Guaranty

 

Parent shall continue to guaranty to Lender Borrower’s payment and performance
under this Agreement and the other Loan Documents, and in consideration for
Lender’s agreement to enter into this Agreement, Parent covenants and agrees to
amend and restate the existing guaranty executed in connection with the Original
Credit Facility Agreement, by contemporaneously herewith executing and
delivering to Lender an amended and restated guaranty in the form attached
hereto as Exhibit R (the “Amended and Restated Guaranty”).

 

2.                                      PROCEDURES FOR OBTAINING ADVANCES

 

2.1                               Warehousing Advances

 

Borrower may obtain a Warehousing Advance under this Agreement by delivering to
Lender a completed and signed request for a Warehousing Advance on Lender’s then
current form (“Warehousing Advance Request”), not later than Four O’Clock (4:00)
p.m. on the Business Day that is one (1) Business Day before the Business Day on
which Borrower desires the Warehousing Advance.  Warehousing Advance Requests
received by Lender after Four O’Clock (4:00) p.m. on a Business Day will be
deemed received on the following Business Day, provided, however, on a
case-by-case basis at the request of Borrower, Lender may, in its sole
discretion (and without thereby establishing any course of dealing), extend such
Four O’Clock

 

2

--------------------------------------------------------------------------------

 

(4:00) p.m. cut-off time to a later time on the subject Business Day.  Subject
to the delivery of a Warehousing Advance Request and the satisfaction of the
conditions set forth in Sections 5.1 and 5.2, Borrower may obtain a Warehousing
Advance under this Agreement upon compliance with the procedures set forth in
this Section and in the applicable Exhibit B, including delivery to Lender of
all Collateral Documents required to be delivered on the applicable dates
specified in this Agreement for such delivery.  Lender’s current form of
Warehousing Advance Request is set forth in Exhibit C.  Upon not less than five
(5) Business Days’ prior Notice to Borrower, Lender may modify its form of
Warehousing Advance Request and any other Exhibit or document referred to in
this Section to conform to current legal requirements or Lender’s practices and,
as so modified, those Exhibits and documents will become part of this Agreement.

 

3.                                      INTEREST, PRINCIPAL AND FEES

 

3.1                               Interest

 

3.1(a)                          Except as otherwise provided in this Section,
Borrower must pay interest on the unpaid amount of each Warehousing Advance from
the date the Warehousing Advance is made until it is paid in full at the
Applicable Rate as in effect from time to time.  For the avoidance of doubt, a
Warehousing Advance is deemed to be made as of the date the title company or
escrow agent handling the closing of the subject Mortgage Loan receives such
Warehousing Advance.  Borrower must pay Lender, accrued interest on each
Warehousing Advance on the Warehousing Advance Due Date or upon prepayment of
such Warehousing Advance.

 

3.1(b)                          Lender computes interest on the basis of the
actual number of days in each month and a year of Three Hundred Sixty (360)
days.  Borrower must pay interest on outstanding Warehouse Advances in arrears
on the Warehousing Advance Due Date and on the Warehousing Maturity Date.

 

3.1(c)                           If, for any reason, (i) Borrower repays a
Warehousing Advance on the same day that it was made, or (ii) Borrower instructs
Lender not to make a previously requested Warehousing Advance after Lender has
reserved funds or made other arrangements necessary to enable Lender to fund
that Warehousing Advance, Borrower agrees to pay to Lender, without limiting the
provisions of Section 3.11, for the account of Lender, interest thereon at the
Applicable Rate for one day notwithstanding repayment prior to the cut-off time
specified in Section 3.8(a) (unless the reason for such repayment is due to the
failure of the underlying transaction to close).  Borrower must pay all such
interest within five (5) Business Days after the date of Lender’s notice
thereof.

 

3.1(d)                          After an Event of Default occurs, the unpaid
amount of each Warehousing Advance will bear interest at the Default Rate until
paid in full.

 

3.1(e)                           Lender will adjust the rates of interest
provided for in this Agreement as of the effective date of each change in the
applicable Reference Rate.  Lender’s determination of such rates of interest as
of any date of determination is conclusive and binding, absent manifest error.

 

3

--------------------------------------------------------------------------------

 

3.2                               Interest Limitation

 

If, at any time, the rate of interest, together with all amounts which
constitute or are deemed under any applicable law to constitute interest and
which are reserved, charged or taken by Lender as compensation for fees,
services or expenses incidental to the making, negotiating or collecting of
Warehousing Advances, shall be deemed by any competent court of law,
governmental agency or tribunal to exceed the maximum rate of interest permitted
to be charged by Lender to the Borrower under applicable law, then, during such
time as such rate of interest would be deemed excessive, that portion of each
sum paid attributable to that portion of such interest rate that exceeds the
maximum rate of interest so permitted shall be deemed a voluntary prepayment of
principal (or, if no Obligations are then outstanding, shall be repaid to
Borrower).  As used herein, the term “applicable law” shall mean the law in
effect as of the date hereof; provided, however, that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Agreement shall be governed by such new law as of its effective date.

 

3.3                               Principal Payments

 

3.3(a)                          Borrower must pay Lender, the outstanding
principal amount of each Warehousing Advance, together with all accrued and
unpaid interest thereon, on the applicable Warehousing Advance Due Date. 
Notwithstanding the foregoing, Borrower must pay Lender the outstanding
principal amount of all Warehousing Advances together with all accrued and
unpaid interest thereon, and any unpaid costs and expenses, on the Warehousing
Maturity Date.

 

3.3(b)                          Except as otherwise provided in Section 3.1,
Borrower may prepay any portion of the Warehousing Advances, together with all
accrued and unpaid interest on the portion so prepaid, without premium or
penalty at any time.

 

3.3(c)                           Borrower must pay to Lender, and Borrower
authorizes Lender to charge its Operating Accounts for, the amount of any
outstanding Warehousing Advance, together with all accrued and unpaid interest
thereon, against a specific Pledged Loan or Pledged Security upon the earliest
occurrence of any of the following events:

 

(i)         On the date a Warehousing Advance was made if the Pledged Loan to be
funded by that Warehousing Advance has not closed and funded.

 

(ii)        Three (3) Business Days elapse from the date a Warehousing Advance
was made against a Pledged Loan, without receipt of the Collateral Documents
relating to that Pledged Loan required to be delivered on that date, or if such
Collateral Documents, upon examination by Lender, are found not to be in
compliance with the requirements of this Agreement or the related Purchase
Commitment and Borrower has not delivered Collateral Documents in compliance
with the requirements of this Agreement or the related Purchase Commitment
within three (3) Business Days of receipt by Borrower of Notice from Lender
specifying the non-compliant items.

 

4

--------------------------------------------------------------------------------

 

(iii)       Ten (10) Business Days elapse without the return of a Collateral
Document delivered by Lender to Borrower under a Trust Receipt for correction or
completion.

 

(iv)       On the date on which a Pledged Loan is determined to have been
originated based on untrue, incomplete or inaccurate information or to be
subject to fraud, whether or not Borrower had knowledge of the
misrepresentation, incomplete or inaccurate information or fraud.

 

(v)        On the date on which Borrower knows, has reason to know, or receives
Notice from Lender, that (A) one or more of the representations and warranties
set forth in Article 9 were inaccurate or incomplete in any material respect on
any date when made or deemed made or became inaccurate or incomplete in any
material respect after any such date, or (B) Borrower has failed to perform or
comply with any covenant, term or condition applicable to it set forth in
Article 9.

 

(vi)       On the date on which a Pledged Loan or an obligation secured by a
Lien senior to the Mortgage securing repayment of the Pledged Loan has been in
default for a period of sixty (60) days or more (it being understood that, as
provided in Section 9.1(q), no Warehousing Advance will be made against any
Mortgage Loan which is in default).

 

(vii)      On the mandatory delivery date of the related Purchase Commitment if
the specific Pledged Loan has not been delivered under the Purchase Commitment
on or prior to such mandatory delivery date, or on the date the related Purchase
Commitment expires or is terminated.

 

(viii)     Three (3) Business Days after the date a Pledged Loan is rejected for
purchase by an Investor unless another Purchase Commitment is provided within
that three (3) Business Day period.

 

(ix)       Upon the sale, other disposition or prepayment of any Pledged Loan or
Pledged Security or, with respect to a Pledged Loan included in an Eligible
Mortgage Pool, upon the sale or other disposition of the related Agency
Security.

 

(x)        With respect to any Pledged Loan, any of the Collateral Documents,
upon examination by Lender, are found not to be in compliance with the
requirements of this Agreement or the related Purchase Commitment.

 

(xi)       If, after giving effect to a new Warehousing Advance against a
Pledged Loan or to the payment of existing Warehousing Advances against Pledged
Loans, any of the limitations set forth in Exhibit D have been exceeded.

 

3.3(d)                          In addition to the payments required by Sections
3.3(a) and 3.3(c), if the principal amount of any Pledged Loan is prepaid in
whole or in part while a Warehousing Advance is outstanding against the Pledged
Loan, Borrower must pay to Lender, without the necessity of prior demand or
Notice from Lender, and Borrower authorizes

 

5

--------------------------------------------------------------------------------

 

Lender to charge its Operating Accounts for, the amount of the prepayment, to be
applied against the Warehousing Advance.

 

3.3(e)                           The proceeds of the sale or other disposition
of any Pledged Loan or Pledged Security must be paid directly by the Investor to
Borrower’s Cash Collateral Account.  Borrower must give Notice to Lender in
writing of the Pledged Loan or Pledged Security for which proceeds have been
received (including Notice to Lender in writing of any prepayment).  Upon
receipt of such Notice, Lender will apply any proceeds deposited into the
applicable Cash Collateral Account to the payment of the Warehousing Advances
related to the Pledged Loan or Pledged Security identified by Borrower in its
Notice, and such Pledged Loan or Pledged Security will be considered to have
been redeemed from pledge to the extent the related Warehousing Advance has been
paid in full.  Lender is entitled to rely upon a Borrower’s affirmation that
deposits in the applicable Cash Collateral Account represent payments from
Investors for the purchase of the Pledged Loan or Pledged Security specified by
Borrower in its Notice.  If the payment from an Investor for the purchase of a
Pledged Loan or Pledged Security is less than the outstanding Warehousing
Advances against such Pledged Loan or Pledged Security identified by Borrower in
its Notice, Borrower must pay to Lender, and Borrower authorizes Lender to
charge Borrower’s Operating Accounts for, an amount equal to that deficiency. 
As long as no Default or Event of Default exists, Lender will return to Borrower
any excess payment from an Investor for such Pledged Loan or Pledged Security.

 

3.3(f)                            Lender reserves the right at any time to
revalue any Pledged Loan or Pledged Security.  Borrower must pay to Lender,
without the necessity of prior demand or Notice from Lender, and Borrower
authorizes Lender to charge Borrower’s Operating Accounts for, any amount
required after any such revaluation to reduce the principal amount of the
Warehousing Advance outstanding against the revalued Pledged Loan or Pledged
Security to an amount equal to the Advance Rate for the applicable type of
Pledged Loan or Pledged Security multiplied by the Fair Market Value of the
Pledged Loan or Pledged Security.

 

3.4                               Facility Fee

 

Borrower shall pay to Lender an annual facility fee in an amount equal to
two-tenths of one percent (.2%) of the Warehousing Credit Limit (the “Facility
Fee”), to be paid quarterly in arrears, commencing on the first Business Day of
each Calendar Quarter following the Closing Date during the term of this
Agreement.  In the event Borrower exercises its right under Section 3.13 hereof
and seeks an incremental increase of the Standard Warehousing Credit Limit up to
the Maximum Warehousing Credit Limit, contemporaneously with Borrower’s request
for a Warehousing Advance relating to such incremental increase, Borrower shall
pay to Lender an additional commitment fee in the amount of $10,000 for each
Minimum Incremental Amount. For example, if the Standard Warehousing Credit
Limit were increased by Two Hundred Million Dollars ($200,000,000), the
additional commitment fee shall be $20,000.  Said fee shall be due and payable
in connection with each increase of the Standard Warehousing Credit Limit

 

6

--------------------------------------------------------------------------------

 

3.5                               [Intentionally Omitted.]

 

3.6                               Miscellaneous Fees and Charges

 

Borrower must pay or reimburse Lender, as applicable, for all Miscellaneous Fees
and Charges.  Borrower must pay all Miscellaneous Fees and Charges within five
(5) Business Days after the date of Lender’s notice thereof.

 

3.7                               Overdraft Advances

 

If, under the authorization given by Borrower pursuant to this Agreement, Lender
debits Borrower’s Operating Account to honor an item presented against an
Operating Account and that debit or direction results in an overdraft, Lender
may make an additional advance to fund that overdraft (“Overdraft Advance”). 
Borrower must pay (a) the outstanding amount of any Overdraft Advance, within
three (3) Business Days after the date of the Overdraft Advance, and
(b) interest on the amount of the Overdraft Advance, at a rate per annum equal
to the Applicable Rate plus Two percent (2%), within three (3) Business Days
after the date of Lender’s notice thereof.

 

3.8                               Method of Making Payments

 

3.8(a)                          (i)                           All payments of
interest, principal and fees shall be made in lawful money of the United States
in immediately available funds, without counterclaim or setoff and free and
clear of, and without any deduction or withholding for, any taxes or other
payments by wire transfer to Lender, or as otherwise provided in this
Agreement.  Payments shall be credited on the Business Day on which immediately
available funds are received prior to Five O’clock (5:00) p.m.; payments
received after Five O’clock (5:00) p.m. shall be credited on the next Business
Day.  All payments (regardless of whether such payment is sufficient to pay
fully all Obligations then due and payable) shall be applied (A) first to the
payment of all fees, expenses, and other amounts due to Lender (excluding
principal and interest), then (B) second to the payment of all fees, expenses
and other amounts due to Lender (excluding principal and interest), then
(C) third to accrued interest, and then (D) fourth to outstanding principal.  If
the due date is not a Business Day, payment is due on, and interest will accrue
to, the next Business Day.

 

3.8(b)                          Subject to Section 3.8(c) below, Borrower
authorizes Lender to charge Borrower’s Operating Accounts for any interest or
fees due and payable to Lender after giving at least two (2) Business Days’
Notice to Borrower.

 

3.8(c)                           While a Default or Event of Default exists,
Borrower authorizes Lender to charge Borrower’s Operating Accounts for any
Obligations due and payable to Lender, without the necessity of prior demand or
Notice from Lender.

 

3.8(d)                          All payments made on account of the Obligations
shall be made by Borrower to Lender.  No principal payments resulting from the
refinancing, sale or other disposition of Pledged Loans or Pledged Securities
shall be deemed to have been received by Lender until Lender has also received
the Notice required under Section 3.3(e).

 

7

--------------------------------------------------------------------------------

 

3.9                               Billings

 

Any changes in the interest rate and in the outstanding amount of the
Obligations which occur between the date of any billing and the due date of any
payment may be reflected in adjustments in the billing for a subsequent month. 
Neither the failure of Lender to submit a bill, nor any error in any such bill
shall excuse Borrower from the obligation to make full payment of all Borrower’s
payment obligations when due.

 

3.10                        Late Charges

 

Borrower shall pay, upon billing therefor, a “Late Charge” equal to three
percent (3%) of the amount of any payment of principal (other than principal due
at the Warehousing Maturity Date or the date on which Lender accelerates the
time for payment of the Loan after the occurrence of an Event of Default),
interest, or fees, which fees are not paid within ten (10) days of the due date
thereof.  Late Charges are: (a) payable in addition to, and not in limitation
of, the Default Rate; (b) intended to compensate Lender for administrative and
processing costs incident to late payments; (c) not interest; and (d) not
subject to refund or rebate or credit against any other amount due.

 

3.11                        Additional Provisions Relating to Interest Rate

 

3.11(a)                   If Lender has determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
Lender’s capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration
Lender’s policies with respect to capital adequacy), then, upon notice from
Lender to Borrower and delivery by Lender of a statement setting forth the
reduction in the rate of return experienced by Lender and the amount necessary
to compensate Lender under this Section 3.11(a), Borrower shall be obligated to
pay to Lender such additional amount or amounts as will compensate Lender for
such reduction.  Each determination by Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.

 

3.11(b)                   If Lender determines (which determination shall be
conclusive) that (i) by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Applicable Daily
Floating LIBO Rate for any day; or (ii) the Daily LIBO Rate will not adequately
and fairly reflect the cost to Lender of funding (including maintaining)
Warehousing Advances, then Lender shall give Borrower prompt notice thereof,
and, so long as such condition remains in effect, the Loan (and all outstanding
and future Warehousing Advances under the Loan) shall bear interest at the
Applicable Base Rate.

 

8

--------------------------------------------------------------------------------

 

3.11(c)                    Any and all payments by Borrower to or for the
account of Lender hereunder shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on Lender’s income, and franchise taxes imposed on it,
by the jurisdiction under the laws of which Lender is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as “Taxes”).  If Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement to Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.11(c)) Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions, (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law, and
(iv) Borrower shall furnish to Lender the original or a certified copy of a
receipt evidencing payment thereof.

 

3.11(d)                   Borrower also agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or from the execution or delivery of, or otherwise with respect to, this
Agreement (hereinafter referred to as “Other Taxes”).  Further, if Borrower
shall be required to deduct or pay any Taxes or Other Taxes from or in respect
of any sum payable under this Agreement to Lender, Borrower shall also pay to
Lender, at the time interest is paid, such additional amount that Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that Lender would
have received if such Taxes or Other Taxes had not been imposed.

 

3.11(e)                    Borrower agrees to indemnify Lender for (i) the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 3.11) paid by any of them and any liability (including penalties,
interest, and expenses) arising therefrom or with respect thereto; (ii) any
other amounts payable under Section 3.11; and (iii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  Payment under this Section 3.11(e) shall be made within 30 days
after the date that Lender makes a demand therefor.

 

3.11(f)                     In the event that Borrower is required to pay or
withhold any amount pursuant to Sections 3.11(c), 3.11(d), or 3.11(e), which
results in Borrower paying more than would have been the case without regard to
such Sections (an “Excess Payment”), Borrower shall have the option to terminate
the Warehousing Commitment in its entirety (but not in part) and this Agreement
(other than as to those provisions which by their terms survive the termination
of this Agreement), by giving Notice to Lender specifying the effective date of
such termination, which Notice may be given no earlier than three (3) Business
Days after making an Excess Payment and no later than thirty (30) days after

 

9

--------------------------------------------------------------------------------

 

making an Excess Payment.  Upon the effective date of the termination of this
Agreement by Borrower pursuant to this Section, Borrower shall pay all of the
Obligations in full.

 

3.11(g)                    Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if (x) any change in law shall make it unlawful for
Lender to make Warehousing Advances as LIBOR Loans, or to maintain outstanding
Warehousing Advances as LIBOR Loans or to give effect to its obligations as
contemplated hereby with respect to the Loan or any particular Warehousing
Advance as a LIBOR Loan or (y) at any time Lender reasonably determines that the
making or continuance of LIBOR Loans has become impracticable as a result of a
contingency occurring after the date hereof which adversely affects the London
interbank market, Lender may, by written notice to Borrower (i) declare that
LIBOR Loans will not thereafter be made by Lender hereunder, whereupon all
subsequent Warehousing Advances will be made as Base Rate Loans unless such
declaration shall be subsequently withdrawn; and/or (ii) require that any then
outstanding Warehousing Advances be converted to Base Rate Loans (and thereby
bear interest at the Applicable Base Rate), as of the effective date of such
notice.

 

3.12                        Continuing Authority of Authorized Representatives

 

Lender is authorized to rely upon the continuing authority of the Persons
hereafter designated by Borrower (“Authorized Representatives”) to bind Borrower
with respect to all matters pertaining to the Loan and the Loan Documents,
including, but not limited to, the submission of requests for Warehousing
Advances, and certificates with regard thereto, instructions with regard to the
Operating Accounts and, to the extent permitted under this Agreement, the
Collateral, and matters pertaining to the procedures and documentation for
Warehousing Advances.  Such authorization may be changed only upon written
notice to Lender accompanied by evidence, reasonably satisfactory to Lender, of
the authority of the person giving such notice and such notice shall be
effective not sooner than five (5) Business Days following receipt thereof by
Lender.  The Authorized Representatives as of the Closing Date are listed on
Exhibit E.  Lender shall have a right of approval, not to be unreasonably
withheld or delayed, over the identity of the Authorized Representatives so as
to assure Lender that each Authorized Representative is a responsible and senior
official of Borrower.

 

3.13                        Increases to Standard Warehousing Credit Limit

 

Borrower shall have the right, upon no less than five days prior written notice
to Lender, during the term of this Agreement, to request one or more incremental
increases to the Standard Warehousing Credit Limit, in amounts of One Hundred
Million Dollars ($100,000,000.00) each (each is herein a “Minimum Incremental
Amount”), up to the Maximum Warehousing Credit Limit.  Borrower’s notice shall
indicate (i) the amount of the incremental increase of the Standard Warehousing
Credit Limit and (ii) the effective date for the increase of the Standard
Warehousing Credit Limit.  Any incremental increase shall be made at the
discretion of Lender, provided that Lender’s consent to such incremental
increase shall not be unreasonably withheld.  Provided such incremental increase
is approved by Lender, said incremental increase of the

 

10

--------------------------------------------------------------------------------

 

Standard Warehousing Credit Limit shall remain in effect for a period of forty
five (45) days following such effective date.

 

4.                                      COLLATERAL

 

4.1                               Grant of Security Interest

 

As security for the payment of its obligations under the Warehousing Note and
for the payment and performance of all of the Obligations, Borrower grants a
security interest to Lender, in all of Borrower’s right, title and interest in
and to the following described property, whether now owned or whether acquired
or arising after the date of this Agreement (“Collateral”):

 

4.1(a)                          All amounts advanced by Lender to or for the
account of Borrower under this Agreement to fund a Mortgage Loan until that
Mortgage Loan is closed and those funds disbursed.

 

4.1(b)                          All Mortgage Loans, including all Mortgage
Notes, Mortgages and Security Agreements evidencing or securing those Mortgage
Loans, that are delivered or caused to be delivered to Lender (including
delivery to a third party on behalf of Lender), or that otherwise come into the
possession, custody or control of Lender (including the possession, custody or
control of a third party on behalf of Lender), in each case in respect of which
Lender has made a Warehousing Advance under this Agreement (collectively,
“Pledged Loans”).

 

4.1(c)                           All Mortgage-backed Securities that are created
in whole or in part on the basis of Pledged Loans or that are delivered or
caused to be delivered to Lender or that otherwise come into the possession,
custody or control of Lender, or its agent, bailee or custodian as assignee, or
that are pledged to Lender or, for such purpose are registered by book-entry in
the name of Lender (including registration in the name of a third party on
behalf of Lender), in each case in respect of which a Warehousing Advance has
been made by Lender under this Agreement (collectively, “Pledged Securities”).

 

4.1(d)                          All private mortgage insurance and all
commitments issued by the FHA to insure or guarantee any Pledged Loan; all
Purchase Commitments held by Borrower covering Pledged Loans or Pledged
Securities, and all proceeds from the sale of Pledged Loans or Pledged
Securities to Investors pursuant to those Purchase Commitments; and all personal
property, contract rights, servicing rights or contracts and servicing fees and
income or other proceeds, amounts and payments payable to Borrower as
compensation or reimbursement, accounts, payments, intangibles and general
intangibles of every kind relating to Pledged Loans, Pledged Securities,
Purchase Commitments, FHA commitments and private mortgage insurance and
commitments relating to Pledged Loans and Pledged Securities, and all other
documents or instruments relating to Pledged Loans and Pledged Securities,
including any interest of Borrower in any fire, casualty or hazard insurance
policies and any awards made by any public body or decreed by any court of
competent jurisdiction for a taking or for degradation of value in any eminent
domain proceeding as the same relate to Pledged Loans.

 

11

--------------------------------------------------------------------------------

 

4.1(e)                           All escrow accounts, documents, instruments,
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records (including all information, records,
tapes, data, programs, discs and cards) necessary or helpful in the
administration or servicing of the Collateral) and other information and data of
Borrower relating to the Collateral.

 

4.1(f)                            The Operating Accounts, the Cash Collateral
Accounts, and all cash, whether now existing or acquired after the date of this
Agreement, delivered to or otherwise in the possession of Lender, or Lender’s
agent, bailee or custodian or designated on the books and records of Borrower as
assigned and pledged to Lender, including all cash deposited in the Cash
Collateral Account.

 

4.1(g)                           All Hedging Arrangements related to the
Collateral (“Pledged Hedging Arrangements”) and Borrower’s accounts in which
those Hedging Arrangements are held (“Pledged Hedging Accounts”), including all
rights to payment arising under the Pledged Hedging Arrangements and the Pledged
Hedging Accounts, except that Lender’s security interest in the Pledged Hedging
Arrangements and Pledged Hedging Accounts applies only to benefits, including
rights to payment, related to the Collateral.

 

4.1(h)                          All cash and non-cash proceeds of the
Collateral, including all dividends, distributions and other rights in
connection with, and all additions to, modifications of and replacements for,
the Collateral, and all products and proceeds of the Collateral, together with
whatever is receivable or received when the Collateral or proceeds of Collateral
are sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary, including all rights to payment with
respect to any cause of action affecting or relating to the Collateral or
proceeds of Collateral.

 

4.2                               Maintenance of Collateral Records

 

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must preserve and maintain, at its chief executive office and
principal place of business or in a regional office approved by Lender, and,
promptly upon request, make available to Lender the originals, or copies in any
case where the originals have been delivered to Lender or to an Investor, of the
Mortgage Notes, Mortgages and Security Agreements included in Pledged Loans,
Mortgage-backed Securities delivered to Lender as Pledged Securities, Purchase
Commitments, and all related Mortgage Loan documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.

 

4.3                               Release of Security Interest in Pledged Loans
and Pledged Securities

 

4.3(a)                          Except as provided in Section 4.3(b), Lender
will release its security interest in a Pledged Loan and all of the Collateral
related to such Pledged Loan, as such Collateral is described in Section 4.1,
only against payment to Lender of the Release Amount in connection with such
Pledged Loan.  If a Pledged Loan is transferred to a pool custodian or an
Investor for inclusion in a Mortgage Pool and Lender’s security interest

 

12

--------------------------------------------------------------------------------

 

in such Pledged Loan and all of the Collateral related to the Pledged Loan, as
such Collateral is described in Section 4.1 is not released before the issuance
of the related Mortgage-backed Security, then that Mortgage-backed Security,
when issued, is a Pledged Security, Lender’s security interest continues in such
Pledged Loan and all of the Collateral related to such Pledged Loan, as such
Collateral is described in Section 4.1, backing that Pledged Security and Lender
is entitled to possession of the Pledged Security in the manner provided in this
Agreement.

 

4.3(b)                          If a Pledged Loan is transferred to an Approved
Custodian and included in an Eligible Mortgage Pool, Lender’s security interest
in such Pledged Loan and all of the Collateral related to such Pledged Loan, as
such Collateral is described in Section 4.1, included in the Eligible Mortgage
Pool will be released upon the delivery of the Agency Security to Lender
(including delivery to or registration in the name of a third party on behalf of
Lender) and that Agency Security is a Pledged Security.  Lender’s security
interest in that Pledged Security will be released only against payment to
Lender of the Release Amount in connection with the Mortgage Loans backing that
Pledged Security.

 

4.3(c)                           Lender has the exclusive right to possession of
all Pledged Securities or, if Pledged Securities are issued in book-entry form
or issued in certificated form and delivered to a clearing corporation (as that
term is defined in the Uniform Commercial Code of Pennsylvania) or its nominee,
Lender has the right to have the Pledged Securities registered in the name of a
securities intermediary (as that term is defined in the Uniform Commercial Code
of Pennsylvania) in an account containing only customer securities and credited
to an account of Lender.  Lender has no duty or obligation to deliver Pledged
Securities to an Investor or to credit Pledged Securities to the account of an
Investor or an Investor’s designee except against payment for those Pledged
Securities.  Borrower acknowledges that Lender may enter into one or more
standing arrangements with securities intermediaries with respect to Pledged
Securities issued in book entry form or issued in certificated form and
delivered to a clearing corporation or its designee, under which the Pledged
Securities are registered in the name of the securities intermediary, and
Borrower agrees, upon request of Lender, to execute and deliver to those
securities intermediaries their respective written concurrence in any such
standing arrangements.

 

4.3(d)                          If no Default or Event of Default occurs (or, if
a Default or Event of Default has occurred, such Default or Event of Default has
been cured or waived), Borrower may redeem a Pledged Loan and all of the
Collateral related to a Pledged Loan, as such Collateral is described in Section
4.1, or Pledged Security from Lender’s security interest by notifying Lender of
its intention to redeem the Pledged Loan or Pledged Security from pledge and
paying, or causing an Investor to pay, to Lender, for application as a
prepayment on the principal balance of the Warehousing Note, the Release Amount
in connection with such Pledged Loan or the Pledged Loans backing that Pledged
Security.

 

4.3(e)                           After a Default or Event of Default occurs,
Lender may, with no liability to Borrower or any other Person, continue to
release its security interest in any Pledged Loan and all of the Collateral
related to such Pledged Loan, as such Collateral is described in Section

 

13

--------------------------------------------------------------------------------

 

4.1, or Pledged Security against payment of the Release Amount for such Pledged
Loan or for the Pledged Loans backing that Pledged Security.

 

4.3(f)                            The amount to be paid by Borrower to obtain
the release of Lender’s security interest in a Pledged Loan and all of the
Collateral related to such Pledged Loan, as such Collateral is described in
Section 4.1 (“Release Amount”) will be (1) in connection with the sale of a
Pledged Loan by Lender while an Event of Default exists, the amount paid to
Lender in a commercially reasonable disposition of that Pledged Loan and
(2) otherwise, the principal amount of the Warehousing Advance outstanding
against the Pledged Loan together with all accrued and unpaid interest thereon.

 

4.4                               Collection and Servicing Rights

 

4.4(a)                          If no Event of Default exists, Borrower may
service and receive and collect directly all sums payable to Borrower in respect
of the Collateral other than proceeds of any Purchase Commitment or proceeds of
the sale of any Collateral.  All proceeds of any Purchase Commitment or any
other sale of Collateral must be paid directly to the Cash Collateral Account
for application as provided in this Agreement.

 

4.4(b)                          After an Event of Default occurs and remains
continuing, Lender or its designee is entitled to service and receive and
collect all sums payable to Borrower in respect of the Collateral, and in such
case, subject to any applicable requirements of the relevant Federal Agency,
(1) Lender or its designee in its discretion may, in its own name, in the name
of Borrower or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but Lender has no obligation to do so, (2) Borrower must, if
Lender requests it to do so, hold in trust for the benefit of Lender and
immediately pay to Lender at its office designated by Notice, all amounts
received by Borrower upon or in respect of any of the Collateral, advising
Lender as to the source of those funds, and (3) all amounts so received and
collected by Lender will be held by it as part of the Collateral and applied by
Lender as provided in this Agreement.

 

4.5                               Return of Collateral at End of Warehousing
Commitment

 

If (a) the Warehousing Commitment has expired or has been terminated, and (b) no
Warehousing Advances, interest or other Obligations are outstanding and unpaid,
Lender will release its security interest and will deliver all Collateral in its
possession to Borrower at Borrower’s expense.  Borrower’s acknowledgement or
receipt for any Collateral released or delivered to Borrower under any provision
of this Agreement is a complete and full acquittance for the Collateral so
returned, and Lender is discharged from any liability or responsibility for that
Collateral.

 

4.6                               Delivery of Collateral Documents

 

4.6(a)                          Lender may deliver documents relating to the
Collateral to Borrower for correction or completion under a Trust Receipt.

 

14

--------------------------------------------------------------------------------

 

4.6(b)                          If no Default or Event of Default exists, upon
delivery by Borrower to Lender of shipping instructions pursuant to the
applicable Exhibit B, Lender will deliver the Mortgage Notes evidencing Pledged
Loans or Pledged Securities together with all related loan documents and pool
documents previously received by Lender under the requirements of the applicable
Exhibit B to the designated Investor or Approved Custodian or to another party
designated by Borrower and acceptable to Lender in its sole discretion.

 

4.6(c)                           If a Default or Event of Default exists, Lender
may, without liability to Borrower or any other Person, continue to deliver
Pledged Loans or Pledged Securities, together with all related loan documents
and pool documents in Lender’s possession, to the applicable Investor or
Approved Custodian or to another party acceptable to Lender in its sole
discretion.

 

4.7                               Borrower Remains Liable

 

Anything herein to the contrary notwithstanding, Borrower shall remain liable
under each item of the Collateral granted by it to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms thereof and any other agreement giving rise thereto,
and in accordance with and pursuant to the terms and provisions thereof. 
Whether or not Lender has exercised any rights in any of the Collateral, Lender
shall not have any obligation or liability (other than for gross negligence or
willful misconduct) under any of the Collateral (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by Lender
of any payment relating thereto, nor shall Lender be obligated in any manner to
perform any of the obligations of Borrower under or pursuant to any of the
Collateral (or any agreement giving rise thereto) to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party under any of the
Collateral (or any agreement giving rise thereto), to present or file any claim,
to take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.

 

5.                                      CONDITIONS PRECEDENT

 

5.1                               Initial Advance

 

The effectiveness of this Agreement is subject to the satisfaction, in the sole
discretion of Lender, of the following conditions precedent:

 

5.1(a)                          Lender must receive the following, all of which
must be satisfactory in form and content to Lender, in its sole discretion:

 

(i)         The Warehousing Note, this Agreement, the Amended and Restated
Guaranty and any other Loan Document, duly executed by Borrower and/or Parent,
as applicable.

 

(ii)        Each Loan Party’s organizational documents, certified as true and
complete by an appropriate officer or other Person.

 

15

--------------------------------------------------------------------------------

 

(iii)       Certificates of legal existence and good standing from the Secretary
of State of Delaware for each Loan Party, dated within thirty (30) days of the
date of this Agreement.

 

(iv)       Such certificates of resolutions or other action, incumbency
certificates and/or other certificates of responsible officers of the Borrower
and Guarantor as Lender may require evidencing (A) the authority of each entity
to enter into this Agreement and the other Loan Documents and (B) the identity,
authority and capacity of each Authorized Representative thereof authorized to
act as an Authorized Representative in connection with this Agreement and the
other Loan Documents.

 

(v)        Uniform Commercial Code, tax lien and judgment searches of the
appropriate public records for Borrower that do not disclose the existence of
any Lien on the Collateral other than in favor of Lender.

 

(vi)       Copies of Borrower’s errors and omissions insurance policy or
mortgage impairment insurance policy, and blanket bond coverage policy, or
certificates in lieu of policies, showing compliance by Borrower as of the date
of this Agreement with the related provisions of Section 7.9.

 

(vii)      An opinion from counsel for the Loan Parties in form and substance
satisfactory to Lender concerning, among other matters (i) the legal existence,
good standing and qualification to do business of each Loan Party, (ii) the
power and authority of each Loan Party to enter into and perform the Loan
Documents, (iv) the authorization of the individuals executing and delivering
Loan Documents on behalf of each Loan Party to do so, (v) the enforceability of
each Loan Party’s obligations under the Loan Documents, (vi) the absence of any
pending or threatened material litigation against Borrower, (vii) the validity
and perfection of Lender’s security interest in the Collateral, (viii) the
non-contravention of each Loan Party’s obligations under the Loan Documents,
under each Loan Party’s charter documents or under any material agreements or
legal proceedings to which it is a party or by which it is bound, and (ix) such
other matters as Lender reasonably shall request consistent with loan facilities
similar to the loan facility established by this Agreement.  Such opinion shall
be addressed to Lender and its permitted successors and assigns.

 

(viii)     Such financial statements and other information as Lender shall have
reasonably requested.

 

(ix)       Such other documents as Lender reasonably may require, duly executed
and delivered, and evidence satisfactory to Lender of the occurrence of any
further conditions precedent to the closing of the credit facility established
hereby.

 

5.1(b)         Lender shall have filed Uniform Commercial Code financing
statements in such jurisdictions as Lender shall have determined to be
appropriate in order to perfect the

 

16

--------------------------------------------------------------------------------

 

security interest in the Collateral granted by Borrower pursuant to this
Agreement or any other Loan Document.

 

5.1(c)         Borrower shall have (i) paid to Lender, as applicable, all
amounts due as of the Closing Date, and (ii) paid or reimbursed Lender, as
applicable, for all its attorneys’ fees and expenses incurred in connection with
this Agreement and the other Loan Documents.

 

5.2                               Each Advance

 

The effectiveness of this Agreement, including Lender’s obligation to make
Warehousing Advances is subject to the satisfaction, in the sole discretion of
Lender, as of the date of each Warehousing Advance, of the following additional
conditions precedent:

 

5.2(a)         Borrower must have delivered to Lender the Warehousing Advance
Request and the Collateral Documents required by, and must have satisfied the
procedures and substantive requirements set forth in, Article 2 and the Exhibits
described in that Article.  All items delivered to Lender must be satisfactory
to Lender in form and content, and Lender may reject any item that does not
satisfy the requirements of this Agreement or the applicable Purchase
Commitment.  Confirmation of the date of the requested Warehousing Advance will
constitute a representation by Borrower that all necessary actions have been
taken to qualify the Mortgage Loan for purchase by the Investor and that the
borrowing hereunder is permitted by Investor regulations.

 

5.2(b)         Lender must have received evidence satisfactory to it as to the
making or continuation of any book entry or the due filing and recording in all
appropriate offices of all financing statements and other instruments necessary
to perfect the security interest of Lender in the Collateral under the Uniform
Commercial Code or other applicable law.

 

5.2(c)         The representations and warranties of Borrower contained in
Article 6 and Article 9 must be accurate and complete in all material respects
as if made on and as of the date of each Warehousing Advance.

 

5.2(d)         Borrower must have performed all agreements to be performed by
them under this Agreement, and after giving effect to the requested Warehousing
Advance, no Default or Event of Default will exist under this Agreement.

 

5.2(e)         There shall not have been any material adverse change in the
financial condition, business, or affairs of Borrower since the date of this
Agreement which in Lender’s good faith judgment may jeopardize in a material
manner the ability of Borrower to perform fully its obligations under each
applicable Loan Document.

 

5.2(f)         Lender shall have received and approved such other documents, and
certificates as Lender reasonably may request (including without limitation the
documents to be executed by the Mortgagor and Borrower), in form and substance
reasonably satisfactory to Lender.

 

5.2(g)         Prior to any Warehousing Advance being made against any otherwise
Eligible Loan, Borrower shall have provided to Lender copies of all documents,
agreements and other

 

17

--------------------------------------------------------------------------------

 

materials and information concerning Borrower’s status as an originator and
seller of such type of Mortgage Loan for the applicable Federal Agency as Lender
may require.

 

Delivery of a Warehousing Advance Request by Borrower will be deemed a
representation by Borrower that all conditions set forth in this Section have
been satisfied as of the date of the Warehousing Advance.

 

5.3                               Force Majeure

 

Notwithstanding Borrower’s satisfaction of the conditions set forth in this
Agreement, Lender has no obligation to make a Warehousing Advance if Lender is
prevented from obtaining the funds necessary to make a Warehousing Advance, or
is otherwise prevented from making a Warehousing Advance as a result of any
fire, flood or other casualty, failure of power, strike, lockout or other labor
trouble, banking moratorium, embargo, sabotage, confiscation, condemnation,
riot, civil disturbance, insurrection, act of terrorism, war or other activity
of armed forces, act of God or other similar reason beyond the control of 
Lender.  Lender will make the requested Warehousing Advance as soon as
reasonably possible following the occurrence of such an event (provided that all
applicable terms and conditions relating to such Warehousing Advance continue to
be satisfied).

 

6.                                      GENERAL REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants to Lender as to itself and Guarantor, as of the
date of this Agreement and as of the date of each Warehousing Advance Request
and the making of each Warehousing Advance, that:

 

6.1                               Place of Business

 

Borrower’s chief executive office and principal place of business is 7501
Wisconsin Avenue, Suite 1200, Bethesda, Maryland 20814.

 

6.2                               Organization; Good Standing

 

Borrower is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the full legal
power and authority to own its property and to carry on its business as
currently conducted.  Borrower is duly qualified as a limited liability company
to do business and is in good standing in each jurisdiction in which the
transaction of its business makes qualification necessary, except in
jurisdictions, if any, where a failure to be in good standing has no material
adverse effect on Borrower’s business, operations, assets or financial condition
as a whole.  For the purposes of this Agreement, good standing includes
qualification for all licenses and payment of all taxes required in the
jurisdiction of its formation and in each jurisdiction in which Borrower
transacts business.  Exhibit K hereto sets forth all foreign qualifications and
mortgage Lender and mortgage servicer licenses held by Borrower as of the date
of this Agreement.

 

18

--------------------------------------------------------------------------------

 

6.3                               Authorization and Enforceability

 

Borrower has the power and authority to execute, deliver and perform this
Agreement, the Warehousing Note and the other Loan Documents and Borrower has
the power and authority to obtain the Warehousing Advances under this
Agreement.  The execution, delivery and performance by Borrower of this
Agreement, the Warehousing Note and the other Loan Documents and the Warehousing
Advances requested and made under this Agreement and the Warehousing Note have
been duly and validly authorized by all necessary limited liability company
action on the part of Borrower (which action has been modified or rescinded, and
is in full force and effect) and does not and will not conflict with or violate
any applicable provision of law, of any judgments binding upon Borrower, or the
certificate of formation and limited liability company operating agreement of
Borrower, conflict with or result in a breach of, constitute a default or
require any consent under, or result in or require or allow the acceleration of
any indebtedness of Borrower under any agreement, instrument or indenture to
which it is a party or by which it or its property may be bound or affected, or
result in the creation of any Lien upon any property or assets of Borrower
(other than the Lien on the Collateral granted under this Agreement).  This
Agreement, the Warehousing Note and the other Loan Documents constitutes the
legal, valid and binding obligations of Borrower, enforceable in accordance with
their respective terms, except that enforceability may be limited by bankruptcy,
insolvency or other such laws affecting the enforcement of creditors’ rights and
general principles of equity.

 

6.4                               Approvals

 

The execution and delivery of this Agreement, the Warehousing Note and the other
Loan Documents and the performance of Borrower’s obligations under this
Agreement, the Warehousing Note and the other Loan Documents and the validity
and enforceability of this Agreement, the Warehousing Note and the other Loan
Documents do not require any license, consent, approval or other action of any
agency, commission, instrumentality or other regulatory body or authority (in
each case, whether federal, state or local, domestic or foreign) other than
those that have been obtained and remain in full force and effect or those with
respect to which the failure to obtain may reasonably be expected to result in a
material adverse change in Borrower’s business, operations, assets or financial
conditions as a whole.

 

6.5                               Financial Condition

 

The balance sheet of Borrower as of December 31, 2016 for the twelve (12) month
period then ended, and the related statements of income and cash flows furnished
to Lender, fairly present the financial condition of Borrower as of such date
and the results of its operations for the twelve (12) month period then ended.

 

6.6                               Litigation

 

Except as listed on Schedule 6.6, as of the date hereof, there are no actions,
claims, suits or proceedings pending or, to Borrower’s knowledge, threatened or
reasonably anticipated against or affecting Borrower in any court or before any
arbitrator or before any agency, board, bureau, commission, instrumentality or
other administrative or regulatory body (in each case, whether federal, state or
local, domestic or foreign) that, if adversely determined, may reasonably be

 

19

--------------------------------------------------------------------------------

 

expected to result in a material adverse change in Borrower’s business,
operations, assets or financial condition as a whole, or that would affect the
validity or enforceability of this Agreement, the Warehousing Note or any other
Loan Document.

 

6.7                               Compliance with Laws

 

Borrower is not in violation of any provision of any law, or of any judgment,
award, rule, regulation, order, decree, writ or injunction of any court or
public regulatory body or authority that could result in a material adverse
change in Borrower’s business, operations, assets or financial condition as a
whole or that would affect the validity or enforceability of this Agreement, the
Warehousing Note or any other Loan Document.

 

6.8                               Regulation U

 

Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds of any Warehousing Advance made under
this Agreement will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

 

6.9                               Investment Company Act

 

Borrower is not an “investment company” or controlled by an “investment company”
within the meaning of the Investment Company Act.

 

6.10                        Payment of Taxes

 

Borrower has filed or caused to be filed all federal, state and local income,
excise, property and other tax returns that are required to be filed with
respect to the operations of Borrower, all such returns are true and correct and
Borrower has paid or caused to be paid all taxes shown on those returns or on
any assessment, to the extent that those taxes have become due, including all
FICA payments and withholding taxes, if appropriate.  The amounts reserved as a
liability for income and other taxes payable in the financial statements
described in Section 6.5 are sufficient for payment of all unpaid federal, state
and local income, excise, property and other taxes, whether or not disputed, of
Borrower accrued for or applicable to the period and on the dates of those
financial statements and all years and periods prior to those financial
statements and for which Borrower may be liable in its own right or as
transferee of the assets of, or as successor to, any other Person.  No tax Liens
have been filed and no material claims are being asserted against Borrower or
any property of Borrower with respect to any taxes, fees or charges.

 

6.11                        Agreements

 

Borrower is not a party to any agreement, instrument or indenture or subject to
any restriction materially and adversely affecting its business, operations,
assets or financial condition.  Borrower is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement, instrument, or indenture which default could result
in a material adverse change in Borrower’s business, operations, assets or
financial condition as a whole.  No holder of any indebtedness of Borrower has
given notice of

 

20

--------------------------------------------------------------------------------

 

any asserted default under that indebtedness, and no liquidation or dissolution
of Borrower and no receivership, insolvency, bankruptcy, reorganization or other
similar proceedings relative to Borrower or any of its properties is pending or
to the knowledge of Borrower threatened.

 

6.12                        Title to Properties

 

Borrower has good, valid, insurable and (in the case of real property)
marketable title to all of its properties and assets (whether real or personal,
tangible or intangible) reflected on the financial statements described in
Section 6.5, except for those properties and assets that Borrower has disposed
of since the date of those financial statements either in the ordinary course of
business or because they were no longer used or useful in the conduct of
Borrower’s business.  All of Borrower’s properties and assets are free and clear
of all Liens except as disclosed in Borrower’s financial statements.

 

6.13                        ERISA

 

Each Plan is in compliance with all applicable requirements of ERISA and the
Internal Revenue Code and with all material applicable rulings and regulations
issued under the provisions of ERISA and the Internal Revenue Code setting forth
those requirements, except where any failure to comply would not result in a
material loss to Borrower or any ERISA Affiliate.  All of the minimum funding
standards or other contribution obligations applicable to each Plan have been
satisfied.  No Plan is a Multiemployer Plan or a defined-benefit pension plan
subject to Title IV of ERISA.

 

6.14                        No Retiree Benefits

 

Except as required under Section 4980B of the Internal Revenue Code, Section 601
of ERISA or applicable state law, Borrower is not obligated to provide
post-retirement medical or insurance benefits with respect to employees or
former employees.

 

6.15                        Assumed Names

 

Borrower does not originate Mortgage Loans or otherwise conduct business under
any names other than its legal name and the assumed names set forth on
Exhibit G.  Borrower has made all filings and taken all other action as may be
required under the laws of any jurisdiction in which it originates Mortgage
Loans or otherwise conducts business under any assumed name.  Borrower’s use of
the assumed names set forth on Exhibit G does not conflict with any other
Person’s legal rights to any such name, nor otherwise give rise to any liability
by Borrower to any other Person.  Borrower may amend Exhibit G to add or delete
any assumed names used by Borrower to conduct business.  An amendment to
Exhibit G to add an assumed name is not effective until a Borrower has delivered
to Lender an assumed name certificate in the jurisdictions in which the assumed
name is to be used, which must be satisfactory in form and content to Lender in
its sole discretion.  In connection with any amendment to delete a name from
Exhibit G, Borrower represents and warrants that it has ceased using that
assumed name in all jurisdictions.

 

21

--------------------------------------------------------------------------------

 

6.16                        Servicing

 

Exhibit H is a true and complete list of Borrower’s Servicing Portfolio as of
June 30, 2017.  All of Borrower’s Servicing Contracts relating to the Collateral
hereunder and involving aggregate consideration paid to Borrower in an amount
greater than or equal to Five Hundred Thousand Dollars ($500,000.00) for each of
the two most recent Fiscal Years of Borrower are in full force and effect, and
are unencumbered by Liens other than pursuant to the Term Loan Agreement.  No
event of default or event that, with notice or lapse of time or both, would
become an event of default, exists under any of Borrower’s Servicing Contracts
involving aggregate consideration paid to Borrower in an amount greater than or
equal to Five Hundred Thousand Dollars ($500,000.00) for each of the two most
recent Fiscal Years of Borrower.

 

6.17                        Foreign Asset Control Regulations.

 

Neither the making of the Warehousing Advances nor the use of the proceeds of
any thereof (or any other Loan) will violate the Trading With the Enemy Act (50
U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy Act”) or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets Control
Regulations”) or any enabling legislation or executive order relating thereto
(which for the avoidance of doubt shall include, but shall not be limited to
(a) Executive Order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56).  Furthermore,
neither Borrower nor any of its affiliates (a) is or will become a “blocked
person” as described in the Executive Order, the Trading With the Enemy Act or
the Foreign Assets Control Regulations or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person.”

 

7.                                      AFFIRMATIVE COVENANTS

 

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must, unless Lender consents in writing:

 

7.1                               Payment of Obligations

 

Punctually pay or cause to be paid all Obligations, including the Obligations
payable under this Agreement and the Warehousing Note in accordance with their
terms.

 

7.2                               Financial Statements

 

Deliver to Lender, in form and detail reasonably satisfactory to Lender:

 

7.2(a)                          As soon as available and in any event within one
hundred twenty (120) days after the end of each Fiscal Year of the Parent,
audited consolidated, and consolidating with respect to Borrower, Fiscal
Year-end statements of income and cash flows of the Parent for that year, and
the related consolidated, and consolidating with respect to Borrower,

 

22

--------------------------------------------------------------------------------

 

audited balance sheet as of the end of that year (setting forth in comparative
form the corresponding figures for the preceding Fiscal Year), all in reasonable
detail and accompanied by (1) an opinion as to those financial statements in
form and substance reasonably satisfactory to Lender and prepared by an
independent certified public accounting firm reasonably acceptable to Lender (it
being acknowledged by Lender that KPMG LLP currently is an acceptable
independent certified public accounting firm),  and (2) if then available or
otherwise within fifteen (15) days of receipt by the Parent, any management
letters, management reports or other supplementary comments or reports delivered
by those accountants to the Parent;

 

7.2(b)                          As soon as available and in any event within
sixty (60) days after the end of each Calendar Quarter of the Parent, including
its last Calendar Quarter, consolidated, and consolidating with respect to
Borrower, interim statements of income for that fiscal quarter and the period
from the beginning of the Fiscal Year to end of that Calendar Quarter, and the
related consolidated and consolidating balance sheet (including contingent
liabilities) as at the end of that Calendar Quarter, all in reasonable detail,
subject, however, to year-end audit adjustments; and

 

7.2(c)                           Together with each delivery of financial
statements required by this Section, a Compliance Certificate substantially in
the form of Exhibit I.

 

7.3                               Other Borrower Reports

 

Deliver to Lender:

 

7.3(a)                          As soon as available and in any event within
sixty (60) days after the end of each Calendar Quarter, a consolidated report
(“Servicing Report”) as of the end of the Calendar Quarter, as to all Mortgage
Loans the servicing rights to which are owned by the Parent or its Affiliates,
and separately for Borrower (in each case, specified by investor type, recourse
and non-recourse) regardless of whether the Mortgage Loans are Pledged Loans.
The Servicing Report must be in similar summary form as previously presented to
Lender (or as Lender otherwise may agree), and must, at a minimum, indicate
which Mortgage Loans (1) are current and in good standing, (2) are more than
thirty (30), sixty (60) or ninety (90) days past due, (3) are the subject of
pending bankruptcy or foreclosure proceedings, or (4) have been converted
(through foreclosure or other proceedings in lieu of foreclosure) into real
estate owned by a member of the Parent’s consolidated group, and include, by
Mortgage Loan type (x) weighted average coupon, (y) weighted average maturity,
and (z) weighted average servicing fee.

 

7.3(b)                          As soon as available and in any event within
sixty (60) days after the end of each calendar quarter, a loan production report
as of the end of that quarter, presenting (i) the total dollar volume and the
number of Mortgage Loans originated and closed or purchased during that quarter
and for the Fiscal Year-to-date, specified by property type, loan type and
(ii) as to any Mortgage Loans sold in such quarter, the Investor to whom each
Mortgage Loan was sold.

 

23

--------------------------------------------------------------------------------

 

7.3(c)                           As soon as available, but in any event at least
sixty (60) days before the end of each Fiscal Year, preliminary forecasts
prepared by management of Borrower, in form satisfactory to Lender, of the
balance sheets and statements of income or operations and cash flows of Borrower
on a calendar quarterly basis for the immediately following Fiscal Year
(including the Fiscal Year in which the Maturity Date occurs).

 

7.3(d)                          Other reports in respect of Pledged Loans or
Pledged Securities, including, without limitation, copies of purchase
confirmations issued by Investors purchasing Pledged Loans from Borrower, in
such detail and at such times as Lender in its discretion may reasonably
request.

 

7.3(e)                           With reasonable promptness, all further
information regarding the business, operations, assets or financial condition of
Borrower as Lender may reasonably request, including copies of any audits
completed by Fannie Mae, FHA or Ginnie Mae  (if permitted by the applicable
Federal Agency).

 

7.3(f)                            As soon as available and in any event within
thirty (30) days after the end of each Calendar Quarter, a report as of the end
of such Calendar Quarter detailing all requests that Borrower repurchase
Mortgage Loans and the status of each such request and any indemnification or
similar agreement to which Borrower is a party in connection with any such
request.

 

7.4                               Maintenance of Existence; Conduct of Business

 

Preserve and maintain its existence as a limited liability company in good
standing and all of its rights, privileges, licenses and franchises necessary or
desirable in the normal conduct of its business, including its eligibility as
Lender, seller/servicer or issuer as described under Section 9.4; conduct its
business in an orderly and efficient manner; maintain a net worth of acceptable
assets as required for maintaining Borrower’s eligibility as Lender,
seller/servicer or issuer as described under Section 9.4; and make no material
change in the nature or character of its business or engage in any business in
which it was not engaged on the date of this Agreement.

 

7.5                               Compliance with Applicable Laws

 

Comply with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority, a breach of which could result in a
material adverse change in Borrower’s business, operations, assets, or financial
condition as a whole or on the enforceability of this Agreement, the Warehousing
Note, any other Loan Document or any Collateral, except where contested in good
faith and by appropriate proceedings.

 

7.6                               Inspection of Properties and Books;
Operational Reviews

 

Permit Lender, and any Assignee or Participant (and their authorized
representatives) to discuss the business, operations, assets and financial
condition of Borrower with Borrower’s senior officers, and other management
officials, agents and employees, and to examine and make copies or extracts of
Borrower’s books of account, all at such reasonable times as Lender, any
Assignee or any Participant may request.  Provide their accountants with a copy
of this Agreement promptly after its execution and authorize and instruct them
to answer candidly all questions that

 

24

--------------------------------------------------------------------------------

 

the officers of Lender, any Assignee or Participant or any authorized
representatives thereof may address to them in reference to the financial
condition or affairs of Borrower.  Borrower may have representatives in
attendance at any meetings held between the officers or other representatives of
Lender, any Assignee or Participant and Borrower’s accountants under this
authorization.  Permit Lender, any Assignee or Participant (and their authorized
representatives) access upon reasonable Notice and during normal business hours
to Borrower’s premises and records for the purpose of conducting a review of
Borrower’s general mortgage business methods, policies and procedures, auditing
its loan files and reviewing the financial and operational aspects of Borrower’s
business.

 

7.7                               Notice

 

Give prompt Notice to Lender of (a) any action, suit or proceeding instituted by
or against Borrower in any federal or state court or before any agency, board,
bureau, commission, instrumentality or other administrative or regulatory body
(in each case, whether federal, state or local, domestic or foreign), which
action, suit or proceeding has at issue in excess of Five Million Dollars
($5,000,000.00) or any such proceedings threatened against Borrower in a writing
containing the details of that action, suit or proceeding; (b) the filing,
recording or assessment of any Lien for any federal, state or local taxes,
assessments or other governmental charges against Borrower, any of its assets,
other than a Lien for taxes, assessments or other governmental charges on real
property securing or that previously secured an individual Mortgage Loan that is
not a Pledged Loan; (c) the occurrence of a Default or an Event of Default;
(d) the suspension, revocation or termination of Borrower’s eligibility, in any
respect, as lender, seller/servicer or issuer as described under Section 9.4 or
the suspension, revocation or termination of any other license or approval
required for Borrower to engage in the business of originating, acquiring and,
if applicable, servicing Mortgage Loans; (e) the imposition of any other adverse
regulatory or administrative action or sanction on or against Borrower by any
agency, board, bureau, commission, instrumentality or other administrative or
regulatory body (in each case, whether federal, state or local, domestic or
foreign) that could result in a material adverse change in Borrower’s business,
operations, assets or financial condition as a whole or that could affect the
validity or enforceability of any Pledged Loan or Pledged Security; (f) the
transfer, loss, nonrenewal or termination of any Servicing Contracts to which
Borrower is a party, or which is held for the benefit of Borrower, and the
transfer, loss, nonrenewal or termination of which could reasonably be expected
to result in a material adverse change in Borrower’s business, operations,
assets or financial condition as a whole; (g) any Prohibited Transaction with
respect to any Plan, specifying the nature of the Prohibited Transaction and
what action Borrower or such Guarantor’s proposes to take with respect to it;
and (h) any other action, event or condition of any nature that could lead to or
result in a material adverse change in the business, operations, assets or
financial condition of Borrower.

 

7.8                               Payment of Taxes and Other Obligations

 

Pay, perform and discharge, or cause to be paid, performed and discharged, all
taxes, assessments and governmental charges or levies imposed upon Borrower or
upon its income, receipts or properties before those taxes, assessments and
governmental charges or levies become past due, and all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, could become a Lien or
charge upon any of their respective properties or assets. 

 

25

--------------------------------------------------------------------------------

 

Borrower is not required to pay, however, any taxes, assessments and
governmental charges or levies or claims for labor, materials or supplies for
which Borrower has obtained an adequate bond or insurance or that are being
contested in good faith and by proper proceedings that are being reasonably and
diligently pursued and for which proper reserves have been created.

 

7.9                               Insurance

 

(a)                                 Maintain blanket bond coverage and errors
and omissions insurance with such companies and in such amounts as satisfy
prevailing requirements applicable to a lender, seller/servicer or issuer as
described under Section 9.4, including all applicable Federal Agency insurance
requirements, and liability, fire and other hazard insurance on its properties,
in each case with responsible insurance companies acceptable to Lender, in such
amounts and against such risks as is customarily carried by similar businesses
operating in the same location.  Within thirty (30) days after Notice from
Lender, obtain such additional insurance as Lender may reasonably require, all
at the sole expense of Borrower.  Copies of such policies must be furnished to
Lender without charge upon request of Lender.  Borrower agrees to use its best
efforts to obtain and deliver to Lender a certificate issued by said insurers to
the effect that they will use their best efforts to give Lender at least thirty
(30) days prior written notification prior to cancellation of coverage under any
such policy.

 

(b)                                 Maintain a fidelity bond of an incorporated
surety company in an amount acceptable to Lender and consistent with Borrower’s
past practice securing protection and indemnity to Borrower against loss of any
money or other property entrusted to Borrower or Borrower’s officers, employees
or agents or coming into their control, caused by any dishonest, fraudulent or
criminal act, direct or indirect, of Borrower or of its officers, employees or
agents.  Borrower shall furnish a certificate evidencing such fidelity bond to
Lender, upon request, and shall notify Lender if such fidelity bond coverage is
decreased or exhausted.

 

7.10                        Closing Instructions

 

Indemnify and hold Lender harmless from and against any loss, including
reasonable attorneys’ fees and costs, attributable to the failure of any title
insurance company, agent or attorney to comply with Borrower’s disbursement or
instruction letter relating to any Mortgage Loan.  Lender has the right to
pre-approve Borrower’s choice of title insurance company, agent or attorney,
unless already approved by a relevant Federal Agency, as applicable, and
Borrower’s disbursement or instruction letter to them in any case in which
Borrower intends to obtain a Warehousing Advance against the Mortgage Loan to be
created at settlement or to pledge that Mortgage Loan as Collateral under this
Agreement.

 

7.11                        Subordination of Certain Indebtedness

 

Cause any indebtedness of Borrower for borrowed money to any Affiliate or any
member, shareholder, director or officer of any Affiliate of Borrower, to be
subordinated to the Obligations by the execution and delivery to Lender of a
Subordination of Debt Agreement, on

 

26

--------------------------------------------------------------------------------

 

the form prescribed by Lender, certified by the corporate secretary of Borrower
to be true and complete and in full force and effect.

 

7.12                        Other Loan Obligations

 

Perform all material obligations under the terms of each loan agreement, note,
mortgage, security agreement or debt instrument by which Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing of a
declared default under or the termination, cancellation, reduction or nonrenewal
of any of its other lines of credit or agreements with any other lender. 
Exhibit J is a true and complete list of all such revolving lines of credit or
revolving credit agreements as of the date of this Agreement.

 

7.13                        ERISA

 

Maintain and cause each ERISA Affiliate to maintain each Plan in compliance with
all material applicable requirements of ERISA and of the Internal Revenue Code
and with all applicable rulings and regulations issued under the provisions of
ERISA and of the Internal Revenue Code, and not, and not permit any ERISA
Affiliate to, (a) engage in any transaction in connection with which Borrower or
any ERISA Affiliate would be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code, in either case in an amount exceeding Five Hundred Thousand
Dollars ($500,000.00) or (b) fail to make full payment when due of all amounts
that, under the provisions of any Plan, Borrower or any ERISA Affiliate is
required to pay as contributions to that Plan, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Internal Revenue Code), whether or not waived, with
respect to any Plan in an aggregate amount exceeding Five Hundred Thousand
Dollars ($500,000.00).

 

7.14                        Use of Proceeds of Warehousing Advances

 

Use the proceeds of each Warehousing Advance solely for the purpose of funding
Eligible Loans and against the pledge of those Eligible Loans as Collateral.

 

7.15                        Investor Instructions.

 

Upon any Event of Default prior to purchase of a Mortgage Loan by the Investor,
and upon direction by Lender, Borrower shall immediately direct the Investor to
provide any documents in its possession related to such Mortgage Loan to Lender.

 

7.16                        Sale of Mortgage Loan to Investor.

 

Provide status reports of its efforts to sell each Mortgage Loan to the
applicable Investor on the earlier of: (a) within five (5) days after Borrower
becomes aware of any fact or circumstance that causes Borrower to believe that
the Investor may not purchase the Mortgage Loan within sixty (60) days after the
date of the related Warehousing Advance, in which case such status report shall
include Borrower’s plan for repaying Lender the amount of the Mortgage Loan, and
(b) fifty-five (55) days after the date of the applicable Warehousing Advance
provided Lender has requested the status of such efforts to sell such Mortgage
Loan.  In addition, if the Investor has not purchased, and Borrower has not
repaid, the Mortgage Loan within sixty (60) days after the

 

27

--------------------------------------------------------------------------------

 

date of the related Warehousing Advance, Borrower shall, upon Lender’s request,
immediately cause the Lender to be named as an additional insured under the
property insurance policy covering the property which is collateral for the
Mortgage Loan.

 

8.                                      NEGATIVE COVENANTS

 

As long as any Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

 

8.1                               [Intentionally Deleted]

 

8.2                               Contingent Liabilities

 

Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person except (a) for the Term Loan and obligations arising in
connection therewith, (b) by endorsement of negotiable instruments for deposit
or collection in the ordinary course of business and (c) for obligations arising
in connection with the sale of Mortgage Loans in the ordinary course of a
Borrower’s business.

 

8.3                               Restrictions on Fundamental Changes

 

8.3(a)                          Reorganize, spin-off, consolidate with, merge
with or into, or enter into any analogous reorganization or transaction with any
Person except that WD Capital may merge with and into the Borrower.

 

8.3(b)                          Amend or otherwise modify Borrower’s certificate
of formation or operating agreement in any manner which is materially adverse to
Lender.

 

8.3(c)                           Liquidate, wind up or dissolve (or suffer any
liquidation or dissolution) except that Borrower may liquidate, wind up or
dissolve W&D Balanced Real Estate Fund I GP, LLC.

 

8.3(d)                          Make any material change in the nature or scope
of the business in which Borrower engages as of the date of this Agreement and
cease actively to engage in the business of originating or acquiring Mortgage
Loans, or if applicable, servicing Mortgage Loans.

 

8.3(e)                           Sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one transaction or a series of transactions)
all or any substantial part of Borrower’s business or assets, whether now owned
or acquired after the Closing Date, other than, in the ordinary course of
business and to the extent not otherwise prohibited by this Agreement, sales by
Borrower of (1) Mortgage Loans, (2) Mortgage-backed Securities and (3) Servicing
Contracts.

 

8.3(f)                            Acquire by purchase or in any other
transaction all or substantially all of the business or property, or stock or
other ownership interests of any Person, for consideration in an amount equal to
or greater than Twenty Five Million Dollars ($25,000,000).

 

28

--------------------------------------------------------------------------------

 

8.3(g)                           Permit (i) any Subsidiary of the Borrower
(other than WD Capital) or (ii) the Guarantor (solely with respect to
Section 8.3(a) through 8.3(e)), to do or take any of the foregoing actions.

 

8.4                               Subsidiaries

 

Form or acquire any Subsidiary of Borrower.

 

8.5                               Loss of Eligibility, Licenses or Approvals

 

Take any action, or fail or omit to take any action, that would (a) cause
Borrower to lose all or any part of its status as an eligible lender,
seller/servicer or issuer as described under Sections 9.4, 9.5, 9.6 or 9.7, or
all or any part of any other license or approval required for Borrower to engage
in the business of originating, acquiring and servicing Mortgage Loans or
(b) result in the imposition of any other adverse regulatory or administrative
action or sanction on or against Borrower by any agency board, bureau,
commission, instrumentality or other administrative or regulatory body (in each
case, whether federal, state or local, domestic or foreign) that could result in
a material adverse change in Borrower’s business, operations, assets or
financial condition as a whole or that could affect the validity or
enforceability of any Pledged Loan.

 

8.6                               Accounting Changes

 

Make any significant change in accounting treatment or reporting practices,
except as required by GAAP, or change its Fiscal Year.  If any changes in GAAP
would result in any material deviation in the method of calculating and results
of testing compliance with any financial covenant hereunder, such financial
covenant shall continue to be calculated and tested as if such change in GAAP
had not occurred, unless otherwise specifically agreed in writing by Lender
after full disclosure by Borrower.

 

8.7                               Minimum Adjusted Tangible Net Worth

 

(a) Permit the Parent’s Tangible Net Worth shall at any time to be less than the
sum of: (A) Two Hundred Million Dollars ($200,000,000.00), plus (B) an amount
equal to seventy-five percent (75%) of the Net Proceeds of any Equity Issuances
by the Parent or any Subsidiary occurring after the Closing Date, to be tested
on the last day of each Calendar Quarter, or (ii) permit the Parent or any
applicable Subsidiary to otherwise not be in compliance with applicable net
worth requirements of HUD, Fannie Mae and Freddie Mac.

 

8.8                               [Intentionally Deleted]

 

8.9                               [Intentionally Deleted]

 

8.10                        [Intentionally Deleted]

 

29

--------------------------------------------------------------------------------

 

8.11                        Minimum Cash and Cash Equivalents

 

Permit the Parent’s Liquid Assets, determined on a consolidated basis, at any
time to be less than $15,000,000, or permit the Parent or any applicable
Subsidiary otherwise not to be in compliance with applicable liquidity
requirements of HUD, Fannie Mae and Freddie Mac.

 

8.12                        Servicing Delinquencies

 

Permit the aggregate unpaid principal amount of Fannie Mae DUS Mortgage Loans
within the Parent’s consolidated Servicing Portfolio which are sixty (60) or
more days past due or otherwise in default at any time to exceed three and
one-half percent (3 1/2%) of the aggregate unpaid principal balance of all
Fannie Mae DUS Mortgage Loans within the Parent’s consolidated Servicing
Portfolio at such time, calculated as of the last day of each Calendar Quarter;
provided, however, that solely for purposes of determining compliance with this
Section 8.12 Fannie Mae DUS Mortgage Loans shall be adjusted to exclude: (1) any
No Risk Mortgage Loans under the Fannie Mae DUS Program and (2)  with respect to
any At Risk Mortgage Loans under a modified risk sharing arrangement under the
Fannie Mae DUS Program, any loan balances which are not subject to any loss
sharing or recourse thereunder.

 

8.13                        Dividends and Distributions

 

So long as any Default or Event of Default is then outstanding or would be
outstanding after taking into effect a dividend, redemption or setting aside of
funds, cause or permit, directly or indirectly: declare, pay, authorize or make
any form of dividend (except for stock dividends or stock splits) or return any
capital, in cash or property, to its shareholders, their successors or assigns
or repurchase, redeem or retire any of the capital stock of such Person.

 

8.14                        Transactions with Affiliates

 

Directly or indirectly (a) make any loan, advance, extension of credit or
capital contribution to any of the Borrower’s Affiliates, (b) sell, transfer,
pledge or assign any of its assets to or on behalf of those Affiliates except
for pledges made in connection with the Term Loan, (c) merge or consolidate with
or purchase or acquire assets from those Affiliates, or (d) pay management fees
to or on behalf of those Affiliates, other than (i) payments attributable to
reasonable overhead and administrative charges allocated to the Borrower by the
Affiliates, (ii) reasonable subservicing fees payable to Affiliates for their
servicing of the Servicing Portfolio and (iii) other transactions in the
ordinary course of business (but still in compliance with the terms of this
Section 8.14) and on terms not less favorable to the Borrower than could be
obtained from an unaffiliated third party on an arm’s length basis.

 

8.15                        Recourse Servicing Contracts

 

Except for Servicing Contracts involving Fannie Mae DUS Mortgage Loans, and
conduit originations for which Borrower notifies Lender pursuant hereto, acquire
or enter into Servicing Contracts under which Borrower must repurchase or
indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term of those Mortgage Loans.

 

30

--------------------------------------------------------------------------------

 

8.16                        Total Servicing Portfolio and Fannie Mae Servicing
Portfolio

 

Permit the aggregate unpaid principal amount of (i) all Mortgage Loans
comprising the Parent’s consolidated Servicing Portfolio (exclusive of such
Mortgage Loans which (A) are sixty (60) or more days past due or are otherwise
in default, or (B) have been transferred to Fannie Mae for resolution) to be
less than Twenty Billion Dollars ($20,000,000,000.00) at any time, or (ii) all
Fannie Mae DUS Mortgage Loans comprising the Parent’s consolidated Servicing
Portfolio (exclusive of such Mortgage Loans which (A) are sixty (60) or more
days past due or are otherwise in default, or (B) have been transferred to
Fannie Mae for resolution) to be less than Ten Billion Dollars
($10,000,000,000.00) at any time, calculated as of the last day of each Calendar
Quarter.

 

9.                                      SPECIAL REPRESENTATIONS, WARRANTIES AND
COVENANTS CONCERNING COLLATERAL

 

9.1                               Special Representations and Warranties
Concerning Warehousing Collateral

 

Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that:

 

9.1(a)                          Borrower has selected the Collateral in a manner
so as to not affect adversely Lender’s interests.

 

9.1(b)                          Borrower is the legal and equitable owner and
holder, free and clear of all Liens (other than Liens granted under this
Agreement), of the Pledged Loans and the Pledged Securities.  All Pledged Loans,
Pledged Securities and related Purchase Commitments have been duly authorized
and validly issued to Borrower, and all of the foregoing items of Collateral
comply with all of the requirements of this Agreement, and have been and will
continue to be validly pledged or assigned to Lender, subject to no other Liens.

 

9.1(c)                           Borrower has, and will continue to have, the
full right, power and authority to pledge the Collateral pledged and to be
pledged by it under this Agreement.

 

9.1(d)                          Each Mortgage Loan and each related document
included in the Pledged Loans (1) has been duly executed and delivered by the
parties to that Mortgage Loan and that related document, (2) has been made in
compliance with all applicable laws, rules and regulations (including all laws,
rules and regulations relating to usury), (3) is and will continue to be a
legal, valid and binding obligation, enforceable in accordance with its terms,
without setoff, counterclaim or defense in favor of the mortgagor under the
Mortgage Loan or any other obligor on the Mortgage Note, (4) has not been
modified, amended or any requirements of which waived, except in a writing that
is part of the Collateral Documents, and (5) complies and will continue to
comply with the terms of this Agreement, the related Purchase Commitment, and
the standard practices of the applicable Investor.

 

31

--------------------------------------------------------------------------------

 

9.1(e)                           Each Pledged Loan is directly or indirectly (in
the case of a Freddie Mac Direct Purchase Mortgage Loan) secured by a Mortgage
on real property and improvements located in one of the states of the United
States or the District of Columbia.

 

9.1(f)                            Each Pledged Loan has been closed or will be
closed and funded with the Warehousing Advance made against it or from
Borrower’s unencumbered funds.

 

9.1(g)                           Each Pledged Loan against which a Warehousing
Advance has been or will be made on the basis of a Purchase Commitment, meets
all of the requirements of that Purchase Commitment, and each Pledged Security
against which a Warehousing Advance is outstanding meets all of the requirements
of the related Purchase Commitment.

 

9.1(h)                          Pledged Loans that are intended to be exchanged
for Agency Securities comply or, prior to the issuance of the Agency Securities
will comply, with the requirements of any governmental instrumentality,
department or agency issuing or guaranteeing the Agency Securities.

 

9.1(i)                              Except for FHA Construction Mortgage Loans,
FHA Modified Mortgage Loans or Freddie Mac Moderate Rehab Loans, each Mortgage
Loan has been fully advanced in the face amount of its Mortgage Note.

 

9.1(j)                             Each Pledged Loan is a First Mortgage Loan,
unless permitted to be a Subordinate Mortgage Loan under Exhibit D (in which
case such Pledged Loan may only be a Second Mortgage Loan or a Third Mortgage
Loan).

 

9.1(k)                          Each First Mortgage Loan is secured directly or
indirectly (in the case of a Freddie Mac Direct Purchase Mortgage Loan) by a
First Mortgage on the real property and improvements described in or covered by
that Mortgage.

 

9.1(l)                              Each First Mortgage Loan has or will have a
title insurance policy, in ALTA form or equivalent, from a recognized title
insurance company, insuring the priority of the Lien of the Mortgage and meeting
the usual requirements of Investors purchasing those Mortgage Loans.

 

9.1(m)                      The real property securing each Pledged Loan has
been evaluated or appraised in accordance with Title XI of FIRREA, USPAP, and
the requirements of the applicable Investor.

 

9.1(n)                          Each Subordinate Mortgage Loan (to the extent
Subordinate Mortgage Loans are permitted by Exhibit D) is a Second Mortgage Loan
or a Third Mortgage Loan on the premises described in that Mortgage.  With
respect to each Second Mortgage Loan and Third Mortgage Loan, Borrower shall be
the servicer, and lender with respect to such Second Mortgage Loan and Third
Mortgage Loan shall also be lender with respect to the senior Mortgage Loan on
such Property.

 

9.1(o)                          To the extent required by the related Purchase
Commitment or by Investors generally for similar Mortgage Loans, each
Subordinate Mortgage Loan has or will have a title insurance policy, in ALTA
form or equivalent, from a recognized title insurance

 

32

--------------------------------------------------------------------------------

 

company, insuring the appropriate priority of the Lien of the Mortgage and
meeting the usual requirements of Investors purchasing those Mortgage Loans.

 

9.1(p)                          The Mortgage Note for each Pledged Loan is
(1) payable or endorsed to the order of Borrower (except for the Mortgage Note
for an FHA Modified Mortgage Loan) (2) an “instrument” within the meaning of
Article 9 of the Uniform Commercial Code of all applicable jurisdictions and
(3) is denominated and payable in United States dollars.

 

9.1(q)                          No default exists under any Mortgage Loan when
such Mortgage Loan first is included as a Pledged Loan, and no default has
existed for sixty (60) days or more under any such Mortgage Loan at any time
thereafter.

 

9.1(r)                             No party to a Mortgage Loan or any related
document is in violation of any applicable law, rule or regulation that would
impair the collectability of the Mortgage Loan or the performance by the
mortgagor or any other obligor of his or her obligations under the Mortgage Note
or any related document.

 

9.1(s)                            All fire and casualty policies covering the
real property and improvements encumbered by each Mortgage included in the
Pledged Loans (1) name and will continue to name Borrower and its successors and
assigns as the insured under a standard mortgagee clause, (2) are and will
continue to be in full force and effect and (3) afford and will continue to
afford insurance against fire and such other risks as are usually insured
against in the broad form of extended coverage insurance generally available.

 

9.1(t)                             Pledged Loans secured by real property and
improvements located in a special flood hazard area designated as such by the
Director of the Federal Emergency Management Agency are and will continue to be
covered by special flood insurance under the National Flood Insurance Program.

 

9.1(u)                          The real property and improvements securing each
Pledged Loan are free of damage or waste and are in good repair, and no
improvement located on or being a part of such real property violates any
applicable zoning law or regulation (unless constituting a legal non-conforming
use or improvement).

 

9.1(v)                          No notice of any partial or total condemnation
has been given with respect to the real property and improvements securing any
Pledged Loan.

 

9.1(w)                        None of the Pledged Loans is a graduated payment
Mortgage Loan or has a shared appreciation or other contingent interest feature,
and each Pledged Loan provides for periodic payments of all accrued interest on
the Mortgage Loan on at least a monthly basis.

 

9.1(x)                          Neither Borrower nor any of Borrower’s
Affiliates has any ownership interest, right to acquire any ownership interest
or equivalent economic interest in any property securing a Pledged Loan or the
mortgagor under the Pledged Loan or any other obligor on the Mortgage Note for
such Pledged Loan, except as and to the extent permitted by the applicable
Federal Agency issuing a Purchase Commitment with respect to such Pledged Loan.

 

33

--------------------------------------------------------------------------------

 

9.1(y)                          The original assignments of Mortgage delivered
to Lender for each Pledged Loan are in recordable form and comply with all
applicable laws and regulations governing the filing and recording of such
documents.

 

9.1(z)                           None of the mortgagors, guarantors or other
obligors of any Pledged Loan is a Person named in any Restriction List and to
whom the provision of financial services is prohibited or otherwise restricted
by applicable law.

 

9.2                               Special Affirmative Covenants Concerning
Warehousing Collateral

 

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must, unless Lender consents in writing:

 

9.2(a)                          Warrant and defend the right, title and interest
of Lender in and to the Collateral against the claims and demands of all
Persons.

 

9.2(b)                          Service or cause to be serviced all Pledged
Loans in accordance with the standard requirements of the issuers of Purchase
Commitments covering them and all applicable Federal Agency requirements,
including taking all actions necessary to enforce the obligations of the
obligors under such Mortgage Loans; service or cause to be serviced all Mortgage
Loans backing Pledged Securities in accordance with applicable governmental
requirements and requirements of issuers of Purchase Commitments covering them;
hold all escrow funds collected in respect of Pledged Loans and Mortgage Loans
backing Pledged Securities in trust, without commingling the same with
non-custodial funds, and apply them for the purposes for which those funds were
collected.

 

9.2(c)                           Execute and deliver to Lender, with respect to
the Collateral, those further instruments of sale, pledge, assignment or
transfer, and those powers of attorney, as reasonably required by Lender, and do
and perform all matters and things necessary or reasonably desirable to be done
or observed, for the purpose of effectively creating, maintaining and preserving
the security and benefits intended to be afforded Lender under this Agreement.

 

9.2(d)                          Notify Lender within three (3) Business Days of
any default under, or of the termination of, any Purchase Commitment relating to
any Pledged Loan, Eligible Mortgage Pool or Pledged Security.

 

9.2(e)                           Promptly comply in all respects with the terms
and conditions of all Purchase Commitments, and all extensions, renewals and
modifications or substitutions of or to all Purchase Commitments; deliver or
cause to be delivered to the Investor the Pledged Loans and Pledged Securities
to be sold under each Purchase Commitment not later than the mandatory delivery
date of the Pledged Loans or Pledged Securities under the Purchase Commitment.

 

9.2(f)                            Compare the names of every mortgagor,
guarantor and other obligor of every Mortgage Loan, together with appropriate
identifying information concerning those Persons

 

34

--------------------------------------------------------------------------------

 

obtained by Borrower, against every Restriction List, and make certain that none
of the mortgagors, guarantors or other obligors of any Mortgage Loan is a Person
named in any Restriction List and to whom the provision of financial services is
prohibited or otherwise restricted by applicable law.

 

9.2(g)                           Other than with respect to Fannie Mae DUS
Mortgage Loans or FHA Modified Mortgage Loans, prior to the origination by
Borrower of any Mortgage Loans for sale to a Federal Agency, Borrower shall have
entered into an agreement among Lender, the Investor under the applicable
Purchase Commitment, and Borrower, pursuant to which such Investor agrees to
send all cash proceeds of Mortgage Loans sold by Borrower to such Investor to
the applicable Cash Collateral Account.  With respect to FHA Modified Mortgage
Loans, prior to the funding of any Warehousing Advance to be used by Borrower
for the repurchase of an existing Ginnie Mae Mortgage-backed Security, Borrower
shall have entered into an agreement among Lender, the Investor under the
applicable Purchase Commitment, and Borrower, pursuant to which such Investor
agrees to send all cash proceeds of the new Ginnie Mae Mortgage-backed Security
sold by Borrower to such Investor to the applicable Cash Collateral Account.

 

9.3                               Special Negative Covenants Concerning
Warehousing Collateral

 

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

 

9.3(a)                          Amend, modify, or waive any of the terms and
conditions of, or settle or compromise any claim in respect of, any Pledged
Loans or Pledged Securities.

 

9.3(b)                          Sell, transfer or assign, or grant any option
with respect to, or pledge (except under this Agreement and, with respect to
each Pledged Loan or Pledged Security, the related Purchase Commitment) any of
the Collateral or any interest in any of the Collateral.

 

9.3(c)                           Make any compromise, adjustment or settlement
in respect of any of the Collateral or accept any consideration other than cash
in payment or liquidation of the Collateral.

 

9.4                               Special Representations and Warranties
Concerning Eligibility as Fannie Mae Approved Seller/Servicer of Mortgage Loans

 

Borrower represents and warrants to Lender, as of the date of this Agreement and
as of the date of each Warehousing Advance Request and the making of each
Warehousing Advance, that Borrower is approved, qualified and in good standing
as a Fannie Mae-approved seller/servicer of Mortgage Loans, eligible to
originate, purchase, hold, sell and service Mortgage Loans to be sold to Fannie
Mae under the Fannie Mae DUS Program.

 

9.5                               Special Representation and Warranty Concerning
Fannie Mae DUS Program Reserve Requirements

 

Borrower represents and warrants to Lender that Borrower will have met the
Fannie Mae DUS Program requirements for lender reserves for each Fannie Mae DUS
Mortgage Loan to be

 

35

--------------------------------------------------------------------------------

 

funded by a Warehousing Advance, at such time as required by Fannie Mae under
the Fannie Mae DUS Program.

 

9.6                               Special Representations and Warranties
Concerning FHA Mortgage Loans

 

Borrower represents and warrants to Lender, as of the date of each Advance
Request and the making of each Warehousing Advance, that:

 

9.6(a)                          Each FHA-insured Mortgage Loan included in the
Pledged Loans meets all applicable governmental requirements for such
insurance.  Borrower has complied and will continue to comply with all laws,
rules and regulations with respect to the FHA insurance of each Pledged Loan
designated by Borrower as an FHA-insured Mortgage Loan, and such insurance is
and will continue to be in full force and effect.

 

9.6(b)                          For FHA-insured Pledged Loans that will be used
to back Ginnie Mae Mortgage-backed Securities, Borrower has received from Ginnie
Mae the Confirmation Notice for Request of Additional Commitment Authority and
Confirmation Notice for Request of Pool Numbers, and there remains available
under those agreements a commitment on the part of Ginnie Mae sufficient to
permit the issuance of Ginnie Mae Mortgage-backed Securities in an amount at
least equal to the amount of the Pledged Loans designated by Borrower as the
Mortgage Loans to be used to back those Ginnie Mae Mortgage-backed Securities;
each of those Confirmation Notices is in full force and effect; each of those
Pledged Loans has been assigned by Borrower to one of those Pool Numbers and a
portion of the available Ginnie Mae Commitment has been allocated to this
Agreement by Borrower, in an amount at least equal to those Pledged Loans; and
each of those assignments and allocations has been reflected in the books and
records of Borrower.

 

9.7                               Special Representations and Warranties
Concerning Eligibility as Freddie Mac Program Plus Seller/Servicer of Mortgage
Loans

 

9.7(a)                          Borrower represents and warrants to Lender, as
of the date of this Agreement and as of the date of each Warehousing Advance
Request and the making of each Warehousing Advance, that Borrower is approved,
qualified and in good standing as a Freddie Mac Program Plus seller/servicer of
Mortgage Loans and permitted to originate Freddie Mac Direct Purchase Mortgage
Loans.

 

10.                               DEFAULTS; REMEDIES

 

10.1                        Events of Default

 

The occurrence of any of the following is an event of default (“Event of
Default”):

 

10.1(a)                   Borrower fails to pay the principal of any Warehousing
Advance when due, whether at stated maturity, by acceleration, or otherwise; or
fails to pay interest on any Warehousing Advance when due hereunder; or fails to
pay, within any applicable grace period, any other amount due under this
Agreement or any other Obligation of Borrower to Lender.

 

36

--------------------------------------------------------------------------------

 

10.1(b)                   Borrower fails to perform or comply with any term or
condition applicable to it contained in any Section of Article 7 or Article 8.

 

10.1(c)                    The suspension, revocation or termination of
Borrower’s eligibility, in any respect, as lender, seller/servicer or issuer as
described under Sections 9.4, 9.5, 9.6 or 9.7, or of any other license or
approval required for Borrower to engage in the business of originating,
acquiring and, if applicable, servicing Mortgage Loans; or the imposition of any
other adverse regulatory or administrative action or sanction on or against
Borrower by any agency, board, bureau, commission, instrumentality or other
administrative or regulatory body (in each case, whether federal, state or
local, domestic or foreign), that in each such case could result in a material
adverse change in Borrower’s business, operations, assets or financial condition
as a whole or that could affect the validity or enforceability of any Pledged
Loan.

 

10.1(d)                   Any representation or warranty made or deemed made by
Borrower under this Agreement, in any other Loan Document or in any written
statement or certificate at any time given by Borrower is inaccurate or
incomplete in any material respect on the date as of which it is made or deemed
made.

 

10.1(e)                    Borrower defaults in the performance of or compliance
with any term contained in this Agreement or any other Loan Document other than
those referred to in Sections 10.1(a), 10.1(b), 10.1(c) or 10.1(d) and such
default has not been remedied or waived in writing within thirty (30) days after
the earliest of (1) receipt by Borrower of Notice from Lender of that default,
(2) receipt by Lender of Notice from Borrower of that default or (3) the date
Borrower should have notified Lender of that default under the applicable clause
of Section 7.7.

 

10.1(f)                     Borrower defaults under any other Indebtedness in
excess of Five Hundred Thousand Dollars ($500,000.00) (individually or in the
aggregate) and such default continues beyond any applicable grace period
provided in the relevant agreement with respect thereto.

 

10.1(g)                    An “event of default” (however defined) occurs under
any agreement between Borrower and Lender or its affiliates other than this
Agreement and the other Loan Documents.

 

10.1(h)                   A case (whether voluntary or involuntary) is filed by
or against Borrower under any applicable bankruptcy, insolvency or other similar
federal or state law; or a court of competent jurisdiction appoints a receiver
(interim or permanent), liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Borrower, or over all or a substantial part
of its properties or assets, and, if filed against Borrower, such action is not
dismissed within sixty (60) days; or Borrower (1) consents to the appointment of
or possession by a receiver (interim or permanent), liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Borrower or over
all or a substantial part of its properties or assets, (2) makes an assignment
for the benefit of creditors, or (3) fails, or admits in writing its inability,
to pay its debts as those debts become due.

 

37

--------------------------------------------------------------------------------

 

10.1(i)                       Borrower fails to perform any contractual
obligation to repurchase Mortgage Loans.

 

10.1(j)                      Any money judgment, writ or warrant of attachment
or similar process involving an amount in excess of Five Hundred Thousand
Dollars ($500,000.00) is entered or filed against Borrower or any of its
properties or assets and remains undischarged, unvacated, unbonded or unstayed
for a period of thirty (30) days or five (5) days before the date of any
proposed sale under that money judgment, writ or warrant of attachment or
similar process.

 

10.1(k)                   Any order, judgment or decree decreeing the
dissolution of Borrower is entered and remains undischarged or unstayed for a
period of twenty (20) days.

 

10.1(l)                       Borrower purports to disavow any of its
Obligations or contests the validity or enforceability of any Loan Document.

 

10.1(m)               Lender’s security interest on any portion of the
Collateral becomes unenforceable or otherwise impaired.

 

10.1(n)                   A material adverse change occurs in Borrower’s
financial condition, business, properties or assets, operations or prospects, or
in Borrower’s ability to repay the Obligations.

 

10.1(o)                   Any Lien for any tax, assessment or other governmental
charge (i) is filed or is otherwise enforced against Borrower or any of its
property, including any of the Collateral, other than a Lien for taxes,
assessments or other governmental charges on real property securing or that
previously secured an individual Mortgage Loan that is not a Pledged Loan, or
(ii) obtains priority that is equal to or greater than the priority of Lender’s
security interest in any of the Collateral.

 

10.2                        Remedies

 

10.2(a)                   If an Event of Default described in
Section 10.1(h) occurs with respect to Borrower, the Warehousing Commitment will
automatically terminate and the unpaid principal amount of and accrued interest
on the Warehousing Note and all other Obligations will automatically become due
and payable, without presentment, demand or other Notice or requirements of any
kind, all of which Borrower expressly waives.

 

10.2(b)                   If an Event of Default described in
Section 10.1(a) occurs with respect to Borrower, Lender may terminate the
Warehousing Commitment and declare the Obligations to be immediately due and
payable.

 

10.2(c)                    If any other Event of Default occurs, Lender may by
Notice to Borrower, terminate the Warehousing Commitment and declare the
Obligations to be immediately due and payable.

 

10.2(d)                   If any Event of Default occurs, Lender may also take
any of the following actions:

 

38

--------------------------------------------------------------------------------

 

(i)                           Foreclose upon or otherwise enforce its security
interest in and Lien on the Collateral to secure all payments and performance of
the Obligations in any manner permitted by law or provided for in the Loan
Documents.

 

(ii)                        Notify all obligors under any of the Collateral that
the Collateral has been assigned to Lender (or to another Person designated by
Lender) and that all payments on that Collateral are to be made directly to
Lender (or such other Person); settle, compromise or release, in whole or in
part, any amounts any obligor or Investor owes on any of the Collateral on terms
acceptable to Lender; enforce payment and prosecute any action or proceeding
involving any of the Collateral; and where any Collateral is in default,
foreclose on and enforce any Liens securing that Collateral in any manner
permitted by law and sell any property acquired as a result of those enforcement
actions.

 

(iii)                     Prepare and submit for filing Uniform Commercial Code
amendment statements evidencing the assignment to Lender or its designee of any
Uniform Commercial Code financing statement filed in connection with any item of
Collateral.

 

(iv)                    Act, or contract with a third party to act at Borrower’s
expense, as servicer or subservicer of Collateral requiring servicing and
perform all obligations required under any Collateral, including Servicing
Contracts and Purchase Commitments.

 

(v)                       Require Borrower to assemble and make available to
Lender the Collateral and all related books and records at a place designated by
Lender.

 

(vi)                    Enter onto property where any Collateral or related
books and records are located and take possession of those items with or without
judicial process; and obtain access to Borrower’s respective data processing
equipment, computer hardware and software relating to the Collateral and use all
of the foregoing and the information contained in the foregoing in any manner
Lender deems necessary for the purpose of effectuating its rights under this
Agreement and any other Loan Document.

 

(vii)                 Before the disposition of the Collateral, prepare it for
disposition in any manner and to the extent Lender deems appropriate.

 

(viii)              Exercise all rights and remedies of a secured creditor under
the Commercial Code of Pennsylvania or other applicable law, including selling
or otherwise disposing of all or any portion of the Collateral at one or more
public or private sales, whether or not the Collateral is present at the place
of sale, for cash or credit or future delivery, on terms and conditions and in
the manner as Lender may determine, including sale under any applicable Purchase
Commitment.  Borrower waives any right it may have to prior notice of the sale
of all or any portion of the Collateral to the extent allowed by applicable
law.  If notice is required under applicable law, Lender will give Borrower not
less than ten (10) days’ notice of any public sale or of the date after which
any private sale may be held.  Borrower agrees that ten (10) days’ notice is
reasonable notice.  Lender may, without notice

 

39

--------------------------------------------------------------------------------

 

or publication, adjourn any public or private sale one or more times by
announcement at the time and place fixed for the sale, and the sale may be held
at any time or place announced at the adjournment.  In the case of a sale of all
or any portion of the Collateral on credit or for future delivery, the
Collateral sold on those terms may be retained by Lender until the purchaser
pays the selling price or takes possession of the Collateral.  Lender has no
liability to Borrower if a purchaser fails to pay for or take possession of
Collateral sold on those terms, and in the case of any such failure, Lender may
sell the Collateral again upon notice complying with this Section.

 

(ix)                    Lender may proceed by suit at law or in equity to
collect all amounts due on the Collateral, or to foreclose Lender’s Lien on and
sell all or any portion of the Collateral pursuant to a judgment or decree of a
court of competent jurisdiction.

 

(x)                       Proceed against Borrower on the Warehousing Note.

 

10.2(e)                    Lender will not incur any liability as a result of
the commercially reasonable sale or other disposition of all or any portion of
the Collateral at any public or private sale or other disposition.  Borrower
waives (to the extent permitted by law) any claims it may have against Lender or
any Lender arising by reason of the fact that the price at which the Collateral
may have been sold at a private sale was less than the price that might have
been obtained at a public sale, or was less than the aggregate amount of the
outstanding Warehousing Advances, accrued and unpaid interest on those
Warehousing Advances, and unpaid fees, even if Lender accepts the first offer
received and does not offer the Collateral to more than one offeree.  Borrower
agrees that any sale of Collateral under the terms of a Purchase Commitment, or
any other disposition of Collateral arranged by Borrower, whether before or
after the occurrence of an Event of Default, will be deemed to have been made in
a commercially reasonable manner.

 

10.2(f)                     Borrower acknowledges that the Mortgage Loans are
collateral of a type that are the subject of widely distributed standard price
quotations and that Mortgage-backed Securities are collateral of a type that are
customarily sold on a recognized market.  Borrower waives any right it may have
to prior notice of the sale of Pledged Securities, and agrees that Lender or any
Lender may purchase Pledged Loans and Pledged Securities at a private sale of
such Collateral.

 

10.2(g)                    Borrower specifically waives and releases (to the
extent permitted by law) any equity or right of redemption, stay or appraisal
that Borrower has or may have under any rule of law or statute now existing or
adopted after the date of this Agreement, and any right to require Lender or any
Lender to (1) proceed against any Person, (2) proceed against or exhaust any of
the Collateral or pursue its rights and remedies against the Collateral in any
particular order or (3) pursue any other remedy within its power.  Lender is not
required to take any action to preserve any rights of Borrower against holders
of mortgages having priority to the Lien of any Mortgage or Security Agreement
included in the Collateral or to preserve Borrower’s rights against other prior
parties.

 

40

--------------------------------------------------------------------------------

 

10.2(h)                   Lender may, but is not obligated to, advance any sums
or do any act or thing necessary to uphold or enforce the Lien and priority of,
or the security intended to be afforded by, any Mortgage or Security Agreement
included in the Collateral, including payment of delinquent taxes or assessments
and insurance premiums.  All advances, charges, costs and expenses, including
reasonable attorneys’ fees and disbursements, incurred or paid by Lender in
exercising any right, power or remedy conferred by this Agreement, or in the
enforcement of this Agreement, together with interest on those amounts at the
Default Rate, from the time paid by Lender until repaid by Borrower, are deemed
to be principal outstanding under this Agreement and the Warehousing Note.

 

10.2(i)                       No failure or delay on the part of Lender or any
Lender to exercise any right, power or remedy provided in this Agreement or
under any other Loan Document, at law or in equity, will operate as a waiver of
that right, power or remedy.  No single or partial exercise by Lender or any
Lender of any right, power or remedy provided under this Agreement or any other
Loan Document, at law or in equity, precludes any other or further exercise of
that right, power or remedy by Lender, or Lender’s exercise of any other right,
power or remedy.  Without limiting the foregoing, Borrower waives all defenses
based on the statute of limitations to the extent permitted by law.  The
remedies provided in this Agreement and the other Loan Documents are cumulative
and are not exclusive of any remedies provided at law or in equity.

 

10.2(j)                      Borrower grants Lender a license or other right to
use, without charge, Borrower’s computer programs, other programs, labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in advertising for sale and selling
any of the Collateral and Borrower’s rights under all licenses and all other
agreements related to the foregoing inure to Lender’s benefit until the
Obligations are paid in full.

 

10.3                        Insufficiency of Proceeds

 

If the proceeds realized from any sale, disposition or other enforcement rights
with respect to the Collateral are insufficient to cover the costs and expenses
of such sale, disposition or other enforcement rights with respect to the
Collateral and payment in full of all Obligations, then Borrower shall be liable
for the deficiency.  Nothing herein shall require Lender to look to all or any
portion of the Collateral prior to, or in lieu of, pursuing any other right or
remedy, any or all of which may be pursued in any order and at any time,
including at the same time.

 

10.4                        Lender Appointed Attorney-in-Fact

 

Borrower appoints Lender its attorney-in-fact, with full power of substitution,
for the purpose of carrying out the provisions of this Agreement, the
Warehousing Note and the other Loan Documents and taking any action and
executing any instruments that Lender deems necessary or advisable to accomplish
that purpose.  Borrower’s appointment of Lender as attorney-in-fact is
irrevocable and coupled with an interest.  Without limiting the generality of
the foregoing, Lender may give notice of its security interest in and Lien on
the Collateral to any Person, either in Borrower’s name or in its own name,
endorse all Pledged Loans or Pledged Securities payable

 

41

--------------------------------------------------------------------------------

 

to the order of Borrower, change or cause to be changed the book-entry
registration or name of subscriber or Investor on any Pledged Security, prepare
and submit for filing Uniform Commercial Code amendment statements with respect
to any Uniform Commercial Code financing statements filed in connection with any
item of Collateral or receive, endorse and collect all checks made payable to
the order of Borrower representing payment on account of the principal of or
interest on, or the proceeds of sale of, any of the Pledged Loans or Pledged
Securities and give full discharge for those transactions.  The foregoing
appointment shall be effective immediately with respect to ministerial matters,
and upon the occurrence of an Event of Default with respect to all other
matters.

 

10.5                        Right of Set-Off

 

Borrower hereby grants to Lender a continuing lien, security interest and right
of setoff as security for all liabilities and obligations to Lender, whether now
existing or hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody safekeeping
or control of Lender or any entity under the control of Lender, and their
respective successors and assigns or in transit to any of them, other than
third-party custodial accounts maintained by Borrower at Lender.  Upon
occurrence of an  Event of Default with respect to the payment of any Obligation
or in the performance of any of its duties under the Loan Documents, Lender may,
as determined in such party’s sole discretion, without Notice to or demand on
Borrower (which Notice or demand Borrower expressly waives), set-off,
appropriate or apply any property of Borrower held at any time by Lender, or any
indebtedness at any time owed by Lender to or for the account of a Borrower,
against the Obligations, whether or not those Obligations have matured and
irrespective of whether or not Lender shall have made any demand under this
Agreement or any other Loan Document.  The rights of Lender under this
Section 10.5 are in addition to other rights and remedies (including other
rights of setoff) that Lender may have.  Lender agrees to notify the Borrower
promptly after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application. 
ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS
RIGHT OF SETOFF WITH RESPECT TO SUCH NON-CUSTODIAL DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

10.6                        Application of Funds.

 

After the exercise of remedies provided for in this Section 10 (or after the
Loans have automatically become immediately due and payable as set forth in this
Section 10), any amounts received on account of the Obligations shall be applied
by Lender in the following order:

 

(i)                         First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including fees,
charges and disbursements of counsel to Lender) payable to Lender in its
capacity as such;

 

(ii)                      Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to

 

42

--------------------------------------------------------------------------------

 

Lender(including fees, charges and disbursements of counsel to the respective
Lender) arising under the Loan Documents;

 

(iii)                   Third, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans and the other Obligations
arising under the Loan Documents;

 

(iv)                  Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans; and

 

(v)                     Last, the balance, if any, after all of the Obligations
have been indefeasibly paid in full, to Borrower or as otherwise required by
law.

 

11.                               MISCELLANEOUS

 

11.1                        Modifications, Amendments or Waivers.1.1  Lender,
and Borrower and Guarantor may from time to time enter into written agreements
amending or changing any provision of this Agreement or any other Loan Document
or the rights of Lender or the Borrower or Guarantor, or may grant written
waivers or consents hereunder or thereunder.  Any such agreement, waiver or
consent made with such written consent shall be effective to bind Lender,
Borrower and Guarantor; provided, that no such agreement, waiver or consent may
be made which will:

 

(i)                         Extension of Payment; Reduction of
Principal, Interest or Fees; Modification of Terms of Payment.  Whether or not
any Warehousing Advances are outstanding, extend the Warehousing Maturity Date
or the time for payment of principal or interest of any Loan (excluding the due
date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee
payable to Lender, or reduce the principal amount of or the rate of interest
borne by any Loan or reduce the Commitment Fee or any other fee payable to
Lender, without the written consent of Lender;

 

(ii)                        Conditions Precedent.  Waive any condition set forth
in Section 5.1 and 5.2 and Exhibit B, without the written consent of Lender;

 

(iii)                     Collateral Release.  Release all or substantially all
of the Collateral in any transaction or series of related transactions, without
the written consent of Lender;

 

(iv)                    Guaranty Release.  Release, whether in part or in whole,
the Parent from any obligations arising under or evidenced by the Amended and
Restated Guaranty, without the written consent of Lender;

 

(v)                       Pro Rata Share.  Amend, alter or modify any provision
regarding the pro rata treatment of Lender or requiring Lender to authorize the
taking of any action, in each case without the written consent of Lender;

 

provided that no agreement, waiver or consent which would modify the interests,
rights or obligations of Lender may be made without the written consent of
Lender.

 

43

--------------------------------------------------------------------------------

 

11.2                        No Implied Waivers, Cumulative Remedies.

 

No course of dealing and no delay or failure of Lender in exercising any right,
power, remedy or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any further exercise
thereof or of any other right, power, remedy or privilege.  The rights and
remedies of Lender under this Agreement and any other Loan Documents are
cumulative and not exclusive of any rights or remedies which they would
otherwise have.

 

11.3                        Notices

 

All communications required or permitted to be given or made under this
Agreement (“Notices”) must be in writing and must be sent by one or more of the
following methods, with confirmed receipt of delivery: (i) manual delivery;
(ii) overnight courier; (iii) United States mail (postage prepaid), or
(iv) subject to the limitation below, e-mail transmission in accordance with
electronic delivery protocols provided by Lender to Borrower, addressed as
follows (or at such other address as may be designated by Borrower or Lender in
a Notice to the other):

 

 

 

If to Borrower or Parent:

Walker & Dunlop, LLC
7501 Wisconsin Avenue, Suite 1200E
Bethesda, Maryland 20814
Attention: Stephen Theobald
E-mail: stheobald@walkerdunlop.com

 

 

 

 

In each case with a copy to:

Walker & Dunlop, LLC
7501 Wisconsin Avenue, Suite 1200E
Bethesda, Maryland 20814
Attention: Richard M. Lucas
Email: rlucas@walkerdunlop.com

 

 

 

 

In each case with a copy to:

Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
Attention: Michael J. Pedrick
Email: michael.pedrick@morganlewis.com

 

 

 

 

If to Lender:

PNC Real Estate Finance
Attention: Terri Wyda
Senior Vice President
300 Fifth Avenue
PT-PTWR-15-1
Pittsburgh, PA 15222-2707
E-mail: terri.wyda@pnc.com
Facsimile: 412-762-6500

 

 

 

 

In each case with a copy to:

PNC Bank, National Association

 

44

--------------------------------------------------------------------------------

 

 

 

Attention: Sherry Boston
500 West Jefferson
Mailstop K1-KHDQ-04-6
Louisville, KY 40202
E-mail: REBWH@pnc.com
Facsimile: 502-581-2743

 

 

 

 

 

and

 

 

 

 

 

PNC Bank, National Association
Attention: Jessica Drummond
500 First Avenue, 4th Floor
Mail Stop P7-PFSC-04-V
Pittsburgh, PA 15219
E-mail: REBWH@pnc.com
Facsimile: 412-705-2124

 

 

 

 

In each case with a copy to:

Ballard Spahr LLP
300 East Lombard Street, 18th Floor
Baltimore, Maryland 21202
Attention: Thomas A. Hauser, Esquire
Email: hauser@ballardspahr.com

 

Subject to the provisions of this Section 11.3, all periods of Notice will be
measured from the date of delivery if delivered manually or electronically, from
the first Business Day after the date of sending if sent by overnight courier or
from 4 days after the date of mailing if sent by United States mail except that
Notices to Lender under Article 2, and Section 3.3(e) will be deemed to have
been given only when actually received by Lender.  The Borrower authorizes
Lender to accept the Borrower’s Warehousing Advance Requests, shipping requests,
wire transfer instructions, security delivery instructions and other routine
communications concerning the Warehousing Commitment and the Collateral
transmitted to Lender by electronic transmission (including facsimile or e-mail)
and those documents, when transmitted to Lender by electronic transmission have
the same force and effect as the originals; provided, however, any notice
pursuant to this Agreement or in connection with any of the transactions
contemplated by this Agreement, which is intended to inform Lender of or allege
any claim, cause of action, failure of performance or breach or default by or on
behalf of any party to this Agreement, is not permitted to be made by electronic
transmission.  Any permitted electronic transmission to Lender shall be
delivered only during the normal business operating hours of Lender, and if any
notice or other communication is not sent or posted during normal business hours
of the recipient, said posting date shall be deemed to have commenced as of
11:00 a.m. eastern time on the next business day for the recipient.  Lender
shall not incur any liability to the Borrower for acting upon any electronic
transmission or telephonic notice referred to in this Agreement which Lender
believes in good faith to have been given by a Person authorized to deliver such
notice or for otherwise acting in good faith hereunder. Notwithstanding anything
contained herein, the Borrower shall

 

45

--------------------------------------------------------------------------------

 

deliver paper copies of Notices or other documents to Lender upon request for
such paper copies until a written request to cease delivering paper copies is
given by Lender.

 

11.4                        Reimbursement Of Expenses; Indemnity

 

11.4(a)                   Whether or not the transactions contemplated hereby
shall be consummated, Borrower agrees to pay promptly: (i) all the actual and
reasonable out-of-pocket costs and expenses of Lender for preparation of the
Loan Documents and any consents, amendments, waivers, or other modifications
thereto; (ii) the reasonable fees, expenses, and disbursements of counsel to
Lender in connection with the negotiation, preparation, execution, and
administration of the Loan Documents and any consents, amendments, waivers, or
other modifications thereto and any other documents or matters requested by
Borrower; (iii) all other actual and reasonable out-of-pocket costs and expenses
incurred by Lender in connection with the establishment of the facility, and the
negotiation, preparation, and execution of the Loan Documents and any consents,
amendments, waivers, or other modifications thereto and the transactions
contemplated thereby; and (iv) all reasonable out-of-pocket expenses (including
reasonable attorneys fees and costs, which attorneys may be employees of Lender
and the fees and costs of appraisers, brokers, investment bankers or other
experts retained by Lender) incurred by Lender in connection with (x) the
enforcement of or preservation of rights under any of the Loan Documents against
Borrower or any other Person, or the administration thereof, (y) any refinancing
or restructuring of the credit arrangements provided under this Agreement in the
nature of a “work out” or pursuant to any insolvency or bankruptcy proceedings,
and (z) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to Lender’s relationship with Borrower, except to
the extent arising out of such Person’s gross negligence or willful misconduct
as finally determined by a court of competent jurisdiction.  The covenants of
this Section shall survive payment or satisfaction of payment of amounts owing
with respect to the Warehousing Note.  The amount of all such expenses shall,
until paid, bear interest at the rate applicable to principal hereunder
(including the Default Rate) and be an Obligation secured by any Collateral.

 

11.4(b)                   Borrower shall indemnify and hold harmless Lender and
its respective parents, affiliates, officers, directors, employees, attorneys,
and agents (“Indemnified Party”) from and against any and all claims, actions
and suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of this Agreement or any of the other Loan Documents or the transactions
contemplated hereby (“Damages”) including, without limitation (i) any actual or
proposed use by Borrower of the proceeds of the Loan, (ii) Borrower entering
into or performing this Agreement or any of the other Loan Documents, or
(iii) with respect to Borrower and its properties and assets, the violation of
any applicable law, in each case including, without limitation, the reasonable
fees and disbursements of counsel and allocated costs of internal counsel
incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that no Indemnified Party shall be entitled to
indemnification if a court of competent jurisdiction finally determines (all
appeals having been exhausted or waived) that such Indemnified Party acted with
willful misconduct or gross negligence.  In litigation, or the preparation

 

46

--------------------------------------------------------------------------------

 

therefor, Lender shall be entitled to select their respective own counsel and,
in addition to the foregoing indemnity, Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel.  If, and to the extent that the
obligations of Borrower under this Section 11.4(b) are unenforceable for any
reason, Borrower agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.  The
provisions of this Section 11.4(b) shall survive the repayment of the Loan and
the termination of the obligations of Lender hereunder.

 

11.5                        Financial Information

 

All financial statements and reports furnished to Lender under this Agreement
must be prepared in accordance with GAAP, applied on a basis consistent with
that applied in preparing the most recent Audited Financial Statement of
Borrower provided to Lender.

 

11.6                        Terms Binding Upon Successors; Survival of
Representations

 

The terms and provisions of this Agreement are binding upon and inure to the
benefit of Borrower, Lender, and their respective successors and permitted
assigns.  All of Borrower’s representations, warranties, covenants and
agreements survive the making of any Warehousing Advance, and, except where a
longer period is set forth in this Agreement, remain effective for as long as
the Warehousing Commitment is outstanding or there remain any Obligations to be
paid or performed.

 

11.7                        Pledge to Federal Reserve Banks

 

Lender may at any time pledge or assign all or any portion of its rights under
the Loan Documents (including, without limitation, any portion of its
Warehousing Note) to any of the Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341.  No such pledge or assignment
or enforcement thereof shall release Lender from its obligations under any of
the Loan Documents.

 

11.8                        Governing Law

 

This Agreement and the rights and obligations of the parties hereunder shall be
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania (excluding the laws applicable to conflicts or choice of law).

 

11.9                        Amendments

 

This Agreement may not be amended, modified, or supplemented except by a written
agreement signed by Borrower, Parent and Lender.

 

11.10                 Relationship of the Parties

 

This Agreement provides for the making of Warehousing Advances by Lender, the
requirement of Warehousing Advances by Borrower, the payment of interest on
those Warehousing Advances, and the payment of certain fees by Borrower to
Lender.  The relationship between Lender and Borrower is limited to that of
creditor and secured party on the part of Lender and of

 

47

--------------------------------------------------------------------------------

 

debtor on the part of Borrower.  The provisions of this Agreement and the other
Loan Documents for compliance with financial covenants and the delivery of
financial statements and other operating reports are intended solely for the
benefit of Lender to protect their interests as creditors and secured party. 
Nothing in this Agreement creates or may be construed as permitting or
obligating Lender to act as a financial or business advisor or consultant to
Borrower, as permitting or obligating Lender to control Borrower or to conduct
Borrower’s operations, as creating any fiduciary obligation on the part of
Lender or to Borrower, or as creating any joint venture, partnership, agency or
other similar relationship between Lender and Borrower.  Borrower acknowledges
that it has had the opportunity to obtain the advice of experienced counsel of
its own choice in connection with the negotiation and execution of the Loan
Documents and to obtain the advice of that counsel with respect to all matters
contained in the Loan Documents, including the waivers of jury trial and of
punitive, consequential, special or indirect damages contained in Sections
11.18.  Borrower further acknowledges that it is experienced with respect to
financial and credit matters and has made its own independent decisions to apply
to Lender and Lender for credit and to execute and deliver this Agreement.

 

11.11                 Severability

 

If any provision of this Agreement or any other Loan Document is declared to be
illegal or unenforceable in any respect, that provision is null and void and of
no force and effect to the extent of the illegality or unenforceability, and
does not affect the validity or enforceability of any other provision of the
Agreement or such other Loan Document.

 

11.12                 Consent to Credit References

 

Borrower and Parent each consents to the disclosure of information regarding
Borrower, Parent and their relationship with Lender to Persons making credit
inquiries to Lender.  This consent is revocable by Borrower or Parent at any
time upon Notice to Lender as provided in Section 11.3.

 

11.13                 Counterparts, PDF Copies

 

This Agreement, and any exhibits or other documents to be delivered from time to
time in connection herewith, may be executed in any number of counterparts, each
of which will be deemed an original, but all of which together constitute but
one and the same instrument.  Delivery of an executed counterpart of a signature
page to this Agreement and any other document to be delivered from time to time
in connection herewith (but specifically excluding any Warehousing Note or
Guaranty, which must be executed and physically delivered to Lender), by email
(including by PDF) shall be effective as delivery of a manually executed
counterpart of this Agreement and any other document to be delivered in
connection herewith (other than the Warehousing Note or Guaranty). A party may
reserve the right to require the subsequent delivery of fully executed original
documents within a specified time frame after electronic receipt, but such
reservation shall have no effect on the authenticity, delivery, or
enforceability of any document previously transmitted or exchanged by electronic
means.

 

48

--------------------------------------------------------------------------------

 

11.14                 Headings/Captions

 

The captions or headings in this Agreement and the other Loan Documents are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Agreement or any other Loan Document.

 

11.15                 Entire Agreement

 

This Agreement, the Warehousing Note and the other Loan Documents are intended
by the parties as the final, complete and exclusive statement of the
transactions evidenced by thereby.  All prior or contemporaneous promises,
agreements and understandings, whether oral or written, are deemed to be
superseded by this Agreement, the Warehousing Note and the other Loan Documents,
and no party is relying on any promise, agreement or understanding not set forth
in this Agreement, the Warehousing Note or the other Loan Documents.

 

11.16                 Consent to Jurisdiction

 

BORROWER AND PARENT EACH AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON BORROWER AND PARENT BY MAIL AT THE ADDRESS SET FORTH
HEREIN.  BORROWER AND PARENT EACH HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.

 

11.17                 Waiver of Jury Trial

 

BORROWER, PARENT AND LENDER (BY ACCEPTANCE OF THIS AGREEMENT) MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
LENDER RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN
DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH
ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.

 

11.18                 Waiver of Punitive, Consequential, Special or Indirect
Damages

 

BORROWER AND PARENT EACH WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES FROM LENDER OR ANY OF LENDER’S
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS,

 

49

--------------------------------------------------------------------------------

 

OR AGENTS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY BORROWER OR PARENT AGAINST LENDER
OR ANY OF LENDER’S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, OR
AGENTS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.  THIS WAIVER OF THE RIGHT TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES IS KNOWINGLY AND
VOLUNTARILY GIVEN BY BORROWER AND PARENT, AND IS INTENDED TO ENCOMPASS EACH
INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES WOULD OTHERWISE APPLY.  LENDER IS AUTHORIZED AND
DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE
SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS
WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT
DAMAGES.

 

11.19                 U.S. Patriot Act

 

Lender hereby notifies Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of Borrower
and other information that will allow Lender to identify Borrower in accordance
with the Act.

 

11.20                 Assignments and Participations

 

11.20(a)            Lender may assign all or any part of, or any interest in,
Lender’s rights and benefits hereunder and under the other Loan Documents, as
well as all obligations related to such assigned rights and interest (including
all or a portion of its Commitment and the Loans at the time owing to it),
provided that any such assignment shall be subject to the following conditions:

 

(i)                           Minimum Amounts.

 

(a)                                 In the case of an assignment of the entire
remaining amount of the assigning Lender’s Commitment and/or Loans at the time
owing to it, no minimum amount shall be assigned;

 

(b)                                 In any case not described in (1) above, the
aggregate amount of the Commitment shall not be less than Five Million Dollars
($5,000,000.00).

 

(ii)                        Proportionate Amounts.              Each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Commitment assigned.

 

(iii)                     Consent of
Lender.                                        The consent of Lender (not to be
unreasonably withheld or delayed) and the Borrower (not to be unreasonably
withheld or delayed, and provided that no Event of Default shall have occurred
and be continuing) shall be

 

50

--------------------------------------------------------------------------------

 

required for an assignment of any or part of a Lender’s Commitment, except an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(iv)                    Assignment and Assumption.  The parties to each
assignment shall execute and deliver to Lender an Assignment Agreement in the
form of Exhibit M attached hereto and made a part hereof, together with a
processing fee in the amount of Two Thousand Five Hundred Dollars ($2,500);

 

(v)                       No Assignment to Certain Persons.  No assignment shall
be mate to (A) the Borrower, Guarantor or any Affiliate of Borrower or
Guarantor, or (B) any natural Person.

 

Subject to acceptance thereof by Lender pursuant to clause (iii) of this
Section 11.20, from and after the effective date specified in each Assignment
Agreement, the assignee thereunder shall be a party to this Agreement and, to
the extent of the interest assigned by such Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment Agreement, be released from its obligations under this Agreement (and
in the case of an Assignment Agreement covering all of the assigning Lender’s
rights and obligations under this Agreement, Lender shall cease to be a party
hereto) but shall continue to be entitled to the benefits of Section 11.4 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section shall be treated for
purposes of this Agreement as a sale by Lender of a participation in such rights
and obligations in accordance with Section 11.20(b) below.

 

11.20(b)            Lender may at any time enter into participation agreements
with one or more participating Lender whereby Lender may allocate certain
percentages of the Warehousing Credit Limit to such participant(s), provided
that no participant shall have, except as provided below, any voting or consent
rights on any issue with respect to this Agreement or the other Loan Documents. 
No participant shall be entitled to require Lender to take or refrain from
taking any action under this Agreement or any other Loan Document. 
Notwithstanding the foregoing, any such participant shall be considered to be a
“Lender” for purposes of Sections 3.11, 10.5, and 11.4 with respect to its
participation; provided, however, that no participant shall be entitled to
receive any greater amount than Lender would have been entitled to receive in
respect of the participation effected by Lender had no participation occurred. 
Borrower acknowledges that, for the convenience of all parties, this Agreement
is being entered into with Lender only and that its obligations under this
Agreement are, to the extent expressly provided for in this Section 11.20,
undertaken for the benefit of, and as an inducement to, any such participating
Lender as well as Lender.  Any grant of a participation by Lender shall not
discharge, reduce or otherwise affect Lender’s obligation under this Agreement
to fund Warehousing Advances, which obligation shall remain primary and
absolute.  Such grants of participations shall not affect or diminish the rights
of the granting Lender to reimbursement or other payments which may become due
to Lender under this Agreement and such reimbursements and other payments will
be calculated

 

51

--------------------------------------------------------------------------------

 

as if said Lender had not granted any such participation.  Except as provided
for herein, no participant shall have, by virtue of any participation, any
rights or benefits under this Agreement or claims of any kind against Borrower.

 

11.20(c)             Borrower authorizes Lender to disclose to any participant
or assignee (each, a “Participant”) and any prospective Participant any and all
information in Lender’s possession concerning Borrower which has been delivered
to Lender by Borrower in connection with Lender’s credit evaluation of
Borrower.  Borrower shall assist Lender in effectuating any assignment or
participation pursuant to this Section 11.20 (including during syndication) in
whatever manner Lender reasonably deems necessary, including the participation
in meetings with prospective Participants.

 

11.20(d)            No Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder or under the Loan Documents without the prior
written consent of Lender.

 

11.21                 Confidentiality

 

Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates in
connection with the administration of this Agreement and the preservation,
exercise or enforcement of the rights of Lender under this Agreement (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential and with Lender being responsible for such Affiliates’
and employees’ compliance with this Section); (b) to the extent required or
requested by any regulatory authority purporting to have jurisdiction over such
Person; (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process provided, unless specifically prohibited by
applicable law or court order, Lender shall use reasonable efforts to notify the
Borrower of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of Lender by such
governmental agency) for disclosure of any such Information prior to disclosure
of such Information; (d) to any other party hereto; (e) in connection with the
exercise of any remedies hereunder or under any this Agreement or any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder; (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights and obligations under this Agreement, or
(ii) any actual or prospective party (or its Affiliates) to any swap, derivative
or other transaction under which payments are to be made by reference to the
Borrower and its obligations, this Agreement or payments hereunder; (g) on a
confidential basis to any rating agency in connection with rating the Borrower
or the Guarantor; (h) with the consent of the Borrower and/or Guarantor, as
applicable; or (i) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section, or (y) becomes available to
Lender or any of its respective Affiliates on a nonconfidential basis from a
source other than the Borrower or Guarantor.

 

For purposes of this Section, “Information” means all information received from
the Borrower or the Guarantor relating to the Borrower or Guarantor or any of
their respective businesses, other than any such information that is available
to Lender on a nonconfidential basis prior to

 

52

--------------------------------------------------------------------------------

 

disclosure by the Borrower or the Guarantor; provided that, in the case of
information received from the Borrower or the Guarantor after the date hereof,
such information is clearly identified at the time of delivery as confidential. 
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

11.22                 No Novation.

 

The parties hereto have entered into this Agreement solely to amend and restate
the terms of the Original Credit Facility Agreement.  The parties hereto do not
intend this Agreement nor the transactions contemplated hereby to be, and this
Agreement and the transactions contemplated hereby shall not be construed to be,
a novation of any of the obligations owing by Borrower or any other Loan Party
under or in connection with the Original Credit Facility Agreement or any of the
other Loan Documents.  The parties agree that (a) all of the Loan Documents not
otherwise expressly terminated or amended and restated in connection with the
execution and delivery of this Agreement constitute, and shall be deemed to be,
Loan Documents; (b) all such Loan Documents remain in full force and effect and
(c) any reference to the Original Credit Facility Agreement in any such Loan
Document shall be deemed to be a reference to this Agreement.

 

11.23                 Amendment and Restatement.

 

It is the intention of each of the parties hereto that the Original Credit
Facility Agreement be amended and restated so as to preserve the perfection and
priority of all security interests securing all indebtedness and obligations of
the Loan Parties under the Original Credit Facility Agreement, and that all
indebtedness and obligations of Borrower hereunder and thereunder be secured by
the Liens credited by the Security Documents.  The parties hereto further
acknowledge and agree that this Agreement constitutes an amendment and
restatement of the Original Credit Facility Agreement.

 

12.                               DEFINITIONS

 

12.1                        Defined Terms

 

In addition to terms defined elsewhere in this Agreement, when used in this
Agreement and, unless otherwise defined therein, in any other Loan Document (and
including, unless otherwise defined therein, in any Schedules or Exhibits to
this Agreement and to the other Loan Documents), capitalized terms defined below
or elsewhere in this Agreement have the following meanings:

 

“Adjusted Tangible Net Worth” shall mean Tangible Net Worth, minus Restricted
Cash, plus commercial mortgage servicing rights (to the extent otherwise
included in Intangible Assets).

 

“Advance Rate” means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit D for that type of Eligible Loan.

 

53

--------------------------------------------------------------------------------

 

“Affiliate” means, when used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person that beneficially owns or holds,
directly or indirectly, five percent (5%) or more of any class of voting Equity
Interests of the Person referred to, (c) each Person, five percent (5%) or more
of the voting Equity Interests of which is beneficially owned or held, directly
or indirectly, by the Person referred to, and (d) each of such Person’s
officers, directors and joint venturers.  For these purposes, the term “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the Person in question.

 

“Agency Security” means a Mortgage-backed Security issued or guaranteed by
Fannie Mae, Freddie Mac, or Ginnie Mae.

 

“Agreement” means this Second Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced, and including all Exhibits and Schedules hereto.

 

“Applicable Base Rate” means for any day, a fluctuating per annum rate of
interest equal to the sum of (a) the higher of (i) the Prime Rate and (ii) the
Federal Funds Open Rate plus forty basis points (0.40%), and (b) one and
30/100th percent (1.30%).  The calculation and determination of the Applicable
Base Rate shall be made daily by Lender and such determination shall, absent
manifest error, be final, conclusive and binding upon Borrower and Lender. 
Changes in the Applicable Base Rate shall become effective on the same day as
Lender changes its Prime Rate or a change occurs in the Federal Funds Open Rate,
depending upon which rate is applicable on that day to the determination of the
Base Rate.

 

“Applicable Daily Floating LIBO Rate” means, for any day, a rate per annum equal
to the Daily LIBO Rate for such day, plus one and 30/100th percent (1.30%).

 

“Applicable Rate” means, for any day (a) except as otherwise required from time
to time pursuant to Section 3.11(b) or 3.11(g), the Applicable Daily Floating
LIBO Rate for such day, or (b) if, and only for as long as, required from time
to time pursuant to Section 3.11(b) or 3.11(g), the Applicable Base Rate for
each applicable day.

 

“Approved Custodian” means Fannie Mae, Freddie Mac, FHA and any pool custodian
or other Person that Lender deems acceptable, in its sole discretion, to hold
Mortgage Loans for inclusion in a Mortgage Pool or to hold Mortgage Loans as
agent for an Investor that has issued a Purchase Commitment for those Mortgage
Loans.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“At Risk Mortgage Loans” means Mortgage Loans as to which either Borrower or, as
may be applicable, WD Capital has any loss sharing arrangement or otherwise is
with recourse to Borrower or WD Capital, respectively.

 

“Authorized Representatives” has the meaning set forth in Section 3.12.

 

54

--------------------------------------------------------------------------------

 

“Base Rate Loan” means the Loan (or any particular Warehousing Advance) at any
time while it bears interest at the Applicable Base Rate.

 

“Borrower” has the meaning set forth in the first paragraph of this Agreement.

 

“Business Day” means any (a) day other than Saturday or Sunday, or (b) day of
the year on which offices of Lender are not required or authorized by law to be
closed for business in Pittsburgh, Pennsylvania.  If any day on which a payment
is due is not a Business Day, then the payment shall be due on the next day
following which is a Business Day.  Further, if there is no corresponding day
for a payment in the given calendar month (e.g., there is no “February 30th”),
the payment shall be due on the last Business Day of the calendar month.

 

“Calendar Quarter” means the 3 month period beginning on each January 1,
April 1, July 1 or October 1.

 

“Cash Collateral Account” means Lender access only deposit accounts maintained
at Lender and designated for receipt of the proceeds of the sale or other
disposition of Collateral (account no. 130760016803 for Borrower).

 

“Cash Equivalents” means (i) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof) having maturities of not more than twelve months
from the date of acquisition (“Government Obligations”), (ii) U.S. dollar
denominated (or foreign currency fully hedged) time deposits, certificates of
deposit, Eurodollar time deposits and Eurodollar certificates of deposit of
(y) any domestic commercial bank of recognized standing having capital and
surplus in excess of $250,000,000 or (z) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s
is at least P-1 or the equivalent thereof (any such bank being an “Approved
Bank”), in each case with maturities of not more than 364 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate notes rated A-1
(or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody’s and maturing within twelve months of the date of
acquisition (other than paper or notes issued by the Parent or an Affiliate of
the Parent), (iv) repurchase agreements with a bank or trust company (including
a Lender) or a recognized securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America, (v) obligations of any state of the United States or
any political subdivision thereof for the payment of the principal and
redemption price of and interest on which there shall have been irrevocably
deposited Government Obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, and (vi) U.S. dollar
denominated time and demand deposit accounts or money market accounts with those
domestic banks meeting the requirements of item (y) or (z) of clause (ii) above
and any other domestic commercial banks insured by the FDIC with an aggregate
balance not to exceed in the aggregate at any time at any such bank such amount
as may be fully insured by the FDIC from time to time.

 

“C&D System” means Fannie Mae’s Commitments and Deliveries system.

 

55

--------------------------------------------------------------------------------

 

“Closing Date” means, subject to Borrower’s satisfaction of the conditions set
forth in Article 5, the date as of which this Agreement is executed as first
above written.

 

“Collateral” has the meaning set forth in Section 4.1.

 

“Collateral Documents” means, with respect to each Mortgage Loan, (a) the
documents set forth in the applicable Exhibit B attached hereto and (b) all
other documents including, if applicable, any Security Agreement, executed in
connection with or relating to the Mortgage Loan.

 

“Commitment” shall mean as to any Lender, its Warehousing Commitment, and
“Commitments” shall mean the aggregate of the Warehousing Commitments of all of
Lender.

 

“Compliance Certificate” means a certificate executed on behalf of Borrower by
its chief financial officer or other management official having principal
financial accounting responsibilities, substantially in the form of Exhibit I.

 

“Daily LIBO Rate” for any day shall mean, the rate per annum determined by
Lender by dividing (a) the Published Rate by (b) a number equal to 1.00 minus
the LIBOR Reserve Percentage, provided, however, if the Daily LIBO Rate
determined as provided above would be less than zero, then such rate shall be
deemed to be zero.

 

“Damages” has the meaning set forth in Section 12.4(b).

 

“Default” means the occurrence of any event or existence of any condition that,
but for the giving of Notice, the lapse of time or both would constitute an
Event of Default.

 

“Default Rate” means, on any day, a rate per annum equal to the Applicable Rate
on such day plus four percent (4%).

 

“Eligible Loan” means a Mortgage Loan that satisfies the conditions and
requirements set forth in Exhibit D and meets the following criteria: (a) such
Mortgage Loan has not been previously sold or pledged to obtain financing
(whether or not such financing constitutes Indebtedness) under another
warehousing financing arrangement or gestation agreement, (b) Lender believes
that such Mortgage Loan is not based on untrue, incomplete, inaccurate or
fraudulent information and is not otherwise subject to fraud, and (c) the
Warehousing Advance on such Mortgage Loan will not exceed the Advance Rate
applicable to that type of Eligible Loan at the time it is pledged.

 

“Eligible Mortgage Pool” means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.

 

“Equity Interest” means, with respect to any Person, any share of capital stock
of (or other ownership or profit interests in) such Person, any warrant, option
or other right for the purchase or other acquisition from such Person of any
share of capital stock of (or other ownership or profit interests in) such
Person whether or not certificated, any security convertible into or
exchangeable for any share of capital stock of (or other ownership or profit
interests in) such

 

56

--------------------------------------------------------------------------------

 

Person or warrant, right or option for the purchase or other acquisition from
such Person of such shares (or such other interests), and any other ownership,
profit or other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of the
issuing Person (including, without limitation, partnership, membership or trust
interests therein) whether voting or nonvoting, and whether or not such share,
warrant, option, right or other interest is authorized or otherwise existing on
any date of determination.

 

“Equity Issuance” means any issuance or sale by a Person of any Equity Interest
in such Person (and includes any capital contribution from any Person other than
the Borrower or a Subsidiary).

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and all
rules and regulations promulgated under that statute, as amended, and any
successor statute, rules, and regulations.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is a member of a group of which a Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.

 

“Escrow Deposits” shall mean escrow deposits maintained by Borrower at Lender,
which shall be interest bearing or non-interest bearing as designated by
Borrower.

 

“Event of Default” means any of the conditions or events set forth in
Section 10.1.

 

“Excess Payment” has the meaning set forth in Section 3.11(f).

 

“Fair Market Value” means, at any time for an Eligible Loan or a related Pledged
Security (if the Eligible Loan is to be used to back a Pledged Security) as of
any date of determination, the market price for such Eligible Loan or Pledged
Security, determined by Lender based on market data for similar Mortgage Loans
or Pledged Securities and such other criteria as Lender deems appropriate in its
sole discretion.

 

“Fannie Mae” means Fannie Mae, a corporation created under the laws of the
United States, and any successor corporation or other entity.

 

“Fannie Mae DUS Mortgage Loan” has the meaning specified in Exhibit D.

 

“Fannie Mae DUS Program” means Fannie Mae’s program for the purchase of Mortgage
Loans originated under Fannie Mae’s Delegated Underwriting and Servicing Guide,
as amended from time to time.

 

“Fannie Mae Loan Loss Reserves” means reserves established by Borrower to absorb
estimated future losses related to Fannie Mae DUS Mortgage Loans.

 

“Federal Agency” means FHA, Freddie Mac, Fannie Mae, Ginnie Mae or any other
instrumentality or agency of the United States of America or corporation
organized under the laws of the United States of America which insures,
guaranties or purchases Mortgage Loans.

 

57

--------------------------------------------------------------------------------

 

“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a
year of three hundred sixty (360) days and actual days elapsed) which is the
daily federal funds open rate as quoted by ICAP North America, Inc.  (or any
successor) as set forth on the Bloomberg Screen BTMM for that day opposite the
caption “OPEN” (or on such other substitute Bloomberg Screen that displays such
rate), or as set forth on such other recognized electronic source used for the
purpose of displaying such rate as selected by Lender (an “Alternate Federal
Funds Source”) (or if such rate for such day does not appear on the Bloomberg
Screen BTMM (or any substitute screen) or on any Alternate Federal Funds Source,
or if there shall at any time, for any reason, no longer exist a Bloomberg
Screen BTMM (or any substitute screen) or any Alternate Federal Funds Source, a
comparable replacement rate determined by Lender at such time (which
determination shall be conclusive absent manifest error); provided, that if such
day is not a Business Day, the Federal Funds Open Rate for such day shall be the
Federal Funds Open Rate on the immediately preceding Business Day.

 

“FHA” means the Federal Housing Administration and any successor agency or other
entity.

 

“FHA Construction Mortgage Loan” means an FHA fully-insured Mortgage Loan for
the construction or substantial rehabilitation of a multifamily property.

 

“FHA Modified Mortgage Loan” means an existing FHA Mortgage Loan, the terms of
which have been modified to reduce the applicable interest rate and the monthly
payments of principal and interest, pursuant to terms reviewed and approved by
HUD.

 

“FHA Mortgage Loan” means an FHA Construction Mortgage Loan or an FHA Permanent
Mortgage Loan.

 

“FHA Permanent Mortgage Loan” means an FHA fully-insured Mortgage Loan secured
by a Mortgage on a Multi-Family Property.

 

“FICA” means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.

 

“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.

 

“First Mortgage” means a Mortgage that constitutes a first Lien on the real
property and improvements described in or covered by that Mortgage.

 

“First Mortgage Loan” means a Mortgage Loan secured by a First Mortgage.

 

“Fiscal Year” means any period of twelve consecutive months ending on
December 31 of any calendar year.

 

“Freddie Mac” means Freddie Mac, or other Federal Agency to which the powers and
duties of Freddie Mac have been transferred.

 

“Freddie Mac Direct Purchase Mortgage Loan” has the meaning set forth on
Exhibit D.

 

58

--------------------------------------------------------------------------------

 

“Freddie Mac Moderate Rehab Loan” means a Freddie Mac Moderate Rehab Loan.

 

“Freddie Mac Program Plus” means Freddie Mac’s Program Plus Seller/Servicer
program.

 

“Freddie Mac TELP” means Freddie Mac’s Direct Purchase of Tax Exempt Loan
program.

 

“Fund” means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extension of credit in the ordinary course of its activities.

 

“Funding Loan” means, in connection with a Freddie Mac Direct Purchase Mortgage
Loan, the loan made by Borrower to Governmental Lender pursuant to the terms of
a Funding Loan Agreement.

 

“Funding Loan Agreement” means, in connection with a Freddie Mac Direct Purchase
Mortgage Loan, a funding loan agreement among Borrower, Governmental Lender and
a fiscal agent.

 

“GAAP” means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

 

“Ginnie Mae” means the Government National Mortgage Association or other Federal
Agency as to which the powers and duties of the Governmental National Mortgage
Association have been transferred.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Governmental Lender” means the governmental entity, such as a state, county or
city housing authority, who under a Freddie Mac Direct Purchase Mortgage Loan is
the borrower of the Funding Loan and Lender of the Project Loan.

 

“Governmental Note” means, in connection with a Freddie Mac Direct Purchase
Mortgage Loan, the note from Governmental Lender evidencing the Funding Loan.

 

“Guarantor” means Walker & Dunlop, Inc., a Maryland corporation.

 

“Hedging Arrangements” means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, collars,
derivatives, interest rate cap agreements and forward sale agreements) entered
into to protect that Person against changes in interest rates or the market
value of assets.

 

59

--------------------------------------------------------------------------------

 

“HUD” means the Department of Housing and Urban Development, and any successor
agency or other entity.

 

“Indebtedness” means, as to any Person, all obligations, contingent and
otherwise, that in accordance with GAAP should be classified upon the
consolidated balance sheet of such Person and such Person’s Subsidiaries as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all obligations for
borrowed money or other extensions of credit whether secured or unsecured,
absolute or contingent, including, without limitation, unmatured reimbursement
obligations with respect to letters of credit or guarantees issued for the
account of or on behalf of such Person and its Subsidiaries and all obligations
representing the deferred purchase price of property; (b) all obligations
evidenced by bonds, notes, debentures or other similar instruments; (c) all
liabilities secured by any mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (d) all
guarantees, endorsements and other contingent obligations whether direct or
indirect, in respect of indebtedness of others or otherwise, including any
obligations under Hedging Arrangements and otherwise with respect to puts,
swaps, and other similar undertakings, any obligation to supply funds to or in
any manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit;
and (e) that portion of all obligations arising under capital leases that is
required to be capitalized on the consolidated balance sheet of such Person and
its Subsidiaries; but excluding, in all events obligations arising under
operating leases and accounts payable arising in the ordinary course of
business.

 

“Indemnified Party” has the meaning set forth in Section 11.2(b).

 

“Intangible Assets” shall mean all assets which would be classified as
intangible assets under GAAP consistently applied, including, without
limitation, goodwill (whether representing the excess of cost over book value of
assets acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises and deferred charges (including, without limitation, unamortized debt
discount and expense, organization costs, and research and development costs).

 

“Interest Expense” for any period shall mean, the sum of (a) the amount of
interest accrued on, or with respect to, Indebtedness for such period,
including, without limitation, imputed interest on capital leases and imputed or
accreted interest in respect of deep discount or zero coupon obligations, plus
(b) the net amount payable under all Hedging Arrangements in respect of such
period (or minus the net amount receivable under all Hedging Arrangements in
respect of such period) plus (c) commitment fees payable during such period.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.

 

60

--------------------------------------------------------------------------------

 

“Investment Company Act” means the Investment Company Act of 1940 and all
rules and regulations promulgated under that statute, as amended, and any
successor statute, rules and regulations.

 

“Investor” means (a) a Federal Agency, or (b) a financially responsible private
institution that Lender deems acceptable from time to time, in its sole
discretion, to issue Purchase Commitments with respect to a particular category
of Eligible Loans.

 

“Late Charge” has the meaning set forth in Section 3.10.

 

“Lender” has the meaning set forth in the first paragraph of this Agreement.

 

“LIBOR Loan” means the Loan (or any particular Warehousing Advance) at any time
it is being maintained at a rate of interest based upon the Daily LIBO Rate (the
Applicable Rate for which shall be the Applicable Daily Floating LIBO Rate).

 

“LIBOR Reserve Percentage” shall mean the maximum effective percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including,
without limitation, supplemental, marginal and emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

 

“Lien” means (a) any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever and (b) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.

 

“Liquid Assets” means the following unrestricted and unencumbered assets owned
by a Person (and, if applicable, that Person’s Subsidiaries, on a consolidated
basis) as of any date of determination: (a) cash, (b) Cash Equivalents, and
(c) Borrower’s and, as may be applicable, WD Capital’s self-funded Mortgage
Loans which are covered by binding purchase commitments from Fannie Mae, Freddie
Mac, or another investor approved by Lender in its sole discretion, and are not
subject to any Liens or Negative Pledge in favor of any Person other than Lender
or pursuant to the Term Loan.

 

“Loan” shall have the meaning set forth in Section 1.5.

 

“Loan Documents” means this Agreement, the Warehousing Note, and each other
document, instrument or agreement executed by any Loan Party in connection with
any of those documents, instruments and agreements, or establishing or
evidencing an Obligation, including, without limitation, pursuant to a Hedging
Arrangement with Lender or an Affiliate as the counterparty, to the extent
specifically hedging Borrower’s interest bearing obligations under this
Agreement, each as originally executed or as any of the same may be amended,
restated, renewed or replaced.

 

“Loan Party” means any of Borrower and/or Parent.

 

61

--------------------------------------------------------------------------------

 

“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.

 

“Maximum Warehousing Credit Limit” means Eight Hundred Million Dollars
($800,000,000).

 

“Measurement Period” means, at any date of determination, the most recently
completed four Fiscal Quarters of the applicable Person.  For purposes of
calculating any financial ratio or financial covenant for a Measurement Period
(a) other than with respect to the last Fiscal Quarter of any Fiscal Year, the
financial statements delivered to Lender pursuant to Section 7.2(b) shall be
used with respect to each respective Fiscal Quarter covered thereby, provided
that, when a Measurement Period includes a Fiscal Quarter that is covered by the
n most recently delivered audited financial statements required to be delivered
to Lender pursuant to Section 7.2(a), then the financial statements relating to
such prior covered Fiscal Quarters shall be adjusted pursuant to any adjustments
made in such audited financial statements, and (b) for the Fourth Quarter, the
audited financial statements for the Fiscal Year then ended shall be used.

 

“Miscellaneous Fees and Charges” means, without duplication, the miscellaneous
fees set forth on Exhibit L and/or in the custodial agreement and related
documents and fee schedule previously, or to be, entered into by Lender (or an
affiliate) and Borrower on or before the Closing Date, and all miscellaneous
disbursements, charges and expenses incurred by or on behalf of Lender for the
handling and administration of Warehousing Advances and Collateral, including
custodial fees, costs for Uniform Commercial Code, tax lien and judgment
searches conducted by Lender, filing fees, charges for wire transfers (outgoing
and incoming) and check processing charges, charges for security delivery fees,
charges for overnight delivery of Collateral to Investors, recording fees,
service fees and overdraft charges.  Upon not less than 3 Business Days’ prior
Notice to Borrower, Lender may modify such Miscellaneous Fees and Charges (and
Exhibit L, as may be appropriate) to conform to current Lender practices.

 

“Mortgage” means a mortgage or deed of trust on real property that, except in
the case of an FHA Construction Mortgage Loan, is improved and substantially
completed.

 

“Mortgage-backed Securities” means securities that are secured or otherwise
backed by Mortgage Loans.

 

“Mortgage Loan” means any loan evidenced by a Mortgage Note and secured,
directly or indirectly (in the case of a Freddie Mac Direct Purchase Mortgage
Loan), by a Mortgage and, if applicable, a Security Agreement.

 

“Mortgage Loan Amount” means the outstanding principal amount of Mortgage Loan.

 

“Mortgage Note” means a promissory note secured, directly  or indirectly (in the
case of a Freddie Mac Direct Purchase Mortgage Loan) by one or more Mortgages
and, if applicable, one or more Security Agreements.

 

“Mortgage Pool” means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.

 

62

--------------------------------------------------------------------------------

 

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate of a
Borrower has any obligation with respect to its employees.

 

“Negative Pledge” means an agreement by a Person with any other Person not to
create, incur, assume, or suffer to exist any Lien upon any of its property,
assets, or revenues, however characterized for UCC or other purposes.

 

“Net Income” means, for any period, the consolidated net income (or loss) of the
Parent, before deduction of income taxes, determined on a consolidated basis in
accordance with GAAP.

 

“Net Proceeds” means with respect to an Equity Issuance by a Person, the
aggregate amount of all cash or the fair market value of all other property
received by such Person in respect of such Equity Issuance net of reasonable and
customary legal fees, accountants fees, underwriting discounts and commissions
and other customary fees and expenses actually incurred by such Person in
connection with such Equity Issuance.

 

“Net Worth” shall mean, as of the date of any determination thereof, the net
worth of Borrower determined in accordance with GAAP.

 

“No Risk Mortgage Loans” means Mortgage Loans as to which Borrower or, as may be
applicable, WD Capital has no loss sharing arrangement or otherwise are without
recourse to Borrower or WD Capital, respectively.

 

“Notices” has the meaning set forth in Section 11.1.

 

“Obligations” means all indebtedness, obligations and liabilities of Borrower to
Lender (whether now existing or arising after the date of this Agreement,
voluntary or involuntary, joint or several, direct or indirect, absolute or
contingent, liquidated or unliquidated, or decreased or extinguished and later
increased and however created or incurred), including, without limitation,
Borrower’s obligations and liabilities to Lender (a) under the Loan Documents,
(b) for disbursements made by Lender for Borrower’s account, (c) for overdrafts
(which, if permitted, shall be at Lender’s sole discretion), (d) for automated
clearinghouse exposure, (e) under Hedging Arrangements with Lender or an
Affiliate as the counterparty, to the extent specifically hedging Borrower’s
interest bearing obligations under this Agreement and of which Hedging
Arrangement Lender had been provided Notice (and all details thereof) prior to
its establishment, and (f) under any cash management or related agreements.

 

“Operating Accounts” means the demand deposit accounts maintained at Lender in
Borrower’s name and designated for funding that portion of each Eligible Loan
not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security (as of the date hereof, account no. XX with respect to Borrower).

 

“Other Fannie Mae Mortgage Loan” has the meaning set forth in Exhibit D.

 

“Other Taxes” has the meaning set forth in Section 3.11(d).

 

63

--------------------------------------------------------------------------------

 

“Outstanding Amount” means on any date, the aggregate outstanding principal
amount of the Loan after giving effect to any prepayments or repayments of the
Loan occurring on such date.

 

“Overdraft Advance” has the meaning set forth in Section 3.7.

 

“Parent” means Walker & Dunlop, Inc., a Maryland corporation.

 

“Participant” has the meaning specified in Section 11.21(c).

 

“Person” means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of those governments.

 

“Plan” means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of a Borrower or any ERISA Affiliate.

 

“Pledged Hedging Accounts” has the meaning set forth in Section 4.1(g).

 

“Pledged Hedging Arrangements” has the meaning set forth in Section 4.1(g).

 

“Pledged Loans” has the meaning set forth in Section 4.1(b).

 

“Pledged Securities” has the meaning set forth in Section 4.1(c).

 

“Prime Rate” means on any day, the rate of interest per annum then most recently
established by Lender as its “prime rate,” it being understood and agreed that
such rate is set by Lender as a general reference rate of interest, taking into
account such factors as Lender may deem appropriate, that it is not necessarily
the lowest or best rate actually charged to any customer or a favored rate, that
it may not correspond with future increases or decreases in interest rates
charged by other lender or market rates in general, and that Lender may make
various business or other loans at rates of interest having no relationship to
such rate.  If Lender ceases to exist or to establish or publish a prime rate
from which the Prime Rate is then determined, the applicable variable rate from
which the Prime Rate is determined thereafter shall be instead the prime rate
reported in The Wall Street Journal (or the average prime rate if a high and a
low prime rate are therein reported), and the Prime Rate shall change without
notice with each change in such prime rate as of the date such change is
reported.

 

“Prohibited Transaction” has the meanings set forth for such term in
Section 4975 of the Internal Revenue Code and Section 406 of ERISA.

 

“Property” means a multifamily property securing a Mortgage Loan.

 

“Published Rate” shall mean the rate of interest published each Business Day in
The Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one-month period (or, if no such rate is
published therein for any reason, then the Published Rate

 

64

--------------------------------------------------------------------------------

 

shall be the eurodollar rate for a one-month period as published in another
publication determined by Lender).

 

“Purchase Commitment” means an unconditional, fixed price, irrevocable written
commitment, in form and substance satisfactory to Lender, issued in favor of
Borrower by an Investor under which that Investor commits to purchase Mortgage
Loans or Mortgage-backed Securities.

 

“Reference Rate” means, as applicable for determining the Applicable Rate for
any day, the Daily LIBO Rate or the Applicable Base Rate for such day.

 

“Release Amount” has the meaning set forth in Section 4.3(f).

 

“Restricted Cash” shall mean segregated funds of Borrower held for the benefit
of third parties and noted as “restricted cash and cash equivalents” in
Borrower’s financial statements.

 

“Restriction List” and “Restriction Lists” means each and every list of Persons
who are Specially Designated Nationals and Blocked Persons or otherwise are
Persons to whom the Government of the United States prohibits or otherwise
restricts the provision of financial services.  For the purposes of this
Agreement, Restriction Lists include the list of Specially Designated Nationals
and Blocked Persons established pursuant to Executive Order 13224 (September 23,
2001) and maintained by the U.S. Department of the Treasury’s Office of Foreign
Assets Control or any successor agency or other entity, U.S. Department of the
Treasury, current as of the day the Restriction List is used for purposes of
comparison in accordance with the requirements of this Agreement.

 

“Second Mortgage” means a subordinate Mortgage that is in second lien position,
subordinate to a first lien position Mortgage.

 

“Second Mortgage Loan” means a Mortgage Loan secured by a Second Mortgage.

 

“Security Agreement” means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.

 

“Servicing Contract” means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.

 

“Servicing Portfolio” means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.

 

“Servicing Report” has the meaning set forth in Section 7.3(a).

 

“Specially Designated Nationals or Blocked Persons” means Persons which are
owned or controlled by, or acting on behalf of, the government of target
countries or are associated with international narcotics trafficking or
terrorism.

 

“Standard Warehousing Credit Limit” means Five Hundred Million Dollars
($500,000,000).

 

65

--------------------------------------------------------------------------------

 

“Subordinate Mortgage” means a Second Mortgage or a Third Mortgage.

 

“Subordinate Mortgage Loan” means a Mortgage Loan secured by a Subordinate
Mortgage for which all prior Mortgage Loans on that Property are under a
Servicing Contract with Borrower, and for which all prior Mortgage Loans on that
Property have been sold to, or are subject to a Purchase Commitment issued by,
Fannie Mae.

 

“Subsidiary” means any corporation, partnership, association or other business
entity in which more than fifty percent (50%) of the shares of stock or other
ownership interests having voting power for the election of directors, managers,
trustees or other Persons performing similar functions is at the time owned or
controlled by any Person either directly or indirectly through one or more
Subsidiaries of that Person.

 

“Tangible Net Worth” means, at any time of determination, the excess, at such
time, of the Parent’s and its Subsidiaries’, on a consolidated basis, total
assets, minus the sum of (i) total liabilities, and (ii) the book value of all
intangible assets, including, without limitation, good will, trademarks, trade
names, service marks, brand names, copyrights, patents and unamortized debt
discount and expense, organizational expenses and the excess of the equity in
any Subsidiary over the cost of the investment in such Subsidiary, all of the
foregoing determined in accordance with GAAP applied in a manner consistent with
the most recent audited financial statements delivered to Lender under this
Agreement.  For the purposes of this definition, mortgage servicing rights shall
not be considered intangible assets.

 

“Taxes” has the meaning set forth in Section 3.11(c).

 

“Term Loan” means collectively (a) the term loan in the original principal
amount of up to One Hundred Seventy Five Million Dollars ($175,000,000.00) made
by the lenders pursuant to the Term Loan Agreement, (b) any additional
incremental term loans in an aggregate principal amount of up to Sixty Million
Dollars ($60,000,000.00) expressly provided for in the Term Loan Agreement and
(c) all existing or future payment and other obligations owing by Parent.
Walker & Dunlop Multifamily, Inc., Borrower, WD Capital or any other Affiliate
of Parent party to the Term Loan Agreement under (i) any secured hedge
agreements or comparable arrangements and (ii) any secured cash management
agreements or comparable arrangements, in each case, as contemplated by the Term
Loan Agreement.

 

“Term Loan Agreement” means that certain Credit Agreement, dated on or about
December 20, 2013 by and among the Parent as borrower, and Wells Fargo Bank,
National Association, as administrative agent, and the lenders from time to time
party thereto, as from time to time amended, modified, supplemented, restated or
extended.

 

“Third Mortgage” means a subordinate Mortgage that is in third lien position,
subordinate to a first lien position Mortgage and a Second Mortgage.

 

“Third Mortgage Loan” means a Mortgage Loan secured by a Third Mortgage.

 

“Total Credit Exposure” means, as to any Lender at any time, the unused
Commitments at such time.

 

66

--------------------------------------------------------------------------------

 

“Trust Receipt” means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.

 

“USPAP” means the Appraisal Foundation’s Uniform Standards of Professional
Appraisal Practice, as in effect from time to time.

 

“Warehousing Advance” means a disbursement by Lender under Section 1.1.

 

“Warehousing Advance Due Date” means with respect to a Warehousing Advance, the
date that is sixty (60) days after the date of such Warehousing Advance or if in
advance of a calendar year end, a Federal Agency has instructed Borrower to
delay or defer delivery of a Pledged Loan or Pledged Security to a date that is
more than sixty (60) days after such Warehousing Advance, to a later date but
not to exceed February 28th of the following calendar year, and Borrower has
notified Lender of its intent to comply with such delayed or deferred delivery
or provided Lender with a status report regarding such delivery pursuant to
Section 7.16, then such later date specified by Borrower in such notice or
report to Lender.

 

“Warehousing Advance Request” has the meaning set forth in Section 2.1.

 

“Warehousing Commitment” means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.

 

“Warehousing Credit Limit” means either the Standard Warehousing Credit Limit or
the Maximum Warehousing Credit Limit, as applicable.

 

“Warehousing Maturity Date” has the meaning set forth in Section 1.2.

 

“Warehousing Note” has the meaning set forth in Section 1.3.

 

“WD Capital” means Walker & Dunlop Capital, LLC (formerly known as CWCapital,
LLC), a Massachusetts limited liability company.

 

12.2                        Other Definitional Provisions; Terms of Construction

 

12.2(a)                   Accounting terms not otherwise defined in this
Agreement have the meanings given to those terms under GAAP.

 

12.2(b)                   Defined terms may be used in the singular or the
plural, as the context requires.

 

12.2(c)                    All references to time of day mean the then
applicable time in Pittsburgh, Pennsylvania, unless otherwise expressly
provided.

 

12.2(d)                   References to Sections, Exhibits, Schedules and like
references are to Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise expressly provided.

 

12.2(e)                    The words “include,” “includes” and “including” are
deemed to be followed by the phrase “without limitation.”

 

67

--------------------------------------------------------------------------------

 

12.2(f)                     Unless the context in which it is used otherwise
clearly requires, the word “or” has the inclusive meaning represented by the
phrase “and/or.”

 

12.2(g)                    All incorporations by reference of provisions from
other agreements are incorporated as if such provisions were fully set forth
into this Agreement, and include all necessary definitions and related
provisions from those other agreements.  All provisions from other agreements
incorporated into this Agreement by reference survive any termination of those
other agreements until the Obligations of Borrower under this Agreement and the
Warehousing Notes are irrevocably paid in full and the Warehousing Commitment is
terminated.

 

12.2(h)                   All references to the Uniform Commercial Code are
deemed to be references to the Uniform Commercial Code in effect on the date of
this Agreement in the applicable jurisdiction.

 

12.2(i)                       Unless the context in which it is used otherwise
clearly requires, all references to days, weeks and months mean calendar days,
weeks and months.

 

[Signature pages follow]

 

68

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

 

WALKER & DUNLOP, LLC, as Borrower

 

 

 

 

By:

/s/ Stephen P. Theobald

 

Name:

Stephen P. Theobald

 

Title:

Executive Vice President, Chief Financial Officer & Treasurer

 

 

 

 

 

 

 

WALKER & DUNLOP, INC., as Parent and Guarantor

 

 

 

 

By:

/s/ Stephen P. Theobald

 

Name:

Stephen P. Theobald

 

Title:

Executive Vice President, Chief Financial Officer & Treasurer

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION,

 

as Lender

 

 

 

 

 

 

 

By:

/s/ Terri Wyda

 

Name:

Terri Wyda

 

Title:

Senior Vice President

 

S-1

--------------------------------------------------------------------------------

 

Exhibit A

 

FIFTH AMENDED AND RESTATED WAREHOUSING NOTE

 

$800,000,000.00

 

September 11, 2017

 

WALKER & DUNLOP, LLC, a Delaware limited liability company (“Borrower”)
previously delivered to PNC Bank, National Association (together with its
successors and assigns, “Lender”), that certain Fourth Amended and Restated
Warehousing Note, dated December 24, 2015, in the principal amount of One
Billion Three Hundred Million Dollars ($1,300,000,000.00) (the “Original
Note”).  The Original Note evidences a line of credit and is the Warehousing
Note referred to in that certain Amended and Restated Warehousing Credit and
Security Agreement, dated as of June 25, 2013, by and between the Borrower and
Lender, as amended from time to time (the “Agreement”).  Borrower, Lender and
Walker & Dunlop, Inc., a Maryland corporation are contemporaneously herewith
amending and restating the Original Credit Facility Agreement, pursuant to that
certain Second Amended and Restated Warehousing Credit and Security Agreement,
of even date herewith (the “Credit Facility Agreement”), and in connection
therewith, Borrower and Lender desire to amend and restate the Original Note in
its entirety as follows:

 

FOR VALUE RECEIVED, Borrower promises to pay to the order of PNC Bank, National
Association, a national banking association (together with its successors and
assigns, “Lender”) in accordance with the provisions of the Agreement (as
hereafter defined), at the offices of Lender located at One PNC Plaza,
Pennsylvania 15222, or at such other place as Lender may designate from time to
time (i) the principal sum of Eight Hundred Million Dollars ($800,000,000.00) or
so much thereof as may be outstanding under the Agreement, (ii) interest on that
amount from the date of each Warehousing Advance from Lender until repaid in
full, and (iii) all other fees, charges and other Obligations due to Lender
under the Agreement, at the rates, at the times, and in the manner set forth in
the Agreement.  All payments under this Note and the Agreement must be made in
lawful money of the United States and in immediately available funds.

 

This Fifth Amended and Restated Warehousing Note (this “Note”) replaces the
Original Note in its entirety, and evidences a line of credit and is the
Warehousing Note referred to in the Agreement.  Reference is made to the
Agreement (which is incorporated by reference as fully and with the same effect
as if set forth at length in this Note) for a description of the Collateral and
a statement of (a) the covenants and agreements made by Borrower, (b) the rights
and remedies granted to Lender, and (c) the other matters governed by the
Agreement.  Capitalized terms not otherwise defined in this Note have the
meanings set forth in the Agreement.

 

In addition to principal, interest, fees and other charges payable by Borrower
under this Note and the Agreement, Borrower must pay in accordance with the
terms of Section 12.4(a) of the Agreement, all out-of-pocket costs and expenses
of Lender, including reasonable fees, expenses and disbursements of counsel, in
connection with the enforcement and collection of this Note.

 

Exhibit A-1

--------------------------------------------------------------------------------

 

Borrower waives demand, notice, protest and presentment in connection with
collection of amounts outstanding under this Note.

 

This Note is governed by the laws of the Commonwealth of Pennsylvania, without
reference to its principles of conflicts of laws, as an instrument under seal.

 

[Signature Page Follows]

 

Exhibit A-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Borrower has caused this Fifth Amended and Restated Note to
be duly executed as of the date set forth above as a sealed instrument.

 

 

WALKER & DUNLOP, LLC,

 

a Delaware limited liability company

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Exhibit A-3

--------------------------------------------------------------------------------

 

Exhibit B-1 — FNMA/DUS

 

PROCEDURES AND DOCUMENTATION FOR WAREHOUSING FANNIE MAE DUS AND OTHER FANNIE MAE
MORTGAGE LOANS

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) must
observe the following procedures and documentation requirements in all
respects.  All documents must be satisfactory to PNC Bank, N.A., a national
banking association (“Lender”) in its sole discretion.  Capitalized terms used
in this Exhibit without further definition have the meanings set forth in the
Second Amended and Restated Warehousing Credit and Security Agreement between
Borrower and Lender (as amended, restated, renewed or replaced, the
“Agreement”).  Fannie Mae form numbers used in this Exhibit are for convenience
only and Borrower must use the equivalent forms required at the time of delivery
of a Pledged Loan or a Pledged Security.

 

I.                                        At least Three (3) Business Days prior
to the Warehousing Advance Date, Lender must receive a letter signed by
Borrower, providing the following information on the Pledged Loan:

 

1.                                      Mortgagor’s name.

 

2.                                      Project Name.

 

3.                                      Borrower’s case/loan number.

 

4.                                      Location of project.

 

5.                                      Mortgage Note Amount.

 

6.                                      Expected Warehousing Advance date.

 

7.                                      Name, street address, e-mail address,
telephone number and telecopier number of title company and settlement attorney
and contact person.  Must identify who will be responsible for custody of
closing documents and delivery of required items to Lender

 

8.                                      In the event Borrower self-funded the
Mortgage Loan with unencumbered funds (herein a “Pre-funded Mortgage Loan”),
then in alternative to clause I, 7 above, the original closing date of the
Pre-funded Mortgage Loan.

 

II.                                   At least One (1) Business Day prior to the
Warehousing Advance Date, Borrower will send via overnight carrier or
electronically to Lender, for receipt before 11:00 a.m. (Pittsburgh,
Pennsylvania time) the following Business Day, the following:

 

1.                                      An original, facsimile or other
electronic copy (with the original to be forwarded via overnight delivery) of
the Warehousing Advance Request subject to changes to be communicated in writing
by Borrower to Lender before 11:00 a.m. (Pittsburgh, Pennsylvania time) on the
day of the Warehousing Advance.

 

1

--------------------------------------------------------------------------------

 

2.                                      A letter from Borrower providing the
following additional information on the Pledge Loan:

 

(a)                                 Note Rate.

 

(b)                                 Name of Investor.

 

(c)                                  Discount (if any).

 

3.                                      A sources and uses statement prepared by
Borrower must be delivered on the date of the Warehousing Advance, prior to
funding (but a copy of the closing settlement statement shall be delivered to
Lender following the Warehousing Advance).

 

4.                                      A completed and executed Loan
Disbursement Authorization in the form attached hereto as Exhibit O.

 

5.                                      For Other Fannie Mae Mortgage Loans, a
copy of the Fannie Mae Multifamily Commitment printed from the C&D System.

 

6.                                      For Fannie Mae DUS Mortgage Loans, a
copy of the confirmed Fannie Mae Multifamily MBS/DUS Commitment printed from the
C&D System.

 

7.                                      If a Mortgage-backed Security is to be
issued, a copy of the Purchase Commitment or trade confirmations for the Pledged
Security.

 

8.                                      Original, facsimile or other electronic
copy of Lender’s escrow instructions letter to the settlement attorney,
countersigned by an authorized representative of the settlement attorney
involved with the transaction, in a form substantially similar to that attached
hereto as (a) Exhibit N-1 if the settlement attorney will also be acting as the
bailee with respect to the Mortgage Note or (b) Exhibit N-2 if the settlement
attorney will not be acting as the bailee with respect to the Mortgage Note (the
“Escrow Letter”).  The foregoing conditions shall not be applicable in the event
the Warehousing Advance is to be used to reimburse Borrower for any Pre-funded
Mortgage Loan.

 

No Warehousing Advance will be made by Lender prior to Lender’s receipt of all
the documents required under Section II above.  Lender has a reasonable time
(one (1) Business Day under ordinary circumstances) to examine Borrower’s
Warehousing Advance Request and the related documents to be delivered by
Borrower before funding the requested Warehousing Advance, and may reject any
Mortgage Loan that does not meet the requirements of this Exhibit, the Agreement
or of the related Purchase Commitment.

 

In accordance with the Escrow Letter, if applicable, disbursement will be
authorized only after the settlement attorney or closing counsel takes
possession, on behalf of Lender, of the signed Mortgage Note, endorsed by
Borrower in blank and without recourse, and the title company is prepared to
issue its title insurance policy.  Immediately after disbursement, the
settlement attorney, the closing attorney or title company (herein, the “Closing
Agent”) must send the original of the Mortgage Note to Lender for receipt by
Lender on the following Business Day.  In the event the Pledged Loan is not
closed and the related Mortgage submitted for recording by

 

2

--------------------------------------------------------------------------------

 

4:30 p.m. (Pittsburgh, Pennsylvania time) on the date of the Warehousing
Advance, the Closing Agent must return the Warehousing Advance immediately to
the account specified in Lender’s escrow instructions unless otherwise approved
by Lender prior to such time; provided, however, that the Warehousing Advance
may remain with the title company for up to two (2) Business Days with prior
written notice to Lender and, if longer than two (2) Business Days, with prior
written approval of Lender.

 

The foregoing arrangements, which permit Lender to fund the Warehousing Advance
after the Mortgage Note has been delivered to a third person on behalf of, and
as agent and bailee for, Lender, and before the Mortgage Note is received by
Lender, are for the convenience of Borrower.  Borrower retains all risk of loss
or nondelivery of the Mortgage Note, and Lender does not have any liability or
responsibility for those risks.

 

For any Warehousing Advance relating to a Pre-funded Mortgage Loan, the parties
shall not engage a Closing Agent or utilize an Escrow Letter.

 

III.                              On The Warehousing Advance Date, Lender must
receive the following:

 

1.                                      For any Warehousing Advance other than
one relating to a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 A copy of the Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor.

 

(c)                                  A copy of the unrecorded, undated and in
blank, assignment of the Mortgage in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured Borrower and/or the
Investor, and their successors and assigns, as their interests may appear;

 

(ii)                                  Shows effective date and time which is as
of the date and time of disbursement of the Warehousing Advance from escrow; and

 

(iii)                               Sets forth an insured amount which is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  A bailee agreement executed by Borrower’s
closing counsel, in the form of (a) Exhibit N-1 if the closing counsel is also
acting as the settlement attorney with respect to the Warehousing Advance funds
or (b) Exhibit N-3 if the closing counsel is not acting as the settlement
attorney with respect to the Warehousing Advance funds, whereby in either case
the closing counsel agrees that it will hold the original Mortgage Note as
bailee for and on behalf of Lender and deliver it to

 

3

--------------------------------------------------------------------------------

 

Lender by recognized overnight delivery within One (1) Business Day after the
Warehousing Advance Date.

 

(f)                                   Written notice by electronic mail or
facsimile authorizing Lender to disburse funds to the Escrow Agent as set forth
in the Escrow Letter, to be held in trust by the Escrow Agent pending the
Borrower’s authorization to release such funds.

 

(g)                                  Documents that are reasonably requested by
Lender.

 

2.                                      For any Warehousing Advance relating to
a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower..

 

(b)                                 The original Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor.

 

(c)                                  The original unrecorded, undated and in
blank, assignment of the Mortgage in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured Borrower and/or the
Investor, and their successors and assigns, as their interests may appear;

 

(ii)                                  Shows the recording date of the Mortgage
as being prior to the date of the Warehousing Advance; and

 

(iii)                               Sets forth an insured amount which is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  Documents that are reasonably requested by
Lender

 

IV.                               As soon as possible following the Warehousing
Advance Date, and no later than One (1) Business Day after the Warehousing
Advance Date, Lender must receive the following:

 

1.                                      If not previously delivered, the
original Mortgage Note, endorsed by Borrower in blank and without recourse, sent
by overnight delivery.

 

2.                                      A copy of the closing statement.

 

V.                                    As soon as possible following the
Warehousing Advance Date, and no later than Two (2) Business Days prior to the
date the Investor or the Approved Custodian must receive the Pledged Loan,
Lender must receive the following:

 

1.                                      If not previously delivered, the
original unrecorded, undated and in blank, assignment of the Mortgage, in the
form attached hereto as Exhibit P, sent by overnight delivery.

 

4

--------------------------------------------------------------------------------

 

2.                                      The remainder of the documents required
for shipping to the Investor as specified by the Investor or in the applicable
Seller/Servicer Guide or to an Approved Custodian for the Investor, including
the original release documents required by the Investor.

 

3.                                      Documents that are reasonably requested
by Lender.

 

VI.                               As soon as possible following the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Loan, Lender must
receive the following:

 

1.                                      Signed shipping instructions for the
delivery of the Pledged Loan, including the following:

 

(a)                                 Name and address of the Investor or the
Approved Custodian to which the Collateral Documents are to be shipped, the
desired shipping date and the preferred method of delivery (which must be a
shipper ordinarily utilized by Lender) with Borrower’s billing account
information for such shipper (or alternatively a pre-labeled envelope);

 

(b)                                 Date by which the Investor or the Approved
Custodian must receive the Pledged Loan; and

 

(c)                                  Instructions for endorsement of the
Mortgage Note.

 

2.                                      For Other Fannie Mae Mortgage Loans and
Fannie Mae DUS Mortgage Loans, the following additional documents must be
received to the extent applicable:

 

(a)                                 Executed bailee letter with the appropriate
applicable Schedule (in form approved by Fannie Mae and Lender).

 

3.                                      For cash payments, the signed original
Wire Transfer Request (Fannie Mae Form 4639) or Fannie Mae Wiring Instructions
printed from the C&D System, specifying the applicable Cash Collateral Account
as the receiving account for loan purchase proceeds.  Wire instructions are as
follows:

 

For Borrower:

 

PNC Bank, N.A.

ABA #: 043-000-096

ACCOUNT #:

REF:  Walker & Dunlop LLC

ATTN:  Jessica Drummond @ (412) 762-5622

 

4.                                      If a Mortgage-backed Security is to be
issued by Fannie Mae, a copy of the Fannie Mae Wiring Instructions printed from
the C&D System, instructing Fannie Mae to issue the Mortgage-backed Security in
Borrower’s name and to deliver the Pledged Security to Lender’s custody account
at Lender using the following instructions:

 

5

--------------------------------------------------------------------------------

 

For Borrower:

 

Federal Reserve Bank of Cleveland

ABA #:  043000096

For:  PNC BANKPITT/Trust/

REF:  Walker & Dunlop LLC

 

5.                                      If a Mortgage-backed Security is to be
issued, completed and signed Security Delivery Instructions, in the form
attached as Schedule I to this Exhibit.

 

Unless otherwise agreed in writing with Borrower, Lender exclusively will
deliver the Mortgage Note and other original Collateral Documents required by
this Exhibit evidencing the Pledged Loan, together with a bailee letter, to an
Investor or an Approved Custodian.  Upon instruction by Borrower, Lender will
complete the endorsement of the Mortgage Note.  If no Mortgage-backed Security
is to be issued, Lender will deliver the Mortgage Note and the other documents
required for shipping to the Investor as specified by the Investor or in the
applicable Seller/Servicer Guide with a bailee letter to the Investor that
issued the Purchase Commitment for the Pledged Loan or to an Approved Custodian
for the Investor.  If a Mortgage-backed Security is to be issued, Lender will
deliver the Mortgage Note and the other documents required for shipping.

 

6

--------------------------------------------------------------------------------

 

Schedule I To Exhibit B-1 — FNMA/DUS

 

PNC BANK, N.A.

SECURITY DELIVERY INSTRUCTIONS

 

INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF
PICK-UP/DELIVERY

 

BOOK-ENTRY DATE:

 

SETTLEMENT DATE:

 

 

 

ISSUER:

 

SECURITY: $

 

(For Borrower):[         ]

 

(For Borrower):[            ]

 

 

CUSIP NO.

 

Pool No.               MI No.

 

Coupon Rate:

 

Issue Date (M/D/Y):                   Maturity Date (M/D/Y):

 

 

POOL TYPE:

 

DELIVERY INSTRUCTIONS:                        DVP AMOUNT $

 

 

AUTHORIZED SIGNATURE:

 

 

 

 

 

 

TITLE:

 

 

 

--------------------------------------------------------------------------------

 

Exhibit B-2-A — FHA/GNMA

 

PROCEDURES AND DOCUMENTATION FOR WAREHOUSING

FHA PERMANENT MORTGAGE LOANS, FHA CONSTRUCTION MORTGAGE

LOANS, AND RELATED GINNIE MAE MORTGAGE-BACKED SECURITIES

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) must
observe the following procedures and documentation requirements in all
respects.  All documents must be satisfactory to PNC Bank, N.A., a national
banking association (“Lender”) in its sole discretion.  Capitalized terms used
in this Exhibit without further definition have the meanings set forth in the
Second Amended and Restated Warehousing Credit and Security Agreement between
Borrower and Lender (as amended, restated, renewed or replaced, the
“Agreement”).  HUD form numbers used in this Exhibit are for convenience only
and Borrower must use the equivalent forms required at the time of delivery of a
Pledged Mortgage or a Pledged Security.

 

I.                                        At least Three (3) Business Days prior
to the Warehousing Advance Date, Lender must receive a letter signed by Borrower
providing the following information on the Pledged Mortgage or Security:

 

1.                                      Mortgagor’s name.

 

2.                                      Project Name.

 

3.                                      Borrower’s case/loan number.

 

4.                                      HUD’s case/loan number.

 

5.                                      Location of project.

 

6.                                      Mortgage Note Amount.

 

7.                                      Expected Warehousing Advance date.

 

8.                                      Name and address of Borrower’s counsel
to be present at closing.

 

9.                                      Name, street address, e-mail address,
telephone number and telecopier number of title company and settlement attorney
and contact person.  Must identify who will be responsible for custody of
closing documents and delivery of required items to Lender.

 

10.                               In the event Borrower self-funded the Mortgage
Loan with unencumbered funds (herein a “Pre-funded Mortgage Loan”), then in the
alternative to clause I, 9 above, the original closing date of the Pre-funded
Mortgage Loan.

 

Upon receipt of Borrower’s letter required under this Section I, in form and
substance satisfactory to Lender, Lender will issue its closing instructions
letter to Borrower’s counsel and its escrow instructions letter to the
settlement attorney involved with the transaction.

 

Exhibit B-2-A-1

--------------------------------------------------------------------------------

 

 

II.                                   At least One (1) Business Day prior to the
Warehousing Advance Date, Borrower will send to Lender, for receipt before 11:00
a.m. (Pittsburgh, Pennsylvania time) the following Business Day, the following:

 

1.                                      An original or facsimile (with original
to be forwarded via overnight delivery) of the Warehousing Advance Request
subject to changes to be communicated in writing by Borrower to Lender before
11:00 a.m. (Pittsburgh, Pennsylvania time) on the day of the Warehousing
Advance.

 

2.                                      A letter from Borrower providing the
following additional information on the Pledge Loan:

 

(a)                                 Note Rate.

 

(b)                                 Name of Investor.

 

(c)                                  Discount (if any).

 

3.                                      A sources and uses statement prepared by
Borrower must be delivered on the date of the Warehousing Advance, prior to
funding (but a copy of the closing settlement statement shall be delivered to
Lender following the Warehousing Advance).

 

4.                                      A completed and executed Loan
Disbursement Authorization in the form attached hereto as Exhibit O.

 

5.                                      Copy of current FHA Firm Commitment to
insure.

 

6.                                      If no mortgage-backed Security is to be
issued, a copy of the Purchase Commitment (which must conform to the
requirements of the Agreement) for the Pledged Mortgage (or the original thereof
if requested by Lender).

 

7.                                      If a mortgage-backed Security is to be
issued, a copy of the Purchase Commitment or trade confirmation for the
mortgage-backed Security (or the original thereof if requested by Lender).

 

8.                                      Original or facsimile of Lender’s
closing instructions letter to Borrower’s attorney, countersigned by the
attorney involved with transaction. The foregoing conditions shall not be
applicable in the event the Warehousing Advance is to be used to reimburse
Borrower for any Pre-funded Mortgage Loan.

 

9.                                      Original or facsimile of Lender’s escrow
instructions letter to the settlement attorney, countersigned by an authorized
representative of the settlement attorney involved with the transaction, in a
form substantially similar to that attached hereto as (a) Exhibit N-1 if the
settlement attorney will also be acting as the bailee with respect to the
Mortgage Note or (b) Exhibit N-2 if the settlement attorney will not be acting
as the bailee with respect to the Mortgage Note (the “Escrow Letter”). The
foregoing conditions shall not be applicable in the event the Warehousing
Advance is to be used to reimburse Borrower for any Pre-funded Mortgage Loan.

 

Exhibit B-2-A-2

--------------------------------------------------------------------------------

 

10.                               For FHA Construction Mortgage Loans, a copy of
the Application for Insurance of Advance of Mortgage Proceeds (HUD Form 92403)
to be submitted to HUD.

 

No Warehousing Advance will be made by Lender prior to Lender’s receipt of all
documents required under Section II above.  Lender has a reasonable time (one
(1) Business Day under ordinary circumstances) to examine Borrower’s Warehousing
Advance Request and the related documents to be delivered by Borrower before
funding the requested Warehousing Advance, and may reject any Eligible Mortgage
that does not meet the requirements of this Exhibit, the Agreement or of the
related Purchase Commitment.

 

In accordance with the Escrow Letter, if applicable, in the event the Pledged
Loan is not closed and the related Mortgage submitted for recording by 4:30
p.m. (Pittsburgh, Pennsylvania time) on the date of the Warehousing Advance, the
settlement attorney or closing counsel must return the Warehousing Advance
immediately to the account specified in Lender’s escrow instructions, unless
otherwise approved by Lender prior to such time; provided, however, that the
Warehousing Advance may remain with the title company for up to two (2) Business
Days with prior written notice to Lender, and if longer than two (2) Business
Days, with prior written approval of Lender.

 

The foregoing arrangements, which permit Lender to fund the Warehousing Advance
after the Mortgage Note has been delivered to a third person on behalf of, and
as agent and bailee for, Lender, and before the Mortgage Note is received by
Lender, are for the convenience of Borrower.  Borrower retains all risk of loss
or non-delivery of the Mortgage Note, and Lender does not have any liability or
responsibility for those risks.

 

For any Warehousing Advance relating to a Pre-funded Mortgage Loan, the parties
shall not engage a settlement attorney or closing counsel, or utilize an Escrow
Letter.

 

III.                              On the Warehousing Advance Date, Lender must
receive the following:

 

1.                                      For any Warehousing Advance other than
one relating to a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 A copy of the Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor and endorsed for
insurance by HUD.

 

(c)                                  A copy of the unrecorded, undated and in
blank, assignment of the Mortgage, in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured the “Mortgagee and/or
the Secretary of the Department of Housing and Urban Development, and their
successors and assigns, as their interests may appear.”

 

Exhibit B-2-A-3

--------------------------------------------------------------------------------

 

(ii)                                  Shows an effective date and time that is
(i) as of the date and time of disbursement of the Warehousing Advance from
escrow, or (ii) in the event the Warehousing Advance relates to a Pre-funded
Mortgage Loan, as of the date and time of the recording of the Mortgage.

 

(iii)                               Sets forth an insured amount that is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  To the extent applicable, a bailee
agreement executed by Borrower’s closing counsel, in the form of (a) Exhibit N-1
if the closing counsel is also acting as the settlement attorney with respect to
the Warehousing Advance funds or (b) Exhibit N-3 if the closing counsel is not
acting as the settlement attorney with respect to the Warehousing Advance funds,
whereby in either case the closing counsel agrees that it will hold the original
Mortgage Note as bailee for and on behalf of Lender and deliver it to Lender by
recognized overnight delivery within One (1) Business Day after the Warehousing
Advance Date.

 

(f)                                   To the extent applicable, written notice
by electronic mail or facsimile authorizing Lender to disburse funds to the
Escrow Agent as set forth in the Escrow Letter, to be held in trust by the
Escrow Agent pending the Borrower’s authorization to release such funds.

 

(g)                                  Documents that are reasonably requested by
Lender.

 

(h)                                 For FHA Construction Mortgage Loans, a copy
of the Application for Insurance of Advance of Mortgage Proceeds (HUD
Form 92403), signed by an authorized representative of HUD.

 

2.                                      For any Warehousing Advance relating to
a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 The original Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor and endorsed for
insurance by HUD.

 

(c)                                  The original unrecorded, undated and in
blank, assignment of the Mortgage, in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which

 

(i)                                     Names as insured Borrower and/or the
Investor, and their successors and assigns, as their interest may appear;

 

(ii)                                  Shows the recording date of the Mortgage
as being prior to the date of the Warehousing Advance; and

 

Exhibit B-2-A-4

--------------------------------------------------------------------------------

 

(iii)                               Sets forth an insured amount which is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  Documents that are reasonably requested by
Lender.

 

(f)                                   For FHA Construction Mortgage Loans, a
copy of the Application for Insurance of Advance of Mortgage Proceeds (HUD
Form 92403), signed by an authorized representative of HUD.

 

IV.                               FOR SUBSEQUENT WAREHOUSING ADVANCES FOR FHA
CONSTRUCTION MORTGAGE LOAN:  AT LEAST ONE (1) BUSINESS DAY PRIOR TO THE DATE OF
THE WAREHOUSING ADVANCE LENDER MUST RECEIVE THE FOLLOWING:

 

1.                                      Original or facsimile of the signed
Warehousing Advance Request.

 

2.                                      An Application for Insurance of Advance
of Mortgage Proceeds (HUD Form 92403), signed by an authorized representative of
HUD.

 

V.                                    FOR SUBSEQUENT WAREHOUSING ADVANCES FOR
FHA CONSTRUCTION MORTGAGE LOAN: ON THE DAY OF THE WAREHOUSING ADVANCE LENDER
MUST RECEIVE THE FOLLOWING

 

1.                                      Lender must receive evidence of the
insurance coverage in an amount equal to the amount of the Warehousing Advance
with a copy of the title insurance policy endorsement immediately following
closing.

 

VI.                               As soon as possible after the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Mortgage, Lender
must receive:

 

1.                                      The original unrecorded, undated and in
blank, assignment of the Mortgage, in the form attached hereto as Exhibit P,
sent by overnight delivery.

 

2.                                      The remainder of the documents required
for shipping to the Investor as specified by the Investor or in the applicable
Seller/Servicer Guide or to an Approved Custodian for the Investor, including
the original release documents required by the Investor.

 

3.                                      Documents that are reasonably requested
by Lender, including a copy of the closing settlement statement.

 

VII.                          As soon as possible after the Warehousing Advance
Date, and no later than Two (2) Business Days prior to the date the Investor or
the Approved Custodian must receive the Pledged Mortgage, Lender must receive
signed shipping instructions for the delivery of the Pledged Loan, including the
following:

 

1.                                      Name and address of the Investor or the
Approved Custodian to which the Collateral Documents are to be shipped, the
desired shipping date and the preferred method of

 

Exhibit B-2-A-5

--------------------------------------------------------------------------------

 

delivery (which must be a shipper utilized by Lender), with Borrower’s billing
account information for such shipper (or alternatively a pre-labeled envelope).

 

2.                                      Name of the project securing the Pledged
Loan.

 

3.                                      Date by which the Investor or the
Approved Custodian must receive the Pledged Loan.

 

4.                                      Instructions for endorsement of the
Mortgage Note.  For an FHA Construction Mortgage Loan, Lender will, if
instructed, endorse and deliver the Mortgage Note following the initial
Warehousing Advance for that Mortgage Loan.

 

5.                                      Completed but not signed Release of
Security Interest (HUD Form 11711A), to be signed and delivered by Lender.  With
respect to Warehousing Advances against FHA Construction Mortgage Loans, Lender
will only sign and deliver a Release of Security Interest (HUD Form 11711A) for
the initial and the last Warehousing Advances for that Mortgage Loan.

 

Unless otherwise agreed in writing with Borrower, Lender exclusively will
deliver the Mortgage Note and other original Collateral Documents relating to
the Collateral evidencing a Pledged Loan, together with a bailee letter, to an
Investor or an Approved Custodian.  Upon instruction by Borrower, Lender will
complete the endorsement of the Mortgage Note.  If no Mortgage-backed Security
is to be issued, Lender will deliver the Mortgage Note with a bailee letter to
the Investor that issued the Purchase Commitment for the Pledged Loan or an
Approved Custodian for the Investor.  If a Mortgage-backed Security is to be
issued, Lender will deliver the Mortgage Note and the Release of Security
Interest with a Bailee Letter to an Approved Custodian for Ginnie Mae.

 

VIII.                     If A Ginnie Mae Security is to be issued, as soon as
possible following Closing, but no later than Three (3) Business Days prior to
Settlement Date for a Security, Lender must receive:

 

1.                                      A signed copy of the Schedule of
Subscribers (HUD Form HUD-11705), instructing Ginnie Mae to issue the
mortgage-backed Security in Borrower’s name, and to deliver the Security to
Lender’s custody account at the Federal Reserve Bank of Cleveland (ABA
043000096, For: PNC Pitt/Trust/, Reference:  Walker & Dunlop, LLC).

 

2.                                      Completed and signed Securities Delivery
Instructions, in the form set forth below in this Exhibit.

 

Upon receipt of a Security, Lender will deliver the Security to the Investor
that issued the Purchase Commitment for the Security.  The Security will be
released to the Investor only upon payment of the purchase proceeds to Lender. 
Cash proceeds of the sale of a Pledged Loan or a Security will be applied to the
related Warehousing Advance.  As long as no Default or Event of Default exists,
Lender will return any excess proceeds from the sale of a Pledged Loan or a
Security to Borrower (by transfer to Borrower’s Operating Account), unless
otherwise instructed in writing.

 

Exhibit B-2-A-6

--------------------------------------------------------------------------------

 

OPERATING ACCOUNT#:

SCHEDULE I TO EXHIBIT B-2-A— FHA/GNMA

 

PNC BANK, N.A.

SECURITY DELIVERY INSTRUCTIONS

 

INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF PICK-UP/
DELIVERY

 

BOOK-ENTRY DATE:

 

SETTLEMENT DATE:

ISSUER:

 

 

$

 

SECURITY:

NO. OF CERTIFICATES:

 

1)

 

 

2)

 

 

3)

CUSIP NO.:

 

 

Pool No.          MI No.

 

Coupon Rate:

Issue Date (MM/DD/YYYY):

 

Maturity Dated (MM/DD/YYYY):

 

 

 

POOL TYPE (circle one):

 

 

Ginnie Mae:                    GINNIE MAE I

 

GINNIE MAE II

 

 

 

Fannie Mae:                    FIXED ARM

 

DISCOUNT NOTE DEBENTURES REMIC

 

 

 

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

 

CLIENT:

 

 

PROJECT:

 

 

AUTHORIZED SIGNATURE:

 

 

TITLE:

 

 

--------------------------------------------------------------------------------

 

Exhibit B-2-B — FHA Modified Mortgage Loan

 

PROCEDURES AND DOCUMENTATION FOR WAREHOUSING

FHA MODIFIED MORTGAGE LOANS

AND RELATED GINNIE MAE MORTGAGE-BACKED SECURITIES

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) must
observe the following procedures and documentation requirements in all
respects.  All documents must be satisfactory to PNC Bank, N.A., a national
banking association (“Lender”) in its sole discretion.  Capitalized terms used
in this Exhibit without further definition have the meanings set forth in the
Second Amended and Restated Warehousing Credit and Security Agreement among
Borrower, Lender party thereto and Lender (as amended, restated, renewed or
replaced, the “Agreement”).  HUD form numbers used in this Exhibit are for
convenience only and Borrower must use the equivalent forms required at the time
of delivery of a Pledged Mortgage or a Pledged Security.

 

I.                                        At least Three (3) Business Days prior
to the Warehousing Advance Date, Lender must receive a letter signed by Borrower
providing the following information on the Pledged Mortgage or Security,
together with the noted Mortgage Loan Documents:

 

1.                                      Mortgagor’s name.

 

2.                                      Project Name.

 

3.                                      Borrower’s case/loan number.

 

4.                                      HUD’s case/loan number.

 

5.                                      Location of project.

 

6.                                      Mortgage Note Amount.

 

7.                                      Existing Security Balance/Expected
Advance Amount.

 

8.                                      Expected Warehousing Advance date.

 

9.                                      Evidence that the prepayment premium
associated with the existing Ginnie Mae security has been deposited by Borrower
into the Borrower’s Ginnie Mae P&I Account.

 

10.                               Name and address of Borrower’s counsel for the
Mortgage Loan modification.

 

11.                               Copies of the following Loan Documents:

 

(a)                                 Existing Note,

 

(b)                                 Existing Mortgage,

 

(c)                                  Existing Regulatory Agreement, if requested
by Lender,

 

Exhibit B-2-B-1

--------------------------------------------------------------------------------

 

(d)                                 Existing Security Agreement if requested by
Lender, and

 

(e)                                  Ginnie Mae Approval Letter.

 

12.                               Copies of the proposed Loan modification
documents (the “Mortgage Loan Modification Documents”):

 

(a)                                 Proposed Allonge to Mortgage Note, as
consented to by HUD, and

 

(b)                                 Proposed Modification of Mortgage Note,
Mortgage, Regulatory Agreement and Security Agreement, each to the extent
applicable, and as approved by HUD.

 

II.                                   At least One (1) Business Day prior to the
Warehousing Advance Date, Borrower will send to Lender, for receipt before 11:00
a.m. (Pittsburgh, Pennsylvania time) the following Business Day, the following:

 

1.                                      An original or facsimile (with original
to be forwarded via overnight delivery) of the Warehousing Advance Request
subject to changes to be communicated in writing by Borrower to Lender before
11:00 a.m. (Pittsburgh, Pennsylvania time) on the day of the Warehousing
Advance.

 

2.                                      A letter from Borrower providing the
following additional information on the Pledge Loan:

 

(a)                                 Note Rate.

 

(b)                                 Name of Investor.

 

(c)                                  Discount (if any).

 

3.                                      A sources and uses statement prepared by
Borrower must be delivered on the date of the Warehousing Advance, prior to
funding (but a copy of the closing settlement statement shall be delivered to
Lender following the Warehousing Advance).

 

4.                                      A completed and executed Loan
Disbursement Authorization in the form attached hereto as Exhibit O.

 

5.                                      Copy of the HUD Approval Letter.

 

6.                                      A copy of the Purchase Commitment or
trade confirmation for the new mortgage-backed Security (or the original thereof
if requested by Lender).

 

No Warehousing Advance will be made by Lender prior to Lender’s receipt of all
documents required under Section II above.  Lender has a reasonable time (one
(1) Business Day under ordinary circumstances) to examine Borrower’s Warehousing
Advance Request and the related documents to be delivered by Borrower before
funding the requested Warehousing Advance, and may reject any Eligible Mortgage
that does not meet the requirements of this Exhibit, the Agreement or of the
related Purchase Commitment.

 

Exhibit B-2-B-2

--------------------------------------------------------------------------------

 

III.                              On the Warehousing Advance Date, Lender must
receive the following:

 

1.                                      For any Warehousing Advance other than
one relating to a Mortgage that Borrower, self-funded with unencumbered funds
(herein a “Pre-funded Mortgage Loan”), the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 A copy of the fully executed Mortgage Loan
Modification Documents, as endorsed for insurance by HUD.

 

(c)                                  A copy of the unrecorded, undated and in
blank, assignment of the Mortgage, in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the existing
title insurance policy obtained in connection with the closing of the existing
Mortgage Loan (or a copy of any title update made in connection with a Mortgage
Loan Modification), which:

 

(i)                                     Names as insured the “Mortgagee and/or
the Secretary of the Department of Housing and Urban Development, and their
successors and assigns, as their interests may appear.”

 

(ii)                                  Sets forth an insured amount that is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  Documents that are reasonably requested by
Lender.

 

2.                                      For any Warehousing Advance relating to
a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 An original of the fully executed Mortgage
Loan Modification Documents, as endorsed for insurance by HUD.

 

(c)                                  An original of the unrecorded, undated and
in blank, assignment of the Mortgage, in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the existing
title insurance policy obtained in connection with the closing of the existing
Mortgage Loan (or a copy of any title update made in connection with a Mortgage
Loan Modification), which:

 

(i)                                     Names as insured the “Mortgagee and/or
the Secretary of the Department of Housing and Urban Development, and their
successors and assigns, as their interests may appear.”

 

(ii)                                  Sets forth an insured amount that is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  Documents that are reasonably requested by
Lender.

 

Exhibit B-2-B-3

--------------------------------------------------------------------------------

 

IV.                               As soon as possible after the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Mortgage Loan
Modification Documents, Lender must receive:

 

1.                                      The original unrecorded, undated and in
blank, assignment of the Mortgage, in the form attached hereto as Exhibit P,
sent by overnight delivery.

 

2.                                      The remainder of the documents required
for shipping to the Investor as specified by the Investor or in the applicable
Seller/Servicer Guide or to an Approved Custodian for the Investor, including
the original release documents required by the Investor.

 

3.                                      Documents that are reasonably requested
by Lender, including a copy of the closing settlement statement.

 

V.                                    As soon as possible after the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Mortgage Loan
Modification Documents, Lender must receive signed shipping instructions for the
delivery of the Pledged Mortgage Loan Modification Documents, including the
following:

 

1.                                      Name and address of the Investor or the
Approved Custodian to which the Collateral Documents are to be shipped, the
desired shipping date and the preferred method of delivery (which must be a
shipper utilized by Lender), with Borrower’s billing account information for
such shipper (or alternatively a pre-labeled envelope).

 

2.                                      Name of the project securing the Pledged
Loan.

 

3.                                      Date by which the Investor or the
Approved Custodian must receive the Pledged Loan.

 

4.                                      Instructions for endorsement of the
Mortgage Loan Modification Documents.

 

5.                                      Completed but not signed Release of
Security Interest (HUD Form 11711A), to be signed and delivered by Lender.

 

Unless otherwise agreed in writing with Borrower, Lender exclusively will
deliver the Mortgage Loan Modification Documents and other original Collateral
Documents relating to the Collateral evidencing a Pledged Loan, together with a
bailee letter, to an Investor or an Approved Custodian.  Upon instruction by
Borrower, Lender will complete the endorsement of the Mortgage Loan Modification
Documents.  Lender will deliver the Mortgage Loan Modification Documents and the
Release of Security Interest with a Bailee Letter to an Approved Custodian for
Ginnie Mae.

 

VI.                               As soon as possible following Closing, but no
later than Three (3) Business Days prior to Settlement Date for a Security,
Lender must receive:

 

1.                                      A signed copy of the Schedule of
Subscribers (HUD Form HUD-11705), instructing Ginnie Mae to issue the
mortgage-backed Security in Borrower’s name, and to deliver the

 

Exhibit B-2-B-4

--------------------------------------------------------------------------------

 

Security to Lender’s custody account at the Federal Reserve Bank of Cleveland
(ABA 043000096, For: PNC Pitt/Trust/, Reference:  Walker & Dunlop, LLC).

 

2.                                      Completed and signed Securities Delivery
Instructions, in the form set forth below in this Exhibit.

 

Upon receipt of a Security, Lender will deliver the Security to the Investor
that issued the Purchase Commitment for the Security.  The Security will be
released to the Investor only upon payment of the purchase proceeds to Lender. 
Cash proceeds of the sale of a Security will be applied to the related
Warehousing Advance.  As long as no Default or Event of Default exists, Lender
will return any excess proceeds from the sale of a Pledged Loan or a Security to
Borrower (by transfer to Borrower’s Operating Account), unless otherwise
instructed in writing.

 

Exhibit B-2-B-5

--------------------------------------------------------------------------------

 

OPERATING ACCOUNT#:

SCHEDULE I TO EXHIBIT B-2-B— FHA MODIFIED MORTGAGE LOAN

 

PNC BANK, N.A.

SECURITY DELIVERY INSTRUCTIONS

 

INSTRUCTIONS MUST BE RECEIVED TWO (2) BUSINESS DAYS IN ADVANCE OF PICK-UP/
DELIVERY

 

BOOK-ENTRY DATE:

 

SETTLEMENT DATE:

ISSUER:

 

 

$

 

SECURITY:

NO. OF CERTIFICATES:

 

1)

 

 

2)

 

 

3)

CUSIP NO.:

 

 

Pool No.                   MI No.

 

Coupon Rate:

Issue Date (MM/DD/YYYY):

 

Maturity Dated (MM/DD/YYYY):

 

 

 

POOL TYPE (circle one):

 

 

Ginnie Mae:                           GINNIE MAE I

 

GINNIE MAE II

 

 

 

Fannie Mae:                            FIXED ARM

 

DISCOUNT NOTE DEBENTURES REMIC

 

 

 

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

DELIVER TO:

 

( ) Versus Payment

 

 

DVP AMOUNT $

 

 

CLIENT:

 

 

PROJECT:

 

 

AUTHORIZED SIGNATURE:

 

 

TITLE:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B-3-A — FREDDIE MAC PROGRAM PLUS LOANS

 

PROCEDURES FOR DOCUMENTING WAREHOUSING ADVANCES

 

PROCEDURES AND DOCUMENTATION FOR WAREHOUSING

FREDDIE MAC PROGRAM PLUS LOANS

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) must
observe the following procedures and documentation requirements in all
respects.  All documents must be satisfactory to PNC Bank, N.A., a national
banking association (the “Lender”) in its sole discretion.  Capitalized terms
used in this Exhibit without further definition have the meanings set forth in
the Second Amended and Restated Warehousing Credit and Security Agreement among
Borrower, Lender, and Lender party thereto (as amended, restated, renewed or
replaced, the “Agreement”).  Freddie Mac form numbers used in this Exhibit are
for convenience only and Borrower must use the equivalent forms required at the
time of delivery of a Pledged Loan or a Pledged Security.

 

I.                                        At least Three (3) Business Days prior
to the Warehousing Advance Date, Lender must receive a letter signed by
Borrower, providing the following information on the Pledged Loan:

 

1.                                      Mortgagor’s name.

 

2.                                      Project name.

 

3.                                      Borrower’s case/loan number.

 

4.                                      Location of project.

 

5.                                      Mortgage Note Amount.

 

6.                                      Expected Warehousing Advance Date.

 

7.                                      Name and address of Borrower’s counsel
to be present at closing.

 

8.                                      Name, street address, e-mail address,
telephone number and telecopier number of title company and settlement attorney
and contact person.  Must identify who will be responsible for custody of
closing documents and delivery of required items to Lender.

 

9.                                      In the event Borrower self-funded the
Mortgage Loan with unencumbered funds (herein a “Pre-funded Mortgage Loan”),
then in the alternative to clause I, 7 above, the original closing date of the
Pre-funded Mortgage Loan.

 

Upon receipt of Borrower’s letter required under this Section I, in form and
substance satisfactory to Lender, Lender will issue its escrow instructions
letter to the title company or the settlement attorney, to the extent
applicable.

 

EXHIBIT B-3-A-1

--------------------------------------------------------------------------------

 

II.                                   At least One (1) Business Day prior to the
Warehousing Advance Date, Borrower will send to Lender, for receipt before 11:00
a.m. (Pittsburgh, Pennsylvania time) the following Business Day, the following:

 

1.                                      An original or facsimile (with original
to be forwarded via overnight delivery) of the Warehousing Advance Request
subject to changes to be communicated in writing by Borrower to Lender before
11:00 a.m. (Pittsburgh, Pennsylvania time) on the day of the Warehousing
Advance.

 

2.                                      A letter from Borrower providing the
following additional information on the Pledge Loan:

 

(a)                                 Note Rate.

 

(b)                                 Name of Investor.

 

(c)                                  Discount (if any).

 

3.                                      A sources and uses statement prepared by
Borrower must be delivered on the date of the Warehousing Advance, prior to
funding (but a copy of the closing settlement statement shall be delivered to
Lender following the Warehousing Advance).

 

4.                                      A completed and executed Loan
Disbursement Authorization in the form attached hereto as Exhibit O.

 

5.                                      A copy of the executed Purchase
Commitment (which must conform to requirements of the Agreement).

 

6.                                      Original or facsimile of Lender’s escrow
instructions letter to the settlement attorney, countersigned by an authorized
representative of the settlement attorney involved with the transaction, in a
form substantially similar to that attached hereto as (a) Exhibit N-1 if the
settlement attorney will also be acting as the bailee with respect to the
Mortgage Note or (b) Exhibit N-2 if the settlement attorney will not be acting
as the bailee with respect to the Mortgage Note. (the “Escrow Letter”).  The
foregoing conditions shall not be applicable in the event the Warehousing
Advance is to be used to reimburse Borrower for a Pre-funded Mortgage Loan.

 

No Warehousing Advance will be made by Lender prior to Lender’s receipt of all
the documents required under Section II above.  Lender has a reasonable time
(one (1) Business Day under ordinary circumstances) to examine Borrower’s
Warehousing Advance Request and the related documents to be delivered by
Borrower before funding the requested Warehousing Advance, and may reject any
Mortgage Loan that does not meet the requirements of this Exhibit, the Agreement
or of the related Purchase Commitment.

 

In accordance with the Escrow Letter, if applicable, disbursement will be
authorized only after the settlement attorney or closing counsel takes
possession, on behalf of Lender, of the signed Mortgage Note, endorsed by
Borrower in blank and without recourse, and the title company is prepared to
issue its title insurance policy.  Immediately after disbursement, the
settlement

 

EXHIBIT B-3-A-2

--------------------------------------------------------------------------------

 

attorney, the closing attorney or title company (herein, the “Closing Agent”)
must send the original of the Mortgage Note to Lender for receipt by Lender on
the following Business Day.  In the event the Pledged Loan is not closed and the
related Mortgage submitted for recording by 4:30 p.m. (Pittsburgh, Pennsylvania
time) on the date of the Warehousing Advance, the Closing Agent must return the
Warehousing Advance immediately to the account specified in Lender’s escrow
instructions unless otherwise approved by Lender prior to such time; provided,
however, that the Warehousing Advance may remain with the title company for up
to two (2) Business Days with prior written notice to Lender and, if longer than
two (2) Business Days, with prior written approval of Lender.

 

The foregoing arrangements, which permit Lender to fund the Warehousing Advance
after the Mortgage Note has been delivered to a third person on behalf of, and
as agent and bailee for, Lender, and before the Mortgage Note is received by
Lender, are for the convenience of Borrower.  Borrower retains all risk of loss
or nondelivery of the Mortgage Note, and Lender has no liability or
responsibility for those risks.

 

For any Warehousing Advance relating to a Pre-funded Mortgage Loan, the parties
shall not engage a Closing Agent or utilize an Escrow Letter.

 

III.                              On the Warehousing Advance Date, Lender must
receive the following:

 

1.                                      For any Warehousing Advance other than
one relating to a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 A copy of the Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor.

 

(c)                                  A copy of the unrecorded, undated and in
blank, assignment of the Mortgage in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured Borrower and/or the
Investor, and their successors and assigns, as their interests may appear;

 

(ii)                                  Shows effective date and time which is as
of the date and time of disbursement of the Warehousing Advance from escrow; and

 

(iii)                               Sets forth an insured amount which is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  A bailee agreement executed by Borrower’s
closing counsel, in the form of (a) Exhibit N-1 if the closing counsel is also
acting as the settlement attorney with respect to the Warehousing Advance funds
or (b) Exhibit N-3 if the closing counsel is not acting as the settlement
attorney with respect to the Warehousing

 

EXHIBIT B-3-A-3

--------------------------------------------------------------------------------

 

Advance funds, whereby in either case the closing counsel agrees that it will
hold the original Mortgage Note as bailee for and on behalf of Lender and
deliver it to Lender by recognized overnight delivery within One (1) Business
Day after the Warehousing Advance Date.

 

(f)                                   Written notice by electronic mail or
facsimile authorizing Lender to disburse funds to the Escrow Agent as set forth
in the Escrow Letter, to be held in trust by the Escrow Agent pending the
Borrower’s authorization to release such funds.

 

(g)                                  Documents that are reasonably requested by
Lender.

 

2.                                      For any Warehousing Advance relating to
a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 The original Mortgage Note made by the
Mortgagor in favor of Borrower, executed by the Mortgagor.

 

(c)                                  The original unrecorded, undated and in
blank, assignment of the Mortgage in the form attached hereto as Exhibit P.

 

(d)                                 A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured Borrower and/or the
Investor, and their successors and assigns, as their interests may appear;

 

(ii)                                  Shows the recording date of the Mortgage
as being prior to the date of the Warehousing Advance; and

 

(iii)                               Sets forth an insured amount which is equal
to or greater than the aggregate Warehousing Advance amount.

 

(e)                                  Documents that are reasonably requested by
Lender.

 

(f)                                   A sources and uses statement prepared by
Borrower.

 

IV.                               As soon as possible following the Warehousing
Advance Date, and no later than One (1) Business Day after the Warehousing
Advance Date, Lender much receive the following:

 

1.                                      If not previously delivered, the
original signed Mortgage Note, endorsed by Borrower in blank and without
recourse.

 

2.                                      A copy of the closing settlement
statement.

 

EXHIBIT B-3-A-4

--------------------------------------------------------------------------------

 

V.                                    As soon as possible after the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Mortgage, Lender
must receive:

 

1.                                      If not previously delivered, the
original unrecorded, undated and in blank assignment of the Mortgage, in the
form attached hereto as Exhibit P, sent by overnight delivery.

 

2.                                      The remainder of the documents required
for shipping to the Investor as specified by the Investor or in the applicable
Seller/Servicer Guide or to an Approved Custodian for the Investor, including
the original release documents required by the Investor.

 

3.                                      Documents that are reasonably requested
by Lender.

 

VI.                               As soon as possible following the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Loan, Lender must
receive the following:

 

1.                                      Signed shipping instructions for the
delivery of the Pledged Loan, including the following:

 

(a)                                 Name and address of the Investor or the
Approved Custodian to which the Collateral Documents are to be shipped, the
desired shipping date and the preferred method of delivery (which must be a
shipper utilized by Lender), with Borrower’s billing account information for
such shipper (or alternatively a pre-labeled envelope);

 

(b)                                 Name of project securing the Pledged Loan;

 

(c)                                  Date by which the Investor or the Approved
Custodian must receive the Pledged Loan; and

 

(d)                                 Instructions for endorsement of the Mortgage
Note.

 

2.                                      For Freddie Mac Program Plus Loans, the
following additional documents must be received:

 

(a)                                 For cash payments, the signed original Wire
Transfer Authorization for a Cash Warehouse Delivery (Multifamily) (Freddie Mac
Form 987M), specifying the Cash Collateral Account as the receiving account for
loan purchase proceeds.

 

(b)                                 Warehouse Lender Release of Security
Interest (Multifamily) (Freddie Mac Form 996M).

 

3.                                      The remainder of the documents required
for shipping to the Investor, as specified by the Investor or in the applicable
seller/servicer guide.

 

EXHIBIT B-3-A-5

--------------------------------------------------------------------------------

 

EXHIBIT B-3-B — FREDDIE MAC DIRECT PURCHASE MORTGAGE LOANS

 

PROCEDURES FOR DOCUMENTING WAREHOUSING ADVANCES

 

PROCEDURES AND DOCUMENTATION FOR WAREHOUSING

FREDDIE MAC DIRECT PURCHASE MORTGAGE LOANS

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) must
observe the following procedures and documentation requirements in all
respects.  All documents must be satisfactory to PNC Bank, N.A., a national
banking association (the “Lender”) in its sole discretion.  Capitalized terms
used in this Exhibit without further definition have the meanings set forth in
the Second Amended and Restated Warehousing Credit and Security Agreement among
Borrower, Lender, and Lender party thereto (as amended, restated, renewed or
replaced, the “Agreement”).  For purposes of these procedures applicable to
Freddie Mac Direct Purchase Mortgage Loans, the term “Mortgage Loan” as used
herein shall mean collectively, the Funding Loan to be made by Borrower to the
Governmental Lender, and the Project Loan to be made by the Governmental Lender
to the Mortgagor, and collaterally assigned by the Governmental Lender to
Borrower as security for the Funding Loan.  Freddie Mac form numbers used in
this Exhibit are for convenience only and Borrower must use the equivalent forms
required at the time of delivery of a Pledged Loan or a Pledged Security.

 

I.                                        At least Three (3) Business Days prior
to the Warehousing Advance Date, Lender must receive a letter signed by
Borrower, providing the following information on the Pledged Loan:

 

1.                                      Governmental Lender.

 

2.                                      Mortgagor’s name.

 

3.                                      Project name.

 

4.                                      Borrower’s case/loan number.

 

5.                                      Location of project.

 

6.                                      Governmental Note Amount.

 

7.                                      Mortgage Note Amount.

 

8.                                      Expected Warehousing Advance Date.

 

9.                                      Name and address of Governmental
Lender’s counsel.

 

10.                               Name and address of Borrower’s counsel.

 

11.                               Name, street address, e-mail address,
telephone number and telecopier number of title company and settlement attorney
and contact person.  Must identify who will be responsible for custody of
closing documents and delivery of required items to Lender.

 

EXHIBIT B-3-B-1

--------------------------------------------------------------------------------

 

12.                               In the event Borrower self-funded the Mortgage
Loan with unencumbered funds (herein a “Pre-funded Mortgage Loan”), then in
alternative to clause I, 11 above, the original closing date of the Pre-funded
Mortgage Loan.

 

Upon receipt of Borrower’s letter required under this Section I, in form and
substance satisfactory to Lender, Lender will issue its escrow instructions
letter to the title company or the settlement attorney.

 

II.                                   At least One (1) Business Day prior to the
Warehousing Advance Date, Borrower will send to Lender, for receipt before 11:00
a.m. (Pittsburgh, Pennsylvania time) the following Business Day, the following:

 

1.                                      An original or facsimile (with original
to be forwarded via overnight delivery) of the Warehousing Advance Request
subject to changes to be communicated in writing by Borrower to Lender before
11:00 a.m. (Pittsburgh, Pennsylvania time) on the day of the Warehousing
Advance.

 

2.                                      A letter from Borrower providing the
following additional information on the Pledge Loan:

 

(a)                                 Note Rate.

 

(b)                                 Name of Investor.

 

(c)                                  Discount (if any).

 

3.                                      A sources and uses statement prepared by
Borrower must be delivered on the date of the Warehousing Advance, prior to
funding (but a copy of the closing settlement statement shall be delivered to
Lender following the Warehousing Advance).

 

4.                                      A completed and executed Loan
Disbursement Authorization in the form attached hereto as Exhibit O.

 

5.                                      A copy of the executed Purchase
Commitment (which must conform to requirements of the Agreement).

 

6.                                      Original or facsimile of Lender’s escrow
instructions letter to the settlement attorney, countersigned by an authorized
representative of the settlement attorney involved with the transaction, in a
form substantially similar to that attached hereto as (a) Exhibit N-1 if the
settlement attorney will also be acting as the bailee with respect to the
Governmental Note or (b) Exhibit N-2 if the settlement attorney will not be
acting as the bailee with respect to the Governmental Note.  The foregoing
conditions shall not be applicable in the event the Warehousing Advance is to be
used to reimburse Borrower for any Pre-funded Mortgage Loan.

 

No Warehousing Advance will be made by Lender prior to Lender’s receipt of all
the documents required under Section II above.  Lender has a reasonable time
(one (1) Business Day under ordinary circumstances) to examine Borrower’s
Warehousing Advance Request and the related

 

EXHIBIT B-3-B-2

--------------------------------------------------------------------------------

 

documents to be delivered by Borrower before funding the requested Warehousing
Advance, and may reject any Mortgage Loan that does not meet the requirements of
this Exhibit, the Agreement or of the related Purchase Commitment.

 

In accordance with the Escrow Letter, if applicable, disbursement will be
authorized only after the settlement attorney or closing counsel takes
possession, on behalf of Lender, of the signed Governmental Note, endorsed by
Borrower in blank and without recourse, and the title company is prepared to
issue its title insurance policy.  Immediately after disbursement, the
settlement attorney, the closing attorney or title company (herein, the “Closing
Agent”) must send the original of the Governmental Note to Lender for receipt by
Lender on the following Business Day.  In the event the Pledged Loan is not
closed and the related Mortgage submitted for recording by 4:30
p.m. (Pittsburgh, Pennsylvania time) on the date of the Warehousing Advance, the
Closing Agent must return the Warehousing Advance immediately to the account
specified in the for receipt by Lender’s escrow instructions unless otherwise
approved by Lender prior to such time; provided, however, that the Warehousing
Advance may remain with the title company for up to two (2) Business Days with
prior written notice to Lender and, if longer than two (2) Business Days, with
prior written approval of Lender.

 

The foregoing arrangements, which permit Lender to fund the Warehousing Advance
after the Governmental Note has been delivered to a third person on behalf of,
and as agent and bailee for, Lender, and before the Governmental Note is
received by Lender, are for the convenience of Borrower.  Borrower retains all
risk of loss or nondelivery of the Governmental Note, and neither Lender nor any
Lender has any liability or responsibility for those risks.

 

III.                              On the Warehousing Advance Date, Lender must
receive the following:

 

1.                                      For any Warehousing Advance other than
one relating to a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 A copy of the Governmental Note made by the
Governmental Lender in favor of Borrower, executed by Governmental Lender.

 

(c)                                  A fully executed copy of the Funding Loan
Agreement between Borrower and Governmental Lender.

 

(d)                                 A copy of the Mortgage Note made by the
Mortgagor in favor of Governmental Lender, executed by the Mortgagor.

 

(e)                                  A copy of the blank and undated collateral
assignment of Funding Loan, in form and content reasonably acceptable to Lender.

 

(f)                                   A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which:

 

(i)                                     Names as insured Governmental Lender
and/or Fiscal Agent, and their successors and assigns, as their interests may
appear;

 

EXHIBIT B-3-B-3

--------------------------------------------------------------------------------

 

(ii)                                  Shows an effective date and time that is
as of the date and time of disbursement of the Warehousing Advance from escrow;
and

 

(iii)                               Sets forth an insured amount that is equal
to or greater than the Warehousing Advance amount.

 

(g)                                  A bailee agreement executed by Governmental
Lender’s or Borrower’s closing counsel, in the form of (a) Exhibit N-1 if the
closing counsel is also acting as the settlement attorney with respect to the
Warehousing Advance funds or (b) Exhibit N-3 if the closing counsel is not
acting as the settlement attorney with respect to the Warehousing Advance funds,
whereby in either case the closing counsel agrees that it will hold the original
Governmental Note as bailee for and on behalf of Lender and deliver it to Lender
by recognized overnight delivery within One (1) Business Day after the
Warehousing Advance Date.

 

(h)                                 Written notice by electronic mail or
facsimile authorizing Lender to disburse funds to the Escrow Agent as set forth
in the Escrow Letter, to be held in trust by the Escrow Agent pending the
Borrower’s authorization to release such funds.

 

(i)                                     Documents that are reasonably requested
by Lender.

 

2.                                      For any Warehousing Advance relating to
a Pre-funded Mortgage Loan, the following:

 

(a)                                 A sources and uses statement prepared by
Borrower.

 

(b)                                 An original of the Governmental Note made by
the Governmental Lender in favor of Borrower, executed by Governmental Lender.

 

(c)                                  An original of the Funding Loan Agreement
between Borrower and Governmental Lender.

 

(d)                                 A copy of the Mortgage Note made by the
Mortgagor in favor of Governmental Lender, executed by the Mortgagor.

 

(e)                                  An original of the blank and undated
collateral assignment of Funding Loan, in form and content reasonably acceptable
to Lender.

 

(f)                                   A copy of the first page of the title
insurance policy or the title insurance commitment to issue a policy marked to
show the final policy exceptions, which

 

(i)                                     Names as insured Governmental Lender
and/or Fiscal Agent, and their successors and assigns, as their interests may
appear;

 

(ii)                                  Shows the recording date of the Mortgage
as being prior to the date of the Warehousing Advance; and

 

(iii)                               Sets forth an insured amount that is equal
to or greater than the Warehousing Advance amount.

 

EXHIBIT B-3-B-4

--------------------------------------------------------------------------------

 

IV.                               As soon as possible following the Warehousing
Advance Date, and no later than One (1) Business Day after the Warehousing
Advance Date, Lender much receive the following:

 

1.                                      If not previously delivered, the
original signed Governmental Note, endorsed by Borrower in blank and without
recourse.

 

2.                                      If  not previously delivered, the
original fully executed collateral assignment of Funding Loan, in form and
content reasonably acceptable to Lender.

 

V.                                    As soon as possible after the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Mortgage, Lender
must receive:

 

1.                                      The remainder of the documents required
for shipping to the Investor as specified by the Investor or in the applicable
Seller/Servicer Guide or to an Approved Custodian for the Investor, including
the original release documents required by the Investor.

 

2.                                      Documents that are reasonably requested
by Lender, including the closing settlement statement.

 

VI.                               As soon as possible following the Warehousing
Advance Date, and no later than Two (2) Business Days prior to the date the
Investor or the Approved Custodian must receive the Pledged Loan, Lender must
receive the following:

 

1.                                      Signed shipping instructions for the
delivery of the Pledged Loan, including the following:

 

(a)                                 Name and address of the Investor or the
Approved Custodian to which the Collateral Documents are to be shipped, the
desired shipping date and the preferred method of delivery (which must be a
shipper utilized by Lender), with Borrower’s billing account information for
such shipper (or alternatively a pre-labeled envelope);

 

(b)                                 Name of project securing the Pledged Loan;

 

(c)                                  Date by which the Investor or the Approved
Custodian must receive the Pledged Loan; and

 

(d)                                 Instructions for endorsement of the
Governmental Note.

 

2.                                      The following additional documents must
be received:

 

(a)                                 For cash payments, the signed original Wire
Transfer Authorization for a Cash Warehouse Delivery (Multifamily) (Freddie Mac
Form 987M), specifying the Cash Collateral Account as the receiving account for
loan purchase proceeds.

 

EXHIBIT B-3-B-5

--------------------------------------------------------------------------------

 

(b)                                 Warehouse Lender Release of Security
Interest (Multifamily) (Freddie Mac Form 996M).

 

3.                                      The remainder of the documents required
for shipping to the Investor, as specified by the Investor or in the applicable
seller/servicer guide.

 

EXHIBIT B-3-B-6

--------------------------------------------------------------------------------

 

Exhibit C

 

Warehousing Advance Request Against Eligible Loans

 

WALKER & DUNLOP, LLC

 

ELIGIBLE LOAN TYPE:

 

oFANNIE MAE DUS MORTGAGE LOAN

 

 

oCheck if ASAPP funding

 

 

oOTHER FANNIE MAE MORTGAGE LOAN

 

 

oFHA PERMANENT MORTGAGE LOAN

 

 

oFHA CONSTRUCTION MORTGAGE LOAN
o FHA MODIFIED MORTGAGE LOAN
o FREDDIE MAC PROGRAM PLUS MORTGAGE LOAN

 

 

oFREDDIE MAC DIRECT PURCHASE MORTGAGE LOAN

STATUS OF ELIGIBLE LOAN:

 

oFIRST MORTGAGE LOAN

 

 

oSECOND MORTGAGE LOAN [If permitted]

 

 

oTHIRD MORTGAGE LOAN [If permitted]

 

[PLEASE UPDATE STATUS]

 

NOTE: FHA MORTGAGE LOANS MAY ONLY BE REQUESTED BY WALKER & DUNLOP, LLC
(“BORROWER”), AND ARE NOT ELIGIBLE UNTIL LENDER HAS CONFIRMED BORROWER’S STATUS
AS APPROVED HUD/FHA MORTGAGEE AND GINNIE MAE SERVICER, AS APPLICABLE

 

Loan No.:

 

Warehouse Date:

 

 

 

Project Name:

 

Contract/Pool No.:

 

 

 

Project State and Zip Code:

 

 

 

 

 

Mortgage Note Amount:

 

Interest Rate:

 

 

 

Mortgage Note Date:

 

 

 

 

 

Warehousing Advance Amount:

 

 

 

 

 

Approved Warehouse Amount:

 

Endorsement Amount:

 

 

 

Cumulative Endorsement Amount:

 

 

 

 

 

Investor:

 

Expiration Date:

 

Exhibit C-1

--------------------------------------------------------------------------------

 

Committed Purchase Price:

 

 

 

 

 

Title Company/Closing Agent:

 

 

 

 

 

Title Contact Person:

 

Phone No.:

 

 

 

Title Contact Person E-Mail Address:

 

 

 

 

 

Title Company Address:

 

 

 

Exhibit C-2

--------------------------------------------------------------------------------

 

Wire Transfer Information

Wire Amount:

 

Date of Wire:

Receiving Bank: PNC BANK, N.A

 

ABA No.: #043-000-096

City & State: Pittsburgh, PA

 

 

Credit Account Name: Walker & Dunlop LLC

 

Number:

Advise: Jessica Drummond

 

Phone: (412) 762-5622

 

Walker & Dunlop, LLC, a Delaware limited liability company (“Borrower”) has
granted, and hereby reaffirms the grant of, a security interest to PNC Bank,
N.A., a national banking association (“Lender”) in all of Borrower’s right,
title and interest in and to the Mortgage Loan described above and all related
Collateral pursuant to Section 4.1 of the Second Amended and Restated
Warehousing Credit and Security Agreement between Borrower and Lender (as
amended, restated, renewed or replaced, the “Agreement”).  Capitalized terms
used in this Exhibit without further definition have the meanings set forth in
the Agreement.

 

The undersigned represent and warrant as follows:

 

(a)                                 The borrowing requested hereby complies with
all applicable requirements of the Agreement.

 

(b)                                 Each representation and warranty made in the
Agreement is true and correct at and as of the date hereof (except to the extent
relating to a specific date) and will be true and correct at and as of the time
the Warehousing Advance is made, in each case both with and without giving
effect to the Warehousing Advance and the application of the proceeds thereof.

 

(c)                                  No Default or Event of Default has occurred
and is continuing as of the date hereof or would result from the making of the
Warehousing Advance or the application of the proceeds thereof if the
Warehousing Advance were made on the date hereof, and no Default or Event of
Default will have occurred and be continuing at the time the Warehousing Advance
is to be made or would result from the making of the Warehousing Advance or the
application of the proceeds thereof .

 

(d)                                 Borrower agrees to cause the Mortgage
Notes(s) and the other Collateral Documents to be delivered to Lender on the
first Business Day after the date of the Warehousing Advance made to fund the
Mortgage Loan.

 

(e)                                  If the proceeds of the Warehousing Advance
requested hereby are intended to be used for a FHA Mortgage Loan for which a
Ginnie Mae Security will be issued, Ginnie Mae has confirmed sufficient
additional commitment authority and pool numbers have been identified to permit
the consummation of such transactions.

 

AUTHORIZED SIGNATURE:

 

1

--------------------------------------------------------------------------------

 

WALKER & DUNLOP, LLC, a Delaware limited liability company

 

 

By:

 

 

 

 

 

Name

 

 

 

 

 

Title:

 

 

 

2

--------------------------------------------------------------------------------

 

Exhibit D

 

Eligible Loans and Terms of Warehousing Advances

 

Subject to compliance with the terms and limitations set forth below, and the
terms, representations and warranties and the covenants in the Agreement
(including applicable Exhibits), each of the following Mortgage Loans is an
Eligible Loan for purposes of the Agreement:

 

Fannie Mae DUS Mortgage Loan

 

Definition:  A permanent Mortgage Loan on a Multifamily Property originated by
Borrower under Fannie Mae’s Delegated Underwriting and Servicing Guide. This
definition shall include any permanent Mortgage Loan on a Multifamily Property
originated by the Borrower pursuant to a Fannie Mae credit facility provided by
Fannie Mae, and in accordance with Fannie Mae’s Delegated Underwriting and
Servicing Guide.

 

Provided however, that in connection with any aforementioned permanent Mortgage
Loan on a Multifamily Property originated by the Borrower pursuant to a Fannie
Mae credit facility, in lieu of delivering a bailee letter in the form attached
to the Credit Facility Agreement as Exhibit N-3, Borrower shall cause Fannie
Mae’s counsel to deliver to Lender a bailee letter based on Fannie Mae’s then
current form bailee letter, as revised to include the following provision:

 

“Fannie Mae shall hold the Note and Additional Documents as bailee for the
benefit of Lender until (i) Fannie Mae delivers the Mortgage Backed Security (as
defined below) by wire transfer in accordance with the delivery instructions
specified on Form 2014, a copy of which is attached as Exhibit A hereto, or
(ii) Fannie Mae returns to Lender, as set forth below, the Note and any
Additional Documents delivered by Lender.  Lender agrees that Lender’s security
interest in the Note and Additional Documents shall terminate and be cancelled
without further action upon delivery by Fannie Mae of the Purchase Price.  In
the event that Fannie Mae does not issue the Mortgage Backed Security in
exchange for the Note, Fannie Mae will execute and deliver to Lender one or more
assignments, in recordable form, of the Security Instruments (as defined in the
Master Agreement) securing the Note and will endorse the Note in blank but
without recourse (assuming the Note has been endorsed to Fannie Mae), and sever
any applicable loan documents in connection with the Master Agreement as
necessary; and Lender agrees that Fannie Mae’s status as bailee for Lender shall
terminate and be cancelled without further action upon delivery to Lender of the
Note (endorsed as aforesaid) and Additional Documents, as described in
(ii) above, together with such executed assignment of the Security Instruments.

 

Subordinate Mortgage Loan:  Only Second Mortgage Loans and Third Mortgage Loans
permitted.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate: 100% of the lesser of (i) the Mortgage Note Amount or (ii) the
Committed Purchase Price.

 

D-1

--------------------------------------------------------------------------------

 

FHA Permanent Mortgage Loan

 

Definition:  A permanent FHA fully-insured Mortgage Loan secured by a mortgage
on a Multi-Family Property.

 

Subordinate Mortgage Loans:  Only second mortgage loans permitted.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate:  100% of the lesser of (i) the Mortgage Note Amount or (ii) the
Committed Purchase Price.

 

FHA Construction Mortgage Loan

 

Definition.  An FHA fully-insured Mortgage Loan for the construction or
substantial rehabilitation of a Multi-Family Property.  No Warehousing Advance
will be made against an FHA Construction Mortgage Loan unless (i) Lender has or
at one time had or will obtain (as provided in Exhibit B-2 — FHA/GNMA)
possession of the related Mortgage Note, or (ii) the related Mortgage Note is in
the possession of a Person other than Borrower or an Affiliate of Borrower.

 

Subordinate Mortgage Loans:  Not permitted.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate:  100% of the lesser of (i) Mortgage Note Amount or (ii) the
Committed Purchase Price.

 

FHA Modified Mortgage Loan

 

Definition:  A modified FHA fully-insured Mortgage Loan secured by a mortgage on
a Multi-Family Property.

 

Subordinate Mortgage Loans:  Only second mortgage loans permitted.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate:  100% of the lesser of (i) the n outstanding Mortgage Note Amount
or (ii) the Committed Purchase Price.

 

Freddie Mac Program Plus Loan

 

Definition:  Multi-Family Loans sold to Freddie Mac pursuant to the Freddie Mac
Program Plus Seller/Servicer program. This definition shall include any
permanent Multi-Family Loan on a Multifamily Property originated by the Borrower
pursuant to a Freddie Mac credit facility provided by Freddie Mac, and in
accordance with the Freddie Mac Program Plus Seller/Servicer program.

 

D-2

--------------------------------------------------------------------------------

 

Subordinate Mortgage Loans:  Only Second Mortgage Loans or Third Mortgage Loans
permitted.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate:  100% of the lesser of (i) the Mortgage Note Amount or (ii) the
Committed Purchase Price.

 

Freddie Mac Direct Purchase Mortgage Loan

 

Definition:  Multi-Family Loans sold to Freddie Mac pursuant to the Freddie Mac
TELP.

 

Subordinate Mortgage Loans:  Only Second Mortgage Loans or Third Mortgage Loans
permitted if permitted under the Freddie Mac TELP.

 

Committed/Uncommitted:  Purchase Commitment required.

 

Advance Rate:  100% of the lesser of (i) the Mortgage Note Amount or (ii) the
Committed Purchase Price.

 

D-3

--------------------------------------------------------------------------------

 

Exhibit E

 

Authorized Representatives

 

Stephen P. Theobald

Donna Mighty

Howard W. Smith III

William M. Walker

Debra A. Casale

Veronica Veraldi (Langhoffer)

Richard Warner

Gregory Florkowski

Jim Schroeder

Shannon Chase

Nancy Sexton

Loretta Webb

Michelle Warner

Dale Brem

Kenneth Buchanan

Ernest Benjamin

Holley Almeida

Paula Battista

Donna Potember

Mary Hui

Sue Nelson

Elizabeth Kieffer

Natalie Hamilton Miller

Holly Shonosky

Sheila Pasha

Kristin Layden

Sandra Barlow

Melissa Frado

Nancy McGrade

 

E-1

--------------------------------------------------------------------------------

 

Exhibit F

 

Subsidiaries of Borrower

 

[Intentionally omitted[

 

F-1

--------------------------------------------------------------------------------

 

Exhibit G

 

Assumed Names

 

None

 

G-1

--------------------------------------------------------------------------------

 

Exhibit H

 

Servicing Portfolio

 

Walker & Dunlop, Inc.
Loan Servicing Portfolio
Portfolio Size, Number of Loans
As of June 30, 2017

 

H-1

--------------------------------------------------------------------------------

 

Product / Investor

 

Loan Count

 

Fannie

 

2,118

 

Fannie-Small Loan

 

312

 

Freddie

 

1,332

 

Ginnie Mae HUD

 

1,152

 

A10 Capital

 

1

 

Aegon

 

36

 

AIG

 

25

 

Allstate

 

7

 

American Equity

 

28

 

American National Insurance

 

9

 

American United Life

 

56

 

Americo

 

3

 

Ameritas

 

58

 

Assurant Asset Management

 

6

 

Athene

 

61

 

Berkadia

 

1

 

Blue Vista

 

1

 

CDT

 

9

 

Colfin

 

1

 

Continental Casualty Company

 

1

 

CorAmerica

 

7

 

CUNA/MEMBERS Capital Advisors

 

53

 

Everbank

 

17

 

Farm Bureau Insurance of Michigan

 

6

 

Genworth

 

35

 

Great West

 

3

 

Guardian Life

 

1

 

Guggenheim

 

4

 

JP Morgan Chase

 

6

 

Kansas City Life Insurance Company

 

73

 

Life Insurance Company of the Southwest

 

4

 

Lincoln National

 

53

 

Minnesota Life Ins Co

 

43

 

Mutual of Omaha Life Insurance Co

 

9

 

National Life Insurance Company

 

1

 

Nationwide

 

47

 

Ohio National Financial Svcs.

 

6

 

PPM Financial

 

9

 

Principal Real Estate

 

2

 

Protective Life

 

20

 

RiverSource

 

8

 

Security Mutual Life of New York

 

1

 

SG Capital

 

7

 

Southern Farm Bureau Life

 

15

 

State Farm

 

1

 

Sun Life of Canada

 

9

 

Symetra

 

230

 

Thrivent Financial for Lutherans

 

21

 

Unum

 

6

 

Voya

 

14

 

W&D Interim Loan Fund

 

14

 

Woodmen of the World

 

12

 

 

 

 

 

Combined Total

 

5,954

 

 

H-2

--------------------------------------------------------------------------------

 

Exhibit I

 

Compliance Certificate

 

Reference is made to that certain Second Amended and Restated Warehousing Credit
and Security Agreement between Walker & Dunlop, LLC, a Delaware limited
liability company (“Borrower”), Lender and PNC Bank, N.A., a national banking
association (“Lender”), dated as of September 11, 2017(as the same may be
amended, modified, supplemented, renewed or restated from time to time, the
“Agreement”).  All capitalized terms and all Section numbers used herein refer
to those terms and Sections set forth in the Agreement.  This Compliance
Certificate is submitted to Lender pursuant to Section 7.2(c) of the Agreement.

 

The undersigned hereby certifies to Lender that, as of the close of business on
                 (“Statement Date”):

 

1.                                      As demonstrated by the attached
calculations supporting this Compliance Certificate, no Event of Default exists
under Sections 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.16 and 8.17 of the Agreement,
or, if any such Event of Default exists, a detailed explanation is attached
setting forth the nature and the period of existence of any Default or Event of
Default, and the action Borrower has taken, is taking, or proposes to take with
respect to that Default or Event of Default and/or fail to comply.

 

2.                                      I have reviewed the terms of the
Agreement, and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and conditions of Borrower and Parent. 
That review has not disclosed, and I have no other knowledge of the existence
of, any Default or Event of Default, or, if any such Default or Event of Default
existed or exists, a detailed explanation is attached setting forth the nature
and the period of existence of such Default or Event of Default and the action
Borrower has taken, is taking or proposes to take with respect that Default or
Event of Default.

 

3.                                      Pursuant to Section 7.2 of the
Agreement, enclosed are the financial statements and related materials of
Borrower or Parent, as applicable, as of the Statement Date.  The financial
statements for the period ending on the Statement Date fairly present the
financial condition and results of operations of Borrower or Parent, as
applicable, as of the Statement Date.

 

[Remainder of page intentionally left blank]

 

I-1

--------------------------------------------------------------------------------

 

Submitted under the pains and penalties of perjury this       day of        ,
    .

 

 

 

WALKER & DUNLOP, LLC, a Delaware limited liability company

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

I-2

--------------------------------------------------------------------------------

 

Exhibit J

 

Lines of Credit

 

1.                                      Bank of America, N.A.

 

2.                                      TD Bank, N.A.

 

3.                                      Capital One, National Association (2
lines)

 

J-1

--------------------------------------------------------------------------------

 

Exhibit K

 

Foreign Qualifications and Licenses

 

Walker and Dunlop, LLC current holds the following foreign licenses and
qualifications from these states:

 

·                  Alabama- Registered foreign limited liability company

·                  Arizona- Registered foreign limited liability company;
Collection Agency License

·                  Arkansas- Registered foreign limited liability company;
Collection Agency License

·                  California- Registered foreign limited liability company;
Finance Lender License

·                  Colorado- Registered foreign limited liability company

·                  District of Columbia- Registered foreign limited liability
company

·                  Florida- Registered foreign limited liability company

·                  Georgia- Certificate of Authority

·                  Idaho- Registered foreign limited liability company;
Collection Agency License

·                  Illinois- Registered foreign limited liability company

·                  Kentucky- Registered foreign limited liability company

·                  Louisiana- Registered foreign limited liability company

·                  Maryland- Registered foreign limited liability company

·                  Massachusetts- Registered foreign limited liability company

·                  Michigan- Registered foreign limited liability company

·                  Missouri- Registered foreign limited liability company

·                  Nevada- Registered foreign limited liability company;
Collection Agency License

·                  New Jersey- Registered foreign limited liability company;
Collection Agency Bond

·                  New York- Registered foreign limited liability company

·                  North Carolina- Registered foreign limited liability company

·                  North Dakota- Registered foreign limited liability company;
Money Broker License

·                  Ohio- Registered foreign limited liability company

·                  Oklahoma- Registered foreign limited liability company

·                  Oregon- Registered foreign limited liability company

·                  Pennsylvania- Registered foreign limited liability company

·                  Puerto Rico- Registered foreign limited liability company

·                  Rhode Island- Registered foreign limited liability company

·                  South Carolina- Registered foreign limited liability company

·                  South Dakota- Registered foreign limited liability company;
Mortgage Lender License

·                  Tennessee- Registered foreign limited liability company;
Collection Agency License

·                  Texas-  Registered foreign limited liability company

·                  Utah- Registered foreign limited liability company;
Collection Agency License

·                  Virginia- Registered foreign limited liability company

·                  Washington- Registered foreign limited liability company

·                  West Virginia- Registered foreign limited liability company;
Collection Agency License

·                  Wisconsin- Registered foreign limited liability company

 

K-1

--------------------------------------------------------------------------------

 

Exhibit L

 

Miscellaneous Fees and Charges

 

None

 

`

 

L-1

--------------------------------------------------------------------------------

 

Exhibit M

 

Form of Assignment and Assumption Agreement

 

Dated: as of [          , 20  ]

 

Reference is made to that certain Second Amended and Restated Warehousing Credit
and Security Agreement dated as of September 11, 2017, among Walker & Dunlop,
LLC, a Delaware limited liability company (“Borrower”), Lender and PNC Bank,
National Association, a national banking association (“Lender”) (as amended,
modified, restated and/or supplemented and in effect, the “Loan Agreement”). 
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Loan Agreement.

 

[·] (the “Assignor”) and [·] (the “Assignee”) agree as follows:

 

The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, $[·] of the Assignor’s Warehousing
Commitment and unpaid principal balance outstanding under the Assignor’s
Warehousing Note, representing [·] percent ([·]%) of the Warehousing Credit
Limit (such percentage, a “Commitment Percentage”) as of the Effective Date (as
hereinafter defined).

 

The Assignor (i) represents that as of the date hereof, its Commitment
Percentage (without giving effect to assignments thereof which have not yet
become effective) is [·]%, and the unpaid principal balance of the Loan
outstanding under the Warehousing Note held by the Assignor (unreduced by any
assignments thereof which have not yet become effective) is $[·]; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto, other than that the Assignor is the legal and
beneficial owner of the interest being assigned by it hereunder, that such
interest is free and clear of any adverse claim, and that it is legally
authorized to enter into this Assignment and Acceptance; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower, any Guarantor or any other person which may be
primarily or secondarily liable in respect of any of the Obligations or any of
their obligations, or the performance or observance by Borrower, any Guarantor
or any other person primarily or secondarily liable in respect of any of the
obligations under any of the Loan Documents or any other instrument or document
delivered or executed pursuant thereto; and (iv) attaches the Warehousing Note
delivered to it under the Loan Agreement and requests that Borrower exchange
such Warehousing Note for new Warehousing Notes payable to each of the Assignor
and the Assignee as follows:

 

Warehousing Note Payable to the Order of:

 

Amount of Note

 

[                       ]

 

$

[            ]

 

[                       ]

 

$

[            ]

 

 

The Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (ii) confirms that it has received a copy
of the Loan Documents,

 

M-1

--------------------------------------------------------------------------------

 

together with copies of the most recent financial statements delivered pursuant
to the Loan Agreement and such other documents and information as the Assignee
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (iii) confirms and represents that it has,
independently and without reliance upon the Assignor or any other Lender under
the Loan Agreement, and based on such documents and information as the Assignee
deems appropriate, made such Person’s own credit decision to join in the credit
facility contemplated by the Loan Documents and to become a Lender; (iv) agrees
that it will, independently and without reliance upon the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents; (v) appoints and authorizes Lender to take such
action as agent on its behalf and to exercise such powers as are expressly
delegated to or conferred upon Assignor by the terms of the Loan Documents
together with such other powers as are reasonably incidental thereto;
(vi) agrees that it will perform all the obligations which by the terms of the
Loan Documents are required to be performed by the Assignee as a Lender in
accordance with the terms of the Loan Documents; and (vii) specifies as its
address for notices the office set forth beneath its name on the signature
page hereof.

 

The effective date for this Assignment and Acceptance shall be [          ,
         ] (the “Effective Date”).  Following the execution of this Assignment
and Acceptance, it will be delivered to Assignor for acceptance.

 

Upon such acceptance, from and after the Effective Date (i) the Assignee shall
be a party to the Loan Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder, and
(ii) the Assignor shall, with respect to that portion of its interest under the
Loan Documents assigned hereunder relinquish its future rights and be released
from its future obligations under the Loan Documents but shall remain liable for
all obligations which arose prior to such assignment.

 

Upon such acceptance, from and after the Effective Date, Borrower shall make all
payments in respect of the rights and obligations assigned hereby (including
payments of principal, interest, fees and other amounts) to the Assignee.  The
Assignor and the Assignee shall make all appropriate adjustments in payments for
periods prior to the Effective Date by Borrower or with respect to the making of
this assignment directly between themselves.

 

THIS ASSIGNMENT AND ACCEPTANCE SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED,
APPLIED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

M-2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned has
caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.

 

 

“ASSIGNOR”

 

 

 

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

 

“ASSIGNEE”

 

 

 

 

 

 

 

 

By:

 

 

Title:

 

 

 

Notice Address of Assignee:

 

 

 

 

 

 

Attn:

 

 

 

 

 

Telephone No.:

 

 

Telecopier No.:

 

 

 

Wiring Instructions of Assignee:

 

 

 

 

Bank Name and address:

 

 

 

 

 

Routing No.:

 

Account Name:

 

Account No.:

 

M-3

--------------------------------------------------------------------------------

 

 

BORROWER’S CONSENT

 

If required under the Loan Agreement, Walker & Dunlop, LLC, a Delaware limited
liability company hereby approves the foregoing assignment.

 

 

WALKER & DUNLOP, LLC, a Delaware limited liability company

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

M-1

--------------------------------------------------------------------------------

 

Exhibit N-1

 

Form of Escrow and Bailee Letter

 

Date

 

Attn:

Closing Agent

XXXXXXXXXXXX

XXXXXXXXXXXX

 

Phone #: (xxx) xxxxxxx

Fax #: (xxx) xxxxxxx

 

RE:                          Mortgage Loan:

 

Dear                       :

 

Walker & Dunlop, LLC, a Delaware limited liability company, whose address is
7501 Wisconsin Avenue, Suite 1200, Bethesda, Maryland 20818 (the “Borrower”) has
advised PNC Bank, National Association (the “Lender”), that the Borrower has
appointed [name of Closing Agent firm], and [name of Closing Agent firm] has
agreed, by and through its undersigned employee, to serve as the closing agent
(the “Closing Agent”) and counsel relative to the origination and closing of the
mortgage loan to be made by the Borrower for the above-referenced property (the
“Mortgage Loan”).  Pursuant to a Second Amended and Restated Warehousing Credit
and Security Agreement by and between the Borrower and Lender (as same may be
amended from time to time, the “Credit Agreement”), Lender has agreed to provide
certain funding for the Mortgage Loan to you as the Closing Agent.  Terms used
in this letter and not defined herein have the meanings set forth in the Credit
Agreement.

 

To facilitate the closing of the Mortgage Loan (the “Closing”), you will confirm
to Lender on the date of the Closing that you are in possession of the original
mortgage note evidencing the Mortgage Loan.  As agent and bailee for Lender, you
agree to hold the original mortgage note evidencing the Mortgage Loan as bailee
for and on behalf of Lender, and to deliver the original mortgage note
evidencing the Mortgage Loan and the original Assignment of Mortgage Note and
Mortgage in blank to Lender by recognized overnight delivery promptly after
Closing, and in any event within two (2) Business Days.  Such delivery shall be
made to the address set forth below, unless otherwise directed by Lender.

 

PNC Bank, National Association

500 West Jefferson Street, Mailstop K1-KHDQ-04-6

Louisville, KY 40202

Attention:  Sherry Boston

 

Upon receipt of your confirmation that you are in possession of the original
mortgage note evidencing the Mortgage Loan, Lender will remit to you, by wire
transfer, immediately available funds in the approximate amount of $           
(the “Funds”), which you are to hold in trust for Lender until written or oral
instructions to disburse the funds are obtained from

 

Exhibit N-1-1

--------------------------------------------------------------------------------

 

the Borrower, at which time you may disburse the Funds in accordance with such
instructions.  Once you have received instructions from Lender to disburse the
Funds to close the Mortgage Loan, please advise Lender via e-mail at
REBWH@pnc.com of the fact of such disbursement immediately upon making such
disbursement.

 

Authorized representatives of Lender are listed in the attached Schedule A to
this letter.

 

If the Funds cannot be or are not disbursed for any reason on or before 4:30
p.m. Eastern Time on the date of Closing, you shall advise Lender immediately by
telephone that disbursement has not occurred and the Funds must be returned
immediately to Lender at the wiring instructions in the attached Schedule B to
this letter.

 

In the event you are not able for any reason to comply with the terms and
conditions set forth in this letter, you shall advise an authorized
representative of Lender immediately via e-mail at REBWH@pnc.com and comply with
any instructions given to you by such authorized representative.

 

Please acknowledge your receipt of this letter and your agreement to comply with
the terms and conditions set forth herein by signing below and returning this
letter to me via e-mail at REBWH@pnc.com.  Lender will not forward the Funds to
you until it receives a properly completed and signed copy of this letter.

 

 

Sincerely,

 

 

 

PNC Bank, National Association

 

 

 

 

 

By:

 

 

 

[Name]

 

 

[Title]

 

Exhibit N-1-2

--------------------------------------------------------------------------------

 

The undersigned Closing Agent acknowledges the terms of this letter and agrees
to comply with the terms and conditions set forth herein.  In addition, Closing
Agent agrees that, notwithstanding any contrary understanding with the Borrower
or the Borrower’s instructions to Closing Agent, these terms and conditions
shall control and may not be altered except by written or oral authorization
executed by Lender.

 

CLOSING AGENT:

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

Wire Transfer Instructions:

Bank:

 

 

City, State:

 

 

ABA #:

 

 

Account Name:

 

 

Account #:

 

 

Reference:

 

 

Attn:

 

 

 

 

Date:

 

 

 

Exhibit N-1-3

--------------------------------------------------------------------------------

 

SCHEDULE A

 

AUTHORIZED REPRESENTATIVES

 

 

 

Phone

 

E-Mail

Sherry Boston

 

(502) 581-2959

 

REBWH@pnc.com

Mark Ostrander

 

(502) 581-2289

 

REBWH@pnc.com

 

NOTE DELIVERY

 

Deliver Note to:

 

1)                                     via e-mail at REBWH@pnc.com

 

Original Note and Endorsement should be delivered by closing counsel to:

 

1)

 

PNC Bank, NA

500 West Jefferson Street, Mailstop K1-KHDQ-04-6

Louisville, KY  40202

Attention: Sherry Boston

 

Exhibit N-1-4

--------------------------------------------------------------------------------

 

SCHEDULE B

 

PNC NATIONAL ASSOCIATION

WIRE INSTRUCTIONS

 

Bank Name:

 

PNC Bank, National Association

 

 

 

City, State:

 

Pittsburgh, PA

 

 

 

ABA #:

 

043-000-096

 

 

 

Account Name:

 

Commercial Loan Operations

 

 

 

Account Number:

 

 

 

 

 

Attention:

 

Jessica Drummond

 

 

 

Phone Advice:

 

Phone: (412) 762-5622

 

 

 

RE:

 

Walker & Dunlop, LLC

 

Exhibit N-1-5

--------------------------------------------------------------------------------

 

Exhibit N-2

 

Form of Escrow Letter

 

Date

 

Attn:

Closing Agent

XXXXXXXXXXXX

XXXXXXXXXXXX

 

Phone #: (xxx) xxxxxxx

Fax #: (xxx) xxxxxxx

 

RE:                          Mortgage Loan:

 

Dear                       :

 

Walker & Dunlop, LLC, a Delaware limited liability company, whose address is
7501 Wisconsin Avenue, Suite 1200, Bethesda, Maryland 20818 (the “Borrower”) has
advised PNC Bank, National Association (the “Lender”), that the Borrower has
appointed [name of Closing Agent firm], and [name of Closing Agent firm] has
agreed, by and through its undersigned employee [if an agent of Title Company
add: (which employee is authorized pursuant to the attached insured closing
production letter)], to serve as the closing agent (the “Closing Agent”)
relative to the mortgage loan to be made by the Borrower for the
above-referenced property (the “Mortgage Loan”).  Pursuant to a Second Amended
and Restated Warehousing Credit and Security Agreement by and between the
Borrower and Lender (as same may be amended from time to time, the “Credit
Agreement”), Lender have agreed to provide certain funding for the Mortgage
Loan.  Terms used in this letter and not defined herein have the meanings set
forth in the Credit Agreement.

 

To facilitate the closing of the Mortgage Loan (the “Closing”), Lender will
remit to you, by wire transfer, immediately available funds in the approximate
amount of $            (the “Funds”), which you are to hold in trust for Lender
until written or oral instructions to disburse the funds are obtained from the
Borrower, at which time you may disburse the Funds in accordance with such
instructions.  Once you have received instructions from the Borrower to disburse
the Funds to close the Mortgage Loan, please advise an authorized representative
of Lender via e-mail at REBWH@pnc.com of the fact of such disbursement
immediately upon making such disbursement.

 

Authorized representatives of Lender are listed in the attached Schedule A to
this letter.

 

If the Funds cannot be or are not disbursed for any reason on or before 4:30
p.m. Eastern Time on the date of Closing, you shall advise Lender immediately by
telephone that disbursement has not occurred and the Funds must be returned
immediately to Lender at the wiring instructions in the attached Schedule B to
this letter.

 

Exhibit N-2-1

--------------------------------------------------------------------------------

 

In the event you are not able for any reason to comply with the terms and
conditions set forth in this letter, you shall advise an authorized
representative of Lender immediately via e-mail at REBWH@pnc.com and comply with
any instructions given to you by such authorized representative.

 

Please acknowledge your receipt of this letter and your agreement to comply with
the terms and conditions set forth herein by signing below and returning this
letter via e-mail at REBWH@pnc.com.  Lender will not forward the Funds to you
until it receives a properly completed and signed copy of this letter.

 

 

Sincerely,

 

 

 

PNC Bank, National Association

 

 

 

 

By:

 

 

 

[Name]

 

 

[Title]

 

The undersigned Closing Agent acknowledges the terms of this letter and agrees
to comply with the terms and conditions set forth herein.  In addition, Closing
Agent agrees that, notwithstanding any contrary understanding with the Borrower
or the Borrower’s instructions to Closing Agent, these terms and conditions
shall control and may not be altered except by written or oral authorization
executed by Lender.

 

CLOSING AGENT:

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

Wire Transfer Instructions:                      Bank:

City, State:

ABA #:

Account Name:

Account #:

Reference:

Attn:

Date:

 

Exhibit N-2-2

--------------------------------------------------------------------------------

 

SCHEDULE A

 

AUTHORIZED REPRESENTATIVES

 

 

 

Phone

 

E-Mail

Sherry Boston

 

(502) 581-2959

 

REBWH@pnc.com

Mark Ostrander

 

(502) 581-2289

 

REBWH@pnc.com

 

NOTE DELIVERY

 

Deliver Note to:

 

1)                                     via e-mail at REBWH@pnc.com

 

Original Note and Endorsement should be delivered by closing counsel to:

 

1)

 

PNC Bank, NA

500 West Jefferson Street, Mailstop K1-KHDQ-04-6

Louisville, KY  40202

Attention: Sherry Boston

 

Exhibit N-2-3

--------------------------------------------------------------------------------

 

SCHEDULE B

 

PNC NATIONAL ASSOCIATION
WIRE INSTRUCTIONS

 

Bank Name:

 

PNC Bank, National Association

 

 

 

City, State:

 

Pittsburgh, PA

 

 

 

ABA #:

 

043-000-096

 

 

 

Account Name:

 

Commercial Loan Operations

 

 

 

Account Number:

 

 

 

 

 

Attention:

 

Jessica Drummond

 

 

 

Phone Advice:

 

Phone: (412) 762-5622

 

 

 

RE:

 

Walker & Dunlop, LLC

 

Exhibit N-2-4

--------------------------------------------------------------------------------

 

Exhibit N-3

 

Form of Bailee Letter

 

Date

 

Attn:

XXXXXXXXXX

XXXXXXXXXXXX

XXXXXXXXXXXX

 

Phone #: (xxx) xxxxxxx

Fax #: (xxx) xxxxxxx

 

RE:                          Mortgage Loan:

 

Dear          :

 

Walker & Dunlop, LLC, a Delaware limited liability company, whose address is
7501 Wisconsin Avenue, Suite 1200, Bethesda, Maryland 20818 (the “Borrower”) has
advised PNC Bank, National Association (the “Lender”), that the Borrower has
appointed [name of Closing Agent firm], and [name of Closing Agent firm] has
agreed, by and through its undersigned employee, to serve as the closing agent
(the “Closing Agent”) and counsel relative to the origination and closing of the
mortgage loan to be made by the Borrower for the above-referenced property (the
“Mortgage Loan”).  Pursuant to a Second Amended and Restated Warehousing Credit
and Security Agreement by and between the Borrower and Lender (as same may be
amended from time to time, the “Credit Agreement”), Lender have agreed to
provide certain funding for the Mortgage Loan subject to the terms of this
letter.  Terms used in this letter and not defined herein have the meanings set
forth in the Credit Agreement.

 

To facilitate the closing of the Mortgage Loan (the “Closing”), you will confirm
to Lender on the date of the Closing that you are in possession of the original
mortgage note evidencing the Mortgage Loan.  As agent and bailee for Lender, you
agree to hold the original mortgage note evidencing the Mortgage Loan as bailee
for and on behalf of Lender, and to deliver the original mortgage note
evidencing the Mortgage Loan and the original Assignment of Mortgage Note and
Mortgage in blank to Lender by recognized overnight delivery promptly after
Closing, and in any event within two (2) Business Days.  Such delivery shall be
made to the address set forth below, unless otherwise directed by Lender.

 

PNC Bank, National Association

500 West Jefferson Street, Mailstop K1-KHDQ-04-6

Louisville, KY 40202

Attention:  Sherry Boston

 

Exhibit N-3-1

--------------------------------------------------------------------------------

 

Please acknowledge your receipt of this letter and your agreement to comply with
the terms and conditions set forth herein by signing below and returning this
letter via e-mail at REBWH@pnc.com.  Lender will not forward the funds necessary
to fund the Mortgage Loan until it receives a properly completed and signed copy
of this letter.

 

 

Sincerely,

 

 

 

PNC Bank, National Association

 

 

 

 

By:

 

 

 

[Name]

 

 

[Title]

 

Exhibit N-3-2

--------------------------------------------------------------------------------

 

The undersigned Closing Agent acknowledges the terms of this letter and agrees
to comply with the terms and conditions set forth herein.  In addition, Closing
Agent agrees that, notwithstanding any contrary understanding with the Borrower
or the Borrower’s instructions to Closing Agent, these terms and conditions
shall control and may not be altered except by written or oral authorization
executed by Lender.

 

CLOSING AGENT:

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

Date:

 

 

 

Exhibit N-3-3

--------------------------------------------------------------------------------

 

Exhibit O

 

Form of Loan Disbursement Authorization

 

Loan Disbursement Authorization

[g219401ki29i001.gif]

 

To:                             PNC Bank, National Association

 

Date:          , 201

ATTN: Loan Administrator Name

 

 

500 First Avenue, MS PF-PFSC-04-V

 

 

Pittsburgh PA 15219

 

 

 

RE:                          WALKER & DUNLOP, LLC

 

You are hereby authorized to make the following disbursements under our
$800,000,000.00 Committed Line of Credit for a total advance of
$                       .

 

XXX                              Credit the undersigned’s demand deposit account
with you, Account Number

 

                                  , in the amount of
$                                  .

 

XXX                              Wire transfer funds in the amount of
$                                   to:

 

 

 

 

 

 

 

Bank Name, City & State

 

ABA Transit Number

 

 

 

 

 

 

 

 

 

 

 

 

Account Title

 

Account Number

 

 

 

 

 

 

 

 

 

 

 

 

REF:

 

ATTN:

 

 

[Remainder of page intentionally left blank]

 

O-1

--------------------------------------------------------------------------------

 

The person signing below is authorized to make this request, and you are
entitled to rely conclusively on the above instructions to disburse loan
proceeds in the amount and manner specified.

 

 

WALKER & DUNLOP, LLC

 

a Delaware limited liability company

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

Form 8P – Multistate Rev 1/02

 

O-2

--------------------------------------------------------------------------------

 

Exhibit P

 

Form of Assignment of Mortgage

 

 

Project Name:

 

Project Location:

 

Project No.:

 

ASSIGNMENT OF MORTGAGE

 

FOR VALUE RECEIVED and for other good and valuable consideration, Walker &
Dunlop, LLC, a Delaware limited liability company (“Assignor”), hereby endorses,
assigns, transfers, grants, conveys and delivers to                 , its
successors and assigns (collectively, “Assignee”), all right, title and interest
of Assignor in and to:

 

1.                                      Mortgage given by Mortgagor in favor of
Assignor dated as of                  , 201  , and recorded of
                 , 200  , in the Public Records of              County,    
Official Records Book     , Page      (the “Mortgage”), which Mortgage secures
repayment of the Note and has been filed as a lien against the real property
described in attached Exhibit A;

 

2.                                      [Security Agreement dated as of
                 , 201  , by and between Assignor as secured party and Mortgagor
as debtor (the “Security Agreement”);] [If applicable]

 

3.                                      any and all other instruments or
documents, and all covenants, agreements, benefits, and rights under those
instruments or documents further evidencing or securing the indebtedness
evidenced by the Note and secured by the Mortgage.

 

This Assignment is made without recourse, and without representation or warranty
of any kind whatsoever, express or implied, except that Assignor hereby
represents and warrants to Assignee that as of the date of this Assignment,
Assignor is the holder of the Note and the mortgagee under the Mortgage, and has
the full power and authority to assign, transfer and sell the Note, the
Mortgage, [the Security Agreement] and the other loan documents.

 

[Remainder of page intentionally left blank]

 

P-1

--------------------------------------------------------------------------------

 

In witness whereof the Assignor has executed this Assignment as of          ,
20  .

 

 

ASSIGNOR:

 

 

 

WALKER & DUNLOP, LLC, a Delaware limited liability company

 

 

Witness:

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

P-2

--------------------------------------------------------------------------------

 

)

)

)

 

I hereby certify that on the      day of         , 20  , before me, an officer
duly authorized in the jurisdiction aforesaid to take acknowledgements, the
foregoing instrument was acknowledged before me by                 .  He/She is
personally known to me as the            of Walker & Dunlop, LLC, a Delaware
limited liability company.

 

 

 

 

Name:

 

 

Notary Public in and for the

 

 

[Seal]

 

My Commission Expires:

 

P-3

--------------------------------------------------------------------------------

 

Exhibit Q

 

[Intentionally Omitted]

 

Q-1

--------------------------------------------------------------------------------

 

Exhibit R

 

Form Amended and Restated Guaranty

 

R-1

--------------------------------------------------------------------------------

 

Second Amended and Restated Guaranty

and Suretyship Agreement

GRAPHIC [g219401ki31i001.jpg]

 

THIS AMENDED AND RESTATED GUARANTY AND SURETYSHIP AGREEMENT (this “Guaranty”) is
made and entered into as of this 11th day of September, 2017, by WALKER &
DUNLOP, INC., a Maryland corporation (the “Guarantor”), with an address at 7501
Wisconsin Avenue, Ste. 1200E, Bethesda, Maryland 20814, for the benefit of PNC
BANK, NATIONAL ASSOCIATION, as Lender (the “Lender”) with an address at 300
Fifth Avenue, PT-PTWR-15-1 Pittsburgh, PA 15222-2707, in consideration of the
extension of credit by Lender to WALKER & DUNLOP, LLC, a Delaware limited
liability company (the “Borrower”), and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.

 

WHEREAS, Guarantor previously executed and delivered to Agent that certain
Amended and Restated Guaranty and Suretyship Agreement, dated as of June 23,
2013 (the “Original Guaranty”), whereby Guarantor guaranteed the Borrower’s
payment and performance under that certain Amended and Restated Warehousing
Credit and Security Agreement, dated as of June 23, 2013, among Borrower,
Lender, Guarantor, and certain other parties, as the same has been amended from
time to time (the “Original Agreement”).  The Borrower, Guarantor and Lender
have contemporaneously herewith amended and restated the Original Agreement
pursuant to that certain Second Amended and Restated Warehousing Credit and
Security Agreement, of even date, among Borrower, Guarantor and Lender (the
Second Amended and Restated Warehouse Credit and Security Agreement, as the same
may be amended, renewed, extended, restated or otherwise modified is herein the
“Credit Agreement”).  In connection with the execution and delivery of the
Credit Agreement, Guarantor has agreed to guarantee the Borrower’s payment and
performance thereunder, and to amend and restate the terms of the Original
Guaranty pursuant to the terms hereof.

 

1.                                      Guaranty of Obligations.  The Guarantor
hereby unconditionally guarantees, as a primary obligor, and becomes surety for,
the prompt payment and performance of all loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to Lender arising under
or relating to the Credit Agreement (including any interest accruing thereon
after maturity, or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), and all costs and expenses of Lender incurred in
the documentation, negotiation, modification, enforcement, collection of the
Credit Agreement and otherwise in connection with any of the foregoing,
including reasonable attorneys’ fees and expenses (collectively, the
“Obligations”).  If the Borrower defaults under any such Obligations, the
Guarantor will pay the amount due to Lender.

 

2.                                      Nature of Guaranty; Waivers.  This is a
guaranty of payment and not of collection and Lender shall not be required or
obligated, as a condition of the Guarantor’s liability, to make any demand upon
or to pursue any of its rights against the Borrower, or to pursue any rights
which may be available to it with respect to any other person who may be liable
for the payment of the Obligations.

 

This is an absolute, unconditional, irrevocable and continuing guaranty and will
remain in full force and effect until all of the Obligations have been
indefeasibly paid in full, and Lender has terminated this Guaranty. This
Guaranty will remain in full force and effect even if there is no principal
balance outstanding under the Obligations at a particular time or from time to
time.  This Guaranty will not be affected by any surrender, exchange,
acceptance, compromise or release by Lender of any other party, or any other
guaranty or any security held by it for any of the Obligations, by any failure
of Lender to take

 

R-2

--------------------------------------------------------------------------------

 

any steps to perfect or maintain its lien or security interest in or to preserve
its rights to any security or other collateral for any of the Obligations or any
guaranty, or by any irregularity, unenforceability or invalidity of any of the
Obligations or any part thereof or any security or other guaranty thereof.  The
Guarantor’s obligations hereunder shall not be affected, modified or impaired by
any counterclaim, set-off, recoupment, deduction or defense based upon any claim
the Guarantor may have (directly or indirectly) against the Borrower or Lender,
except payment or performance of the Obligations.

 

Notice of acceptance of this Guaranty, notice of extensions of credit to the
Borrower from time to time, notice of default, diligence, presentment, notice of
dishonor, protest, demand for payment, and any defense based upon Lender’s
failure to comply with the notice requirements under Sections 9-611 and 9-612 of
the Uniform Commercial Code as in effect from time to time are hereby waived. 
The Guarantor waives all defenses based on suretyship or impairment of
collateral.

 

Lender at any time and from time to time, without notice to or the consent of
the Guarantor, and without impairing or releasing, discharging or modifying the
Guarantor’s liabilities hereunder, may (a) change the manner, place, time or
terms of payment or performance of or interest rates on, or other terms relating
to, any of the Obligations; (b) renew, substitute, modify, amend or alter, or
grant consents or waivers relating to any of the Obligations, any other
guaranties, or any security for any Obligations or guaranties; (c) apply any and
all payments by whomever paid or however realized including any proceeds of any
collateral, to any Obligations of the Borrower in such order, manner and amount
as Lender may determine in its sole discretion; (d) settle, compromise or deal
with any other person, including the Borrower or the Guarantor, with respect to
any Obligations in such manner as Lender deems appropriate in its sole
discretion; (e) substitute, exchange or release any security or guaranty; or
(f) take such actions and exercise such remedies hereunder as provided herein.

 

3.                                      Repayments or Recovery from Lender.  If
any demand is made at any time upon Lender for the repayment or recovery of any
amount received by it in payment or on account of any of the Obligations and if
Lender repays all or any part of such amount by reason of any judgment, decree
or order of any court or administrative body or by reason of any settlement or
compromise of any such demand, the Guarantor will be and remain liable hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never been received originally by Lender.  The provisions of this section will
be and remain effective notwithstanding any contrary action which may have been
taken by the Guarantor in reliance upon such payment, and any such contrary
action so taken will be without prejudice to Lender’s rights hereunder and will
be deemed to have been conditioned upon such payment having become final and
irrevocable.

 

4.                                      Financial Statements.  Unless compliance
is waived in writing by Lender or until all of the Obligations have been paid in
full, the Guarantor will promptly submit to Lender such information relating to
the Guarantor’s affairs (including but not limited to annual financial
statements and tax returns for the Guarantor) or any security for the Guaranty
as Lender may reasonably request.

 

5.                                      Enforceability of Obligations.  No
modification, limitation or discharge of the Obligations arising out of or by
virtue of any bankruptcy, reorganization or similar proceeding for relief of
debtors under federal or state law will affect, modify, limit or discharge the
Guarantor’s liability in any manner whatsoever and this Guaranty will remain and
continue in full force and effect and will be enforceable against the Guarantor
to the same extent and with the same force and effect as if any such proceeding
had not been instituted.  The Guarantor waives all rights and benefits which
might accrue to it by reason of any such proceeding and will be liable to the
full extent hereunder, irrespective of any modification, limitation or discharge
of the liability of the Borrower that may result from any such proceeding.

 

R-3

--------------------------------------------------------------------------------

 

6.                                      Events of Default.  The occurrence of
any of the following shall be an “Event of Default”: (i) any Event of Default
(as defined in the Credit Agreement); (ii) the Guarantor’s failure to perform
any of its obligations hereunder; (iii) the falsity, inaccuracy or material
breach by the Guarantor of any written warranty, representation or statement
made or furnished to Lender by or on behalf of the Guarantor; or (iv) the
termination or attempted termination of this Guaranty.  Upon the occurrence of
any Event of Default, (a) the Guarantor shall pay to Lender the amount of the
Obligations; or (b) on demand of Lender, the Guarantor shall immediately deposit
with Lender, in U.S. dollars, all amounts due or to become due under the
Obligations, and Lender may at any time use such funds to repay the Obligations;
or (c) Lender in its discretion may exercise with respect to any collateral any
one or more of the rights and remedies provided a secured party under the
applicable version of the Uniform Commercial Code; or (d) Lender in its
discretion may exercise from time to time any other rights and remedies
available to it at law, in equity or otherwise.

 

7.                                      Right of Setoff.  In addition to all
liens upon and rights of setoff against the Guarantor’s money, securities or
other property given to Lender by law, Lender and each of Lender shall have,
with respect to the Guarantor’s obligations to Lender and Lender under this
Guaranty and to the extent permitted by law, a contractual possessory security
interest in and a contractual right of setoff against, and the Guarantor hereby
grants Lender a security interest in, and hereby assigns, conveys, delivers,
pledges and transfers to Lender, all of the Guarantor’s right, title and
interest in and to, all of the Guarantor’s deposits, moneys, securities and
other property now or hereafter in the possession of or on deposit with, or in
transit to, Lender, whether held in a general or special account or deposit,
whether held jointly with someone else, or whether held for safekeeping or
otherwise.  Every such security interest and right of setoff may be exercised
without demand upon or notice to the Guarantor.  Every such right of setoff
shall be deemed to have been exercised immediately upon the occurrence of an
Event of Default hereunder without any action of Lender, although Lender may
enter such setoff on their books and records at a later time.

 

8.                                      Intentionally Omitted.

 

9.                                      Costs.  To the extent that Lender incurs
any costs or expenses in protecting or enforcing its rights under the
Obligations or this Guaranty, including reasonable attorneys’ fees and the costs
and expenses of litigation, such costs and expenses will be due on demand, will
be included in the Obligations and will bear interest from the incurring or
payment thereof at the Default Rate (as defined in any of the Obligations).

 

10.                               Postponement of Subrogation.  Until the
Obligations are indefeasibly paid in full, expire, are terminated and are not
subject to any right of revocation or rescission, the Guarantor postpones and
subordinates in favor of Lender or its designee (and any assignee or potential
assignee) any and all rights which the Guarantor may have to (a) assert any
claim whatsoever against the Borrower based on subrogation, exoneration,
reimbursement, or indemnity or any right of recourse to security for the
Obligations with respect to payments made hereunder, and (b) any realization on
any property of the Borrower, including participation in any marshalling of the
Borrower’s assets.

 

11.                               Notices.  All notices, demands, requests,
consents, approvals and other communications required or permitted hereunder
(“Notices”) must be in writing and will be effective upon receipt.  Notices may
be given in any manner to which Lender and the Guarantor may separately agree,
including electronic mail.  Without limiting the foregoing, first-class mail,
facsimile transmission and commercial courier service are hereby agreed to as
acceptable methods for giving Notices.  Regardless of the manner in which
provided, Notices may be sent to addresses for Lender and the Guarantor as set
forth above or to such other address as either may give to the other for such
purpose in accordance with this section.

 

R-4

--------------------------------------------------------------------------------

 

12.                               Preservation of Rights.  No delay or omission
on Lender’s part to exercise any right or power arising hereunder will impair
any such right or power or be considered a waiver of any such right or power,
nor will Lender’s action or inaction impair any such right or power.  Lender’s
rights and remedies hereunder are cumulative and not exclusive of any other
rights or remedies which Lender may have under other agreements, at law or in
equity.  Lender may proceed in any order against the Borrower, the Guarantor or
any other obligor of, or any collateral securing, the Obligations.

 

13.                               Illegality.  If any provision contained in
this Guaranty should be invalid, illegal or unenforceable in any respect, it
shall not affect or impair the validity, legality and enforceability of the
remaining provisions of this Guaranty.

 

14.                               Changes in Writing.  No modification,
amendment or waiver of, or consent to any departure by the Guarantor from, any
provision of this Guaranty will be effective unless made in a writing signed by
Lender, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  No notice to or demand on the
Guarantor will entitle the Guarantor to any other or further notice or demand in
the same, similar or other circumstance.

 

15.                               Entire Agreement.  This Guaranty (including
the documents and instruments referred to herein) constitutes the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, between the Guarantor and Lender with respect to the subject
matter hereof; provided, however, that this Guaranty is in addition to, and not
in substitution for, any other guarantees from the Guarantor to Lender.

 

16.                               Successors and Assigns.  This Guaranty will be
binding upon and inure to the benefit of the Guarantor and Lender and their
respective heirs, executors, administrators, successors and assigns; provided,
however, that the Guarantor may not assign this Guaranty in whole or in part
without Lender’s prior written consent and Lender at any time may assign this
Guaranty in whole or in part.

 

17.                               Interpretation.  In this Guaranty, unless
Lender and the Guarantor otherwise agree in writing, the singular includes the
plural and the plural the singular; references to statutes are to be construed
as including all statutory provisions consolidating, amending or replacing the
statute referred to; the word “or” shall be deemed to include “and/or”, the
words “including”, “includes” and “include” shall be deemed to be followed by
the words “without limitation”; and references to sections or exhibits are to
those of this Guaranty.  Section headings in this Guaranty are included for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose.  If this Guaranty is executed by more than one party as
Guarantor, the obligations of such persons or entities will be joint and
several.

 

18.                               Indemnity.  The Guarantor agrees to indemnify
each of Lender, Lender, each legal entity, if any, who controls, is controlled
by or is under common control with Lender and Lender and each of their
respective directors, officers and employees (the “Indemnified Parties”), and to
defend and hold each Indemnified Party harmless from and against, any and all
claims, damages, losses, liabilities and expenses (including all fees and
charges of internal or external counsel with whom any Indemnified Party may
consult and all expenses of litigation and preparation therefor) which any
Indemnified Party may incur or which may be asserted against any Indemnified
Party by any person, entity or governmental authority (including any person or
entity claiming derivatively on behalf of the Guarantor), in connection with or
arising out of or relating to the matters referred to in this Guaranty, whether
(a) arising from or incurred in connection with any breach of a representation,
warranty or covenant by the Guarantor, or (b) arising out of or resulting from
any suit, action, claim, proceeding or governmental investigation, pending or
threatened, whether based on statute, regulation or order, or tort, or contract
or otherwise, before any court or governmental authority; provided, however,
that the foregoing indemnity agreement shall not apply to any claims, damages,
losses, liabilities and expenses solely attributable to an Indemnified Party’s

 

R-5

--------------------------------------------------------------------------------

 

gross negligence or willful misconduct.  The indemnity agreement contained in
this Section shall survive the termination of this Guaranty and assignment of
any rights hereunder.  The Guarantor may participate at its expense in the
defense of any such claim.

 

19.                               Governing Law and Jurisdiction.  This Guaranty
has been delivered to and accepted by Lender and will be deemed to be made in
the State where Lender’s office indicated above is located.  THIS GUARANTY WILL
BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF LENDER AND THE GUARANTOR
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE LENDER’S OFFICE
INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES.  The Guarantor
hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where Lender’s office indicated
above is located; provided that nothing contained in this Guaranty will prevent
Lender from bringing any action, enforcing any award or judgment or exercising
any rights against the Guarantor individually, against any security or against
any property of the Guarantor within any other county, state or other foreign or
domestic jurisdiction.  The Guarantor acknowledges and agrees that the venue
provided above is the most convenient forum for both Lender and the Guarantor. 
The Guarantor waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Guaranty.

 

20.                               Equal Credit Opportunity Act.  If the
Guarantor is not an “applicant for credit” under Section 202.2 (e) of the Equal
Credit Opportunity Act of 1974 (“ECOA”), the Guarantor acknowledges that
(i) this Guaranty has been executed to provide credit support for the
Obligations, and (ii) the Guarantor was not required to execute this Guaranty in
violation of Section 202.7(d) of the ECOA.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

R-6

--------------------------------------------------------------------------------

 

23.                               WAIVER OF JURY TRIAL.  THE GUARANTOR
IRREVOCABLY WAIVES ANY AND ALL RIGHT THE GUARANTOR MAY HAVE TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE GUARANTOR ACKNOWLEDGES THAT THE
FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

The Guarantor acknowledges that it has read and understood all the provisions of
this Guaranty, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

 

WITNESS the due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.

 

WITNESS / ATTEST:

 

WALKER & DUNLOP, INC.,

 

 

a Maryland corporation

 

 

 

 

 

 

 

 

 

By:

 

(SEAL)

Print Name:

 

 

Print Name:

 

 

 

Title:

 

 

R-7

--------------------------------------------------------------------------------