Exhibit 10.13

 

FIRST AMENDMENT TO WAREHOUSING
CREDIT AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT (this
“Amendment”) is made as of March 25, 2013, by and among W&D INTERIM LENDER II
LLC (the “Borrower”), WALKER & DUNLOP, INC. (the “Guarantor”), BANK OF AMERICA,
N.A., as administrative agent (the “Administrative Agent”), and the lenders
party hereto (the “Lenders”).

 

R E C I T A L S

 

The Borrower, the Guarantor, the Administrative Agent, and the Lenders are
parties to, among other documents, instruments, and agreements, that certain
Warehousing Credit and Security Agreement dated as of October 5, 2012 (as the
same may be amended, supplemented, restated, amended and restated, renewed,
replaced, extended or otherwise modified, as the case may be, from time to time,
the “Loan Agreement”).

 

Capitalized terms used in this Amendment without definition have the meanings
specified therefor in the Loan Agreement.

 

The Borrower, the Guarantor, the Administrative Agent and the Lenders desire to
amend the Loan Agreement on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements of the parties set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.             Amendments.  Effective upon the Effective Date (as hereafter
defined), the Loan Agreement is hereby amended as follows:

 

(a)           Sections 3.3(f) and (g) of the Loan Agreement are hereby deleted
in their entirety and replaced with the following:

 

“(f)          If the Warehousing Advance Debt Service Coverage Ratio with
respect to any Pledged Loan is less than (i) if such Pledged Loan is secured by
a Multifamily Property, 1.2 to 1.0 as of any annual testing date for such
Pledged Loan, (ii) if such Pledged Loan is secured by an Independent Living
Facility, 1.4 to 1.0 as of any semi-annual testing date for such Pledged Loan,
or (iii) if such Pledged Loan is secured by an Eligible Assisted Living
Facility, 1.5 to 1.0 as of any semi-annual testing date for such Pledged Loan,
then Borrower shall prepay the related Warehousing Advance within ten
(10) Business Days after Notice from Administrative Agent by at least an amount
such that, if such prepayment had been made as of the applicable testing date,
the Warehousing Advance Debt Service Coverage Ratio with respect to such Pledged
Loan would have been in compliance with the applicable minimum ratios set forth
herein.”

 

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“(g)         If at any time the amount of any Warehousing Advance with respect
to any Eligible Loan exceeds the lesser of (i) (A) 60% as to a Multifamily
Property, (B) 53% as to an Independent Living Facility, or (C) 49% as to an
Eligible Assisted Living Facility, of the as is value of the underlying
Mortgaged Property with respect to such Eligible Loan (based upon a third party
MAI appraisal, reviewed and approved by the Administrative Agent and acceptable
to the Borrower), or (ii) (A) 75% as to a Pledged Loan secured by a Multifamily
Property, (B) 70% as to a Pledged Loan secured by an Independent Living
Facility, or (C) 65% as to a Pledged Loan secured by an Eligible Assisted 
Living Facility, of the Mortgage Note Amount advanced by the Borrower with
respect to the applicable Mortgage Loan, or (iii) (A) 90% of Cost as to a
Pledged Loan secured by a Multifamily Property, or (B) 75% of Cost as to a
Pledge Loan secured by a Qualified Seniors Facility, then Borrower shall have
thirty (30) Business Days after Notice from the Administrative Agent to pay to
the Administrative Agent a sum sufficient to cause the foregoing deficiency to
no longer exist.”

 

(b)           The following new Section 3.3(h) is hereby added to the Loan
Agreement immediately following Section 3.3(g):

 

“(h)         If the Underlying Debt Service Coverage Ratio with respect to any
Pledged Loan that is secured by a Qualified Seniors Facility is less than (i) if
such Pledged Loan is secured by an Independent Living Facility, 1.3 to 1.0 as of
any semi-annual testing date for such Pledged Loan, or (ii) if such Pledged Loan
is secured by an Eligible Assisted Living Facility, 1.4 to 1.0 as of any
semi-annual testing date for such Pledged Loan, then Borrower shall prepay the
related Warehousing Advance within ten (10) Business Days after Notice from
Administrative Agent by at least an amount such that, if such prepayment had
been made as of the applicable testing date, the Underlying Debt Service
Coverage Ratio with respect to such Pledged Loan would have been in compliance
with the applicable minimum ratios set forth herein.”

 

(c)           Section 8.3(d) is hereby amended by correcting the reference in
clause (iv) from “the Property Debt Service Coverage Ratio” to “the Property
NOI”.

 

(d)           Sections 11.1(v) through (aa), inclusive, are hereby deleted in
their entirety.  For the avoidance of doubt, such terms are duplicative of
corresponding requirements set forth in Exhibit E (including as amended pursuant
to this Amendment) and accordingly encompassed within the Borrower’s
representation and warranty set forth in Section 11.1(u) of the Loan Agreement.

 

(e)           Section 11.2(f) is hereby deleted in its entirety and replaced
with the following:

 

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“(f)          Within thirty (30) days after each applicable testing date set
forth in Section 11.3(d) and (e), deliver, or cause to be delivered by the
Servicer, (i) all detailed operating information with respect to the each
Mortgaged Property and the calculation of such Mortgaged Property’s Property NOI
as of such date on the applicable trailing basis, sufficient for Administrative
Agent to determine the Warehousing Debt Service Coverage Ratio and Underlying
Debt Service Coverage Ratio for the Mortgage Loan secured by such Mortgaged
Property, as applicable,  as of such testing date, and (ii) as applicable, a
detailed calculation of the twelve month pro forma debt service payments
required pursuant to the terms of the related Mortgage Loan.”

 

(f)            Section 11.3(d) is hereby deleted in its entirety and replaced
with the following:

 

“(d)         Permit the Warehousing Advance Debt Service Coverage Ratio for any
Mortgage Loan against which a Warehousing Advance is outstanding to be less than
(i) 1.2 to 1.0, if such Mortgage Loan is secured by a Multifamily Property,
(ii) 1.4 to 1.0, if such Mortgage Loan is secured by an Independent Living
Facility, and (iii) 1.5 to 1.0, if such Mortgage Loan is secured by an Eligible
Assisted Living Facility, in each case after giving effect to any retesting
after any prepayment of such Warehousing Advance pursuant to Section 3.3(f). 
The Warehousing Advance Debt Service Coverage Ratio shall be tested (A) in the
case of a Mortgage Loan secured by a Multifamily Property, commencing with the
first anniversary of the last day of the calendar month in which the related
Warehousing Advance was made and annually thereafter, and (B) in the case of a
Mortgage Loan secured by a Qualified Seniors Facility,  on the last day of the
sixth (6th) full calendar month following the Advance Date of the related
Warehousing Advance and on the last day of each six (6) calendar month period
thereafter.”

 

(g)           The following new Section 11.3(e) is hereby added to the Loan
Agreement immediately following Section 11.3(d):

 

“(e)         Permit the Underlying Debt Service Coverage Ratio for any Mortgage
Loan secured by a Qualified Seniors Facility against which a Warehousing Advance
is outstanding to be less than (i) 1.3 to 1.0, if such Mortgage Loan is secured
by an Independent Living Facility, and (ii) 1.4 to 1.0, if such Mortgage Loan is
secured by an Eligible Assisted Living Facility, in each case after giving
effect to any retesting after any prepayment of such Warehousing Advance
pursuant to Section 3.3(h).  The Underlying Debt Service Coverage Ratio for such
Mortgage Loans shall be tested on the last day of the sixth (6th) full calendar
month following the Advance Date of the related Warehousing Advance and on the
last day of each six (6) calendar month period thereafter.”

 

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(h)           Section 15 of the Loan Agreement is hereby amended as follows:

 

(i)            The definitions of the following terms are hereby deleted in
their entirety and replaced with the following:

 

“Applicable Margin” has the meaning set forth in the Fee Letter, as from time to
time may be amended, restated, supplemented or otherwise modified.”

 

“Sublimit” means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Commitment Amount) that is permitted to
be outstanding at any one time against a specific Eligible Loan or specific
category of Eligible Loans, as set forth in Exhibit E.

 

“Underlying Debt Service Coverage Ratio” means, as of any time of determination,
as to any Mortgage Loan, the ratio of (a) the then Property NOI of the related
Mortgaged Property, to (b) (i) if the Mortgage Loan is secured by a Multifamily
Property, the interest only debt service required to be paid in accordance with
the terms thereof, or (ii) if the Mortgage Loan is secured by a Qualified
Seniors Facility, the sum of the interest only debt service plus any principal
amortization payments required to be paid in accordance with the terms thereof
(excluding any balloon payment due at maturity), taking into account cash funded
interest reserves (as reflected in the closing settlement statement to be
furnished to the Administrative Agent) to the extent approved by the
Administrative Agent in its discretion, not to be unreasonably withheld.  For
the purposes of calculating Underlying Debt Service Coverage Ratio for all
purposes of the Loan Agreement, including Exhibit E, (A) as of the Advance Date
for any Warehousing Advance, the Property NOI shall be determined on a trailing
three month basis, annualized and normalized, and (B) as of any applicable
semi-annual testing date, the Property NOI shall be determined on a trailing six
month basis, annualized and normalized.  In all instances the debt service shall
be determined on a twelve (12) month pro forma basis, based on the actual
required debt service payments required pursuant to the applicable Mortgage Loan
loan documents, and shall take into account all budgeted advances to be made by
the Borrower in accordance with the terms thereof.

 

(i)            The definition of “Daily Floating LIBOR Rate” is hereby amended
by adding the following text immediately before the words “(“BBA LIBOR”)” where
appearing in the second line thereof, and deleting the words”(“BBA LIBOR”)”:

 

“or the successor thereto if the British Bankers Association is no longer making
a LIBOR rate available (in either case, for the purposes of this definition,
“BBA LIBOR”)”.

 

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(j)            The definition of “Property NOI” is hereby amended by deleting
the last sentence thereof in its entirety.

 

(k)           The definition of “Warehousing Advance Debt Service Coverage
Ratio”  is hereby amended by adding the following text at the end thereof:

 

“For the purposes of calculating Warehousing Advance Debt Service Coverage for
all purposes of the Loan Agreement, including Exhibit E, (A) as of the Advance
Date for any Warehousing Advance, the Property NOI shall be determined on a
trailing three month basis, annualized and normalized, (B) as of any applicable
semi-annual testing date, the Property NOI shall be determined on a trailing six
month basis, annualized and normalized, and (C) as of any applicable annual
testing date or in connection with a proposed extension of a Warehouse Period,
the Property NOI shall be determined on a trailing twelve month basis,
normalized.  In all instances the Testing Debt Service Amount shall be
determined on a twelve (12) month pro forma basis.”

 

(l)            The following new definitions are hereby added in the appropriate
alphabetical order:

 

“Alzheimer’s/Memory Care” means Alzheimer’s care, dementia care, and/or memory
care.

 

“Applicable Expected Permanent Loan Amount” means, as of any date of
determination, as to any Mortgaged Property securing a Pledged Loan, the
principal amount which the Borrower reasonably expects, based on its or the
Servicer’s underwriting and ongoing evaluation and analysis, for the permanent
Mortgage Loan under the Targeted Permanent Loan Program for such Mortgaged
Property.

 

“Applicable Targeted Permanent Loan Program”  means, as to a Mortgage Loan
proposed to be an Eligible Loan, the FHA, Fannie Mae, or Freddie Mac permanent
Mortgage Loan program for which such Mortgage Loan is targeted, as identified by
Borrower in the Credit Underwriting Documents delivered to the Administrative
Agent with the related Approval Request.

 

“Assisted Living Facility” means a residential facility, securing a Mortgage
Loan, which provides housing, meals, and one or more personal services (which
shall not include medical, nursing, dental, or mental health services, but may
include Alzheimer’s/Memory Care) for individuals with functional limitations and
which satisfies the definition and criteria of an “assisted living facility”
established by the Applicable Targeted Permanent Loan Program, including being
licensed as such under any applicable state or federal law.

 

“Change in Law” means the occurrence of any of the following: (a) the adoption
or taking effect of any law, rule, regulation or treaty, (b) any change in any
law, rule, regulation or treaty or in the administration, interpretation,
implementation

 

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or application thereof by any Governmental Authority or (c) the making or
issuance of any request, rule, guideline or directive (whether or not having the
force of law) by any Governmental Authority; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.

 

“Continuing Care Retirement Community” means a residential retirement facility,
securing a Mortgage Loan, designed to provide a continuum of care within a
single community or which otherwise is considered a “continuing care community,”
regardless of the actual term utilized, by FHA, Fannie Mae, Freddie Mac or any
applicable state or federal law.

 

“Eligible Assisted Living Facility” means an Assisted Living Facility in which
no more than 30% of the total units and beds are devoted to Alzheimer/Memory
Care, and from which no more than 30% of the income generated is for providing
Alzheimer’s/Memory Care.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the
date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), any
current or future regulations or official interpretations thereof and any
agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue
Code.

 

“Governmental Authority” means the government of the United States of America 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).

 

“Independent Living Facility” means a residential retirement facility, securing
a Mortgage Loan, offering optional services not related to personal care and
which satisfies the definition and criteria of an “independent living facility”
established by the Applicable Targeted Permanent Loan Program, including being
licensed as such under any applicable state or federal law.

 

“Qualified Seniors Facility” means (a) an Independent Living Facility, or (b) an
Eligible Assisted Living Facility.  In no event shall a Continuing Care
Retirement Community, Skilled Nursing Facility, or facility that provides
exclusively Alzheimer’s/Memory Care be a “Qualified Seniors Facility.”

 

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“Skilled Nursing Facility” means a facility, such as a nursing home, which
provides skilled nursing care and related services for patients who require
medical, nursing or rehabilitative services, including Alzheimer’s/Memory Care,
or which otherwise would be considered a “skilled nursing facility,” regardless
of the actual term utilized, by FHA, Fannie Mae, Freddie Mac or any applicable
state or federal law.

 

“Warehousing Advance-to-Targeted Principal Ratio” means, at any time of
determination, as to any Warehousing Advance and the related Pledged Loan, the
quotient, expressed as a percentage, of (a) the then outstanding principal
amount of such Warehousing Advance, divided by (b) the then Applicable Expected
Permanent Loan Amount.

 

(m)          Exhibit A of the Loan Agreement is hereby amended and restated in
its entirety in the form of Exhibit A attached hereto.

 

(n)           Exhibit B of the Loan Agreement is hereby amended and restated in
its entirety in the form of Exhibit B attached hereto.

 

(o)           Exhibit E of the Loan Agreement is hereby amended and restated in
its entirety in the form of Exhibit E attached hereto.

 

(p)           For all purposes of Sections 3.1(c) and 3.9 of the Loan Agreement:

 

(i)            References to “change in applicable law,”  “change in law,”
“change in any such law,” and words and phrases of similar import shall include
any Change in Law as such term is added to the Loan Agreement as provided in
this Amendment.

 

(ii)           References to any requirements of “law,” “applicable law” and
words and phrases of similar import shall include FATCA as such term is added to
the Loan Agreement as provided in this Amendment.

 

2.             Acknowledgments by Borrower.  The Borrower acknowledges, confirms
and agrees that:

 

(a)           This Amendment is a Loan Document.  All references in any Loan
Document to the Borrower’s Obligations shall include the Obligations as amended
by this Amendment.

 

(b)           Except as provided herein, the terms and conditions of the Loan
Agreement and the other Loan Documents remain in full force and effect, and the
Borrower hereby (x) ratifies, confirms and reaffirms all and singular of the
terms and conditions of the Loan Agreement and the other Loan Documents, and
(y) represents and warrants that:

 

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(i)            No Unmatured Default or Event of Default exists as of the date
the Borrower executes this Amendment, nor will an Unmatured Default or Event of
Default exist as of the Effective Date.

 

(ii)           The representations and warranties made by the Borrower in the
Loan Agreement and the other Loan Documents are true and correct as of the date
hereof, and will be true and correct as of the Effective Date, except as to
(A) matters which speak to a specific date, and (B) changes in the ordinary
course to the extent permitted and contemplated by the Loan Agreement.

 

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

 

(iv)          This Amendment has been duly executed and delivered by the
Borrower, and constitutes the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, subject
to the effect of applicable bankruptcy and other similar laws affecting the
rights of creditors generally and the effect of equitable principles whether
applied in an action at law or a suit in equity.

 

(c)           Nothing in this Amendment (including the Exhibits annexed hereto)
shall alter the discretionary nature of the making of Warehousing Advances as
set forth in the applicable provisions of the Loan Agreement.

 

(d)           The Borrower shall promptly pay upon receipt of an invoice or
statement therefor the reasonable attorneys’ fees and expenses and disbursements
incurred by the Administrative Agent and the Lenders in connection with this
Amendment and any prior matters involving the Loan.

 

(e)           The Borrower acknowledges, confirms and agrees that it does not
have any offsets, defenses, claims, counterclaims or causes of action of any
kind or nature against the Administrative Agent or any Lender with respect to
any of its liabilities and obligations to the Administrative Agent or any
Lender, and, in any event, the Borrower specifically waives, releases, and
forever relinquishes all claims, demands, obligations, liabilities, and causes
of action of whatever kind or nature, whether known or unknown, which it has or
may have, from the beginning of the world to both the date hereof and the
Effective Date, against the Administrative Agent, or any Lender or their
respective current or former affiliates, officers, directors, employees, agents,
attorneys, independent contractors, and predecessors, together with their
successors and assigns, directly or indirectly arising out of or based upon any
matter related to the Loan, the Obligations, the Loan Agreement, any other Loan
Documents, or the administration thereof.

 

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3.             Acknowledgements and Agreements of the Guarantor.

 

(a)           The Guarantor hereby ratifies and confirms all of the terms and
conditions of the Guaranty, the Pledge Agreement, and the Loan Agreement, and
represents and warrants that (i) the representations and warranties made or
deemed made by the Guarantor in the Loan Documents are true and correct in all
material respects as of the date hereof, except as to matters which speak to a
specific date and for changes in the ordinary course to the extent permitted and
contemplated by the Loan Documents, and (ii) no event has occurred or failed to
occur, which occurrence or which failure to occur constitutes, or solely with
the passage of time or the giving of notice (or both) would constitute, an
Unmatured Default or an Event of Default.

 

(b)           Without limiting the foregoing, the Guarantor (i) reaffirms, and
confirms its guaranty of all of the Guaranteed Obligations (as defined in the
Guaranty) as of the date hereof and as previously, and as hereafter from time to
time may be, increased, reduced, modified, extended, renewed, amended,
supplemented or restated, and notwithstanding the release of any collateral
therefor or of any other Person liable for any or all of the Guaranteed
Obligations, whether or not the Guarantor executes a confirmation of the
applicable Loan Documents in connection therewith, and (ii) agrees that neither
the execution of this Amendment, nor the performance or consummation of any of
the transactions contemplated hereby, shall in any way limit, restrict, qualify,
or extinguish the Guarantor’s liability under the terms of the applicable Loan
Documents.

 

(c)           The Guarantor acknowledges, confirms and agrees that it does not
have any offsets, defenses, claims, counterclaims or causes of action of any
kind or nature against the Administrative Agent or any Lender with respect to
any of its liabilities and obligations to the Administrative Agent or any
Lender, and, in any event, the Guarantor specifically waives, releases, and
forever relinquishes all claims, demands, obligations, liabilities, and causes
of action of whatever kind or nature, whether known or unknown, which it has or
may have, from the beginning of the world to both the date hereof and the
Effective Date, against the Administrative Agent, or any Lender or their
respective current or former affiliates, officers, directors, employees, agents,
attorneys, independent contractors, and predecessors, together with their
successors and assigns, directly or indirectly arising out of or based upon any
matter related to the Loan, the Obligations, the Loan Agreement, any other Loan
Documents, or the administration thereof.

 

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

 

4.             Conditions Precedent.  This Amendment shall be effective upon the
satisfaction by the Borrower of, or written waiver by the Administrative Agent
and the Lenders of, the following conditions, and any other conditions set forth
in this Amendment, by no later than 4:00 p.m. (Boston time) on the date of this
Amendment, as such time and date may be extended in writing by the
Administrative Agent and the Lenders, in their sole discretion (with the date,
if at all, by which such conditions have been satisfied or waived being referred
to herein as, the

 

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“Effective Date”), failing which this Amendment and all related documents shall
be null and void at the option of the Administrative Agent and the Lenders:

 

(a)           Delivery by the Borrower to the Administrative Agent and each
Lender of the following:

 

(i)            This Amendment, duly executed by the Borrower, the Guarantor, the
Administrative Agent and each Lender.

 

(ii)           An amendment to the Fee Letter, duly executed by the Borrower,
the Guarantor, the Administrative Agent and each Lender, to be in form and
substance satisfactory to each party thereto.

 

(iii)          Such certificates of resolutions or other actions, incumbency
certificates and/or other certificates of an authorized officer of the Borrower
and the Guarantor as the Administrative Agent may require evidencing (A) the
authority of the Borrower and the Guarantor to enter into this Amendment and any
other documents to be executed and delivered in connection herewith, and (B) the
identity, authority and capacity of each officer of the Borrower and the
Guarantor authorized to act on its behalf in connection with this Amendment and
the other Loan Documents.

 

(iv)          Such other documents as the Administrative Agent or any Lender
reasonably may require, duly executed and delivered.

 

(b)           No Unmatured Default or Event of Default shall have occurred and
be continuing, or will be caused by or result from the Borrower’s execution and
delivery of this Amendment and the documents, instruments, and agreements
related hereto, or the performance by the Borrower of its obligations
thereunder.

 

(c)           The representations and warranties of the Borrower and the
Guarantor contained in this Amendment or in any document, instrument, or
agreement delivered or to be delivered in connection with this Amendment
(i) shall have been true and correct in all material respects on the date that
such representations and warranties were made (except for those which expressly
relate to an earlier date, which shall be true and correct as of such earlier
date) and (ii) shall be true and correct in all material respects on the
Effective Date as if made on and as of such date (except for those which
expressly relate to an earlier date, which shall be true and correct as of such
earlier date).

 

(d)           In addition to all other expense payment and reimbursement
obligations of the Borrower under the Loan Agreement and other Loan Documents,
the Borrower will, promptly following their receipt of an appropriate invoice
therefor, pay or reimburse the Administrative Agent and each Lender for all of
their respective reasonable out of pocket costs and expenses (including, without
limitation, reasonable attorneys’ fees and expenses and disbursements) incurred 
in connection with the preparation of this Amendment and any other documents in
connection herewith and the matters addressed in and contemplated by, this
Amendment.

 

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5.             Miscellaneous.

 

(a)           This Amendment shall be governed in accordance with the internal
laws of the Commonwealth of Massachusetts (without regard to conflict of laws
principles) as an instrument under seal.

 

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

 

(c)           This Amendment constitutes the complete agreement among the
Borrower, the Guarantor, the Administrative Agent, and the Lenders with respect
to the subject matter of this Amendment and supersedes all prior agreements and
understanding relating to the subject matter of this Amendment, and may not be
modified, altered, or amended except in accordance with the Loan Agreement.

 

(d)           Time is of the essence with respect to all aspects of this
Amendment.

 

[Remainder of page intentionally left blank]

 

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Executed as a sealed instrument as of the date first above written.

 

 

 

W&D INTERIM LENDER II LLC

 

 

 

 

By:

/s/ Deborah A. Wilson

 

Name:

Deborah A. Wilson

 

Title:

EVP, CFO & Treasurer

 

 

 

 

 

 

 

WALKER & DUNLOP, INC.

 

 

 

 

By:

/s/ Deborah A. Wilson

 

Name:

Deborah A. Wilson

 

Title:

EVP, CFO & Treasurer

 

 

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent and a Lender

 

 

 

 

 

 

 

By:

/s/ Jane E. Huntington

 

Name:

Jane E. Huntington

 

Title:

Senior Vice President

 

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EXHIBIT A

 

FORM OF APPROVAL REQUEST

 

 

Date of Approval Request:  

 

 

To:

Bank of America, N.A.

 

225 Franklin Street

 

Mail stop: MA1-225-02-04, 2nd Floor

 

Boston, Massachusetts 02110

 

Attention: Jane E. Huntington, Senior Vice President

 

Re:          Proposed Warehousing Advance for a SELECT ONE WHEN COMPLETING
FORM:[Multifamilty Property][Independent Living Facility][Eligible Assisted
Living Facility [with Alzheimer’s/Memory Care][without  Alzheimer’s/Memory
Care]]

 

Reference is made to that certain Warehousing Credit and Security Agreement
dated October 5, 2012 (as amended, restated, modified or supplemented from time
to time, the “Agreement”) among W&D Interim Lender II LLC (the “Borrower”), Bank
of America, N.A., as administrative agent (“Administrative Agent”) for itself
and various lenders (the “Lenders”), and such Lenders.  Unless otherwise defined
herein, all capitalized terms used herein shall have the meanings specified
therefor in the Agreement.

 

The undersigned, being an Authorized Representative of Borrower, submits to
Administrative Agent, in accordance with the provisions of Section 2.1(a) of the
Agreement, this Approval Request with respect to the Mortgage Loan proposed to
be financed by Borrower as described in Schedule 1 [USE THE FORM OF SCHEDULE 1
APPLICABLE TO TYPE OF FACILITY] annexed hereto and incorporated by reference
herein.

 

Borrower hereby certifies, warrants and represents to Administrative Agent and
Lenders as follows:

 

1.             Accompanying this Approval Request are the Credit Underwriting
Documents listed on Schedule 2 annexed hereto and incorporated by reference
herein.  The following Credit Underwriting Documents are not yet available or
are not complete, and the date of anticipated availability and/or completion, is
as set forth below:

 

Missing/Incomplete Items

 

Availability/Completion Date

 

 

 

 

 

 

 

 

 

 

2.             Schedule 3 annexed hereto and incorporated by reference herein
sets forth all of the Collateral Documents being obtained by Borrower in
connection with the subject Mortgage Loan.

 

2

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

 

3.             Except as specifically noted, all documentation and information
provided to Administrative Agent in connection with this Approval Request is
complete and accurate in all material respects, and complies with all applicable
provisions of the Agreement.

 

4.             There has been no material adverse change in Borrower’s or
Guarantor’s financial condition from the most recent financial information
furnished to Administrative Agent pursuant to the Agreement.

 

5.             No Unmatured Defaults or Events of Defaults have occurred which
have not been waived in writing by the Administrative Agent.

 

6.             Each representation and warranty made or deemed made by Borrower
and Guarantor, respectively, in the Agreement and other Loan Documents is true
and complete in all material respects at and as of the date hereof (except for
those which expressly relate to an earlier date which shall be true and correct
as of such earlier date).

 

EXECUTED as of the date first above written.

 

 

W&D INTERIM LENDER II LLC

 

By:

 

 

Name:

 

 

Title:

 

 

3

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

 

SCHEDULE 1

 

[TO BE USED FOR MULTIFAMILY PROPERTIES]

 

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

 

Approval Request

 

 

Project Borrower

 

Project/Sponsor Name

 

Borrower Contact info.

 

Project Address

 

Project completion date

 

Ownership or management interest in the Mortgaged Property by Borrower or any
Affiliate?(1)

 

Borrower maximum loan amount (may not exceed $35,000,000)

 

Is there proposed any repairs, renovation, or rehabilitation at the Mortgaged
Property?

 

Construction Escrow Holdback

 

Underwritten FHA, Fannie Mae or Freddie Mac Permanent Loan Amount

 

Requested Warehousing Advance Amount(2)

 

Anticipated Warehousing Advance date

 

Borrower Loan Initial Maturity

 

Borrower Loan Extended Maturity

 

 

Warehousing Advance Request Review:

 

Item

 

Guideline

 

Actual /
Comment

 

Complies
(Y or N)

Applicable Targeted Permanent Loan Program

 

Must be Fannie Mae, Freddie Mac, or FHA

 

 

 

 

 

 

 

 

 

 

 

Warehousing Advance Amount

 

The lesser of (i) 60% of the asset’s as is value based upon a third party MAI
appraisal, and (ii) 75% of Mortgage Note Amount advanced by Borrower under the
applicable Mortgage Loan.

 

Warehousing Advance DSC (using BofA Testing Debt Service Amount) > 1.2x

 

 

 

 

 

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

(1)  Requires approval of Administrative Agent.

(2) A Warehousing Advance Request must be delivered to Administrative Agent in
accordance with Section 2.1(b) of the Agreement.

 

1

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

 

Borrower Loan Amount

 

Underlying DSC > 1.0x

 

Lesser of as-is LTV < 80%, or LTC < 90%

 

Maximum loan amount $35MM

 

 

 

 

 

 

 

 

 

 

 

Pro forma Property NOI

 

Must be sufficient for Applicable Targeted Permanent Loan Program

 

 

 

 

 

 

 

 

 

 

 

Amount of Borrower Loan designated for Property rehab(3)

 

Budgeted and actual must be < 15% of Cost

 

 

 

 

 

 

 

 

 

 

 

Subordinate Financing/Mezz Financing

 

Not Permitted

 

N/A

 

N/A

 

 

 

 

 

 

 

Appraisal Report

 

Required

 

Appraisal Dated:

 

 

 

 

 

Environmental Report

 

Required

 

ESA Dated:

 

 

 

 

 

Property Condition Report

 

Required

 

PCR Dated:

 

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

(3)  If any portion of the improvements to the Mortgaged Property is designated
for repairs, renovation, or rehabilitation the details thereof are set forth in
and a budget is included with the related Credit Underwriting Documents.

 

2

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

 

SCHEDULE 1

 

[TO BE USED FOR INDEPENDENT LIVING FACILITIES]

 

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

 

Approval Request

 

Project Borrower

 

Project / Sponsor Name

 

Borrower Contact info.

 

Project Address

 

Project completion date

 

 

Ownership or management interest in the Mortgaged Property by Borrower or any
Affiliate?(1)

 

Borrower maximum loan amount (may not exceed $15,000,000)

 

Is there proposed any repairs, renovation, or rehabilitation at the Mortgaged
Property?

 

Construction Escrow Holdback

 

Underwritten FHA, Fannie Mae or Freddie Mac Permanent Loan Amount

 

Requested Warehousing Advance Amount(2)

 

Anticipated Warehousing Advance date

 

Borrower Loan Initial Maturity

 

Borrower Loan Extended Maturity

 

 

Warehousing Advance Request Review:

 

Item

 

Guideline

 

Actual /
Comment

 

Complies
(Y or N)

Applicable Targeted Permanent Loan Program

 

Must be Fannie Mae, Freddie Mac, or FHA

 

 

 

 

 

 

 

 

 

 

 

Warehousing Advance Amount

 

The lesser of (i) 53% of the asset’s as is value based upon a third party MAI
appraisal, and (ii) 70% of Mortgage Note Amount advanced by Borrower under the
applicable Mortgage Loan.

 

Warehousing Advance DSC (using BofA Testing Debt Service Amount) > 1.4x

 

 

 

 

 

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

(1)  Requires approval of Administrative Agent.

(2) A Warehousing Advance Request must be delivered to Administrative Agent in
accordance with Section 2.1(b) of the Agreement.

 

 

1

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

 

Borrower Loan Amount

 

Underlying DSC > 1.3x

 

Lesser of as-is LTV < 75%, or LTC < 75%

 

Maximum loan amount $15MM

 

 

 

 

 

 

 

 

 

 

 

Pro forma Property NOI

 

Must be sufficient for Applicable Targeted Permanent Loan Program

 

 

 

 

 

 

 

 

 

 

 

Amount of Borrower Loan designated for Property rehab(1)

 

Budgeted and actual must be < 15% of Cost

 

 

 

 

 

 

 

 

 

 

 

Subordinate Financing/Mezz Financing

 

Not Permitted

 

N/A

 

N/A

 

 

 

 

 

 

 

Appraisal Report

 

Required

 

Appraisal Dated:

 

 

 

 

 

Environmental Report

 

Required

 

ESA Dated:

 

 

 

 

 

Property Condition Report

 

Required

 

PCR Dated:

 

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

(1)  If any portion of the improvements to the Mortgaged Property is designated
for repairs, renovation, or rehabilitation the details thereof are set forth in
and a budget is included with the related Credit Underwriting Documents.

 

2

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

 

SCHEDULE 1

 

[TO BE USED FOR ASSISTED LIVING FACILITIES]

 

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

 

Approval Request

 

Project Borrower

 

Project / Sponsor Name

 

Borrower Contact info.

 

Project Address

 

Project completion date

 

Ownership or management interest in the Mortgaged Property by Borrower or any
Affiliate?(1)

 

Borrower maximum loan amount (may not exceed $15,000,000)

 

Is there proposed any repairs, renovation, or rehabilitation at the Mortgaged
Property?

 

Construction Escrow Holdback

 

Underwritten FHA, Fannie Mae or Freddie Mac Permanent Loan Amount

 

Requested Warehousing Advance Amount(2)

 

Anticipated Warehousing Advance date

 

Borrower Loan Initial Maturity

 

Borrower Loan Extended Maturity

 

Is Alzheimer’s/Memory Care provided [Yes or No]

 

 

Warehousing Advance Request Review:

 

Item

 

Guideline

 

Actual /
Comment

 

Complies
(Y or N)

Applicable Targeted Permanent Loan Program

 

Must be Fannie Mae, Freddie Mac, or FHA

 

 

 

 

 

 

 

 

 

 

 

If Alzheimer’s/Memory Care is provided

 

No. of units/beds in facility may not exceed 30% of total

 

Income from Applicable Targeted Permanent Loan Program may not exceed 30% of
total

 

 

 

 

 

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

(1)  Requires approval of Administrative Agent.

(2) A Warehousing Advance Request must be delivered to Administrative Agent in
accordance with Section 2.1(b) of the Agreement.

 

1

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

 

Warehousing Advance Amount

 

The lesser of (i) 49% of the asset’s as is value based upon a third party MAI
appraisal, and (ii) 65% of Mortgage Note Amount advanced by Borrower under the
applicable Mortgage Loan. Warehousing Advance DSC (using BofA Testing Debt
Service Amount) > 1.5x

 

 

 

 

 

 

 

 

 

 

 

Borrower Loan Amount

 

Underlying DSC > 1.4x

 

Lesser of as-is LTV < 75%, or LTC < 75%

 

Maximum loan amount $15MM

 

 

 

 

 

 

 

 

 

 

 

Pro forma Property NOI

 

Must be sufficient for Applicable Targeted Permanent Loan Program

 

 

 

 

 

 

 

 

 

 

 

Amount of Borrower Loan designated for Property rehab(1)

 

Budgeted and actual must be < 15% of Cost

 

 

 

 

 

 

 

 

 

 

 

Subordinate Financing/Mezz Financing

 

Not Permitted

 

N/A

 

N/A

 

 

 

 

 

 

 

Appraisal Report

 

Required

 

Appraisal Dated:

 

 

 

 

 

Environmental Report

 

Required

 

ESA Dated:

 

 

 

 

 

Property Condition Report

 

Required

 

PCR Dated:

 

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

(1) If any portion of the improvements to the Mortgaged Property is designated
for repairs, renovation, or rehabilitation the details thereof are set forth in
and a budget is included with the related Credit Underwriting Documents.

 

2

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

 

SCHEDULE 2

 

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

 

Credit Underwriting Documents Furnished with Approval Request

 

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

 

SCHEDULE 3

 

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

 

Collateral Documents to be obtained by Borrower

 

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

 

EXHIBIT B

 

FORM OF WAREHOUSING ADVANCE REQUEST AGAINST ELIGIBLE LOANS

 

ELIGIBLE LOAN TYPE:

Check one:

 

o Multifamily Property

 

o Independent Living Facility

 

o Eligible Assisted Living Facility

 

 

ELIGIBLE LOAN COLLATERAL TYPE:

MUST BE FIRST MORTGAGE LOAN

 

 

Project Name:

 

 

Project State and Zip Code:

 

 

 

 

 

Mortgage Note Amount: $

 

 

Mortgage Note Date:

 

 

Mortgage Note Maturity Date:

 

 

 

 

 

Approved Warehousing Advance Amount: $

 

 

 

 

 

Warehousing Advance Date:

 

 

Warehouse Period Expiration Date:

 

 

 

 

 

Title Company/Closing Agent:

 

 

Title Contact Person:

 

 Phone No.:

 

Title Contact Person E-Mail Address:

 

 

 

Title Company Address:

 

 

 

 

 

 

 

WIRE TRANSFER INFORMATION

 

 

 

 

Wire Amount:

 

  Date of Wire:

 

Receiving Bank:

 

  ABA No.:

 

City & State:

 

 

 

Credit Account Name:

 

  Number:

 

Advise:

 

  Phone:

 

 

W&D Interim Lender II LLC (the “Borrower”) has granted, and hereby reaffirms the
grant of, a security interest to Bank of America, N.A., as administrative agent
(“Administrative Agent”) for itself and various lenders (the “Lenders”) in all
of Borrower’s right, title and interest in and to the Mortgage Loan described
above and all related Collateral pursuant to Article 4 of the Warehousing Credit
and Security Agreement dated as of October 5, 2012, among Borrower,

 

1

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

 

Administrative Agent and Lenders (as amended, restated, modified or supplemented
from time to time, “Agreement”).  Capitalized terms used in this Warehousing
Advance Request without further definition have the meanings set forth in the
Agreement.

 

Borrower hereby represents and warrants as follows:

 

(a)                                 The Warehousing Advance requested hereby
complies with all applicable requirements of the Agreement.

 

(b)                                 Each representation and warranty made under
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 Unmatured Default or Event of Default
has occurred which has not been waived in its entirety by the Administrative
Agent, 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 Unmatured Default or Event of Default will have occurred
which has not been waived in its entirety by the Administrative Agent 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 required by the Agreement, including
Exhibit C, to be delivered to the Administrative Agent by no later than when
required pursuant to the applicable provisions of the Agreement, including
Exhibit C.

 

(e)                                  The Credit Underwriting Documents delivered
to the Administrative Agent with respect to the Warehousing Advance contemplated
herein, and approved by the Administrative Agent, are complete and correct as of
the date hereof.

 

IN WITNESS WHEREOF, the undersigned has executed this Warehousing Advance
Request as a document under seal as of                                 , 201 .

 

AUTHORIZED SIGNATURE

 

 

 

 

 

 

 

 

 

By

 

 

Print Name:

 

 

Title:

 

 

 

2

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

 

EXHIBIT E

 

WAREHOUSING CREDIT AND SECURITY AGREEMENT ELIGIBLE LOANS

 

A.                                    LIMITATIONS ON WAREHOUSING ADVANCES
AGAINST MORTGAGE LOANS

 

Lenders’ obligation to consider making Warehousing Advances under the Agreement
is subject to all requirements of the Agreement and to the following additional
limitations:

 

1.                                      No Warehousing Advance will be made
against any Mortgage Loan that has been previously sold or pledged to obtain
financing (whether or not such financing constitutes Indebtedness) under another
warehousing financing arrangement.

 

2.                                      No Warehousing Advance will be made
against any Mortgage Loan that Administrative Agent or any Lender believes may
be based on untrue, incomplete, inaccurate or fraudulent information or may
otherwise be subject to fraud.

 

3.                                      No Warehousing Advance will be made
against any Mortgage Loan if any of the limitations set forth in this Exhibit E
would be exceeded after giving effect to the Warehousing Advance.

 

4.                                      No Warehousing Advance will be made
against a Mortgage Loan originated by a Person other than Borrower.

 

5.                                      No Warehousing Advance will be made
against a Mortgage Loan if the applicable Advance Rate or Sublimit would be
exceeded.

 

6.                                      No “cash out” Mortgage Loans shall be
Eligible Loans.

 

7.                                      As of the date of the closing of the
Mortgage Loan and as of the applicable Advance Date, the pro forma Property NOI
of the Mortgaged Property as of the maturity date of such Mortgage Loan (as set
forth in projections to be provided by Borrower to Administrative Agent with the
related Approval Request) must be sufficient to qualify for the Applicable
Targeted Permanent Loan (as identified in the related Approval Request).

 

B.                                    ELIGIBLE LOANS AND TERMS OF WAREHOUSING
ADVANCES

 

Subject to compliance with the terms and limitations set forth below, and all
applicable terms, conditions, representations and warranties, and covenants in
the Agreement, (1) Mortgage Loans which satisfy the following criteria shall be
eligible to be included as Eligible Loans for purposes of the Agreement, and (2)
any such Mortgage Loans which are accepted by the Administrative Agent and
Lenders as Eligible Loans shall be subject to the following terms and
conditions:

 

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

 

Multifamily Properties

 

(1)                                
                                                Mortgage Loan type: An interim
First Mortgage Loan secured by a Multifamily Property to (i) refinance an
existing third party Mortgage Loan secured by such Multifamily Property, or (ii)
finance the acquisition of such Multifamily Property, in either case possibly to
include funds for minor repairs and rehabilitation (subject to the limitations
set forth in this Exhibit and the Agreement).

 

(2)                                
                                                Repairs and rehabilitation:  May
not exceed 15% of Cost.

 

(3)                                
                                                Subordinate Mortgage Loans or
mezzanine debt: Not Permitted.

 

(4)                                
                                                Sublimit: 100% of the Total
Commitment Amount.

 

(5)                                
                                                Maximum amount of Mortgage
Loan:  $35,000,000.

 

(6)                                
                                                Advance Rate: The lesser of (i)
60% of the as is value of the Mortgaged Property with respect to the particular
Mortgage Loan based upon a third party MAI appraisal, reviewed and approved by
the Administrative Agent, and (ii) 75% of the Mortgage Note Amount advanced by
the Borrower with respect to the applicable Mortgage Loan.

 

(7)                                
                                                Warehousing Advance Debt Service
Coverage Ratio: As of the date of the closing of the Mortgage Loan and as of the
applicable Advance Date, the Warehousing Advance Debt Service Coverage Ratio
must be at least 1.20 to 1.00.

 

(8)                                
                                                Maximum Underlying Loan-to-Value
Ratio and Loan-to-Cost Ratio: The Underlying Loan-to-Value Ratio may not exceed
80%, and the Loan-to-Cost Ratio may not exceed 90%.

 

(9)                                
                                                Underlying Debt Service Coverage
Ratio: As of the date of the closing of the Mortgage Loan and as of the
applicable Advance Date, the Underlying Debt Service Coverage Ratio must be at
least 1.00 to 1.00.

 

(10)                                                                         
Warehouse Period: Unless extended as provided below, the earlier of (i) the
maturity of the applicable Mortgage Loan, as the same may be extended, and (ii)
two years from the date of the Warehousing Advance.

 

(11)                                                                         
Extension of Warehouse Period: The Warehouse Period may be extended for up to 1
year (i.e., for a total maximum Warehouse Period of 3 years), provided that the
following conditions are all satisfied in the sole discretion of the
Administrative Agent:

 

(i)                                     The underlying Mortgage Loan (as the
same may have been extended) does not mature prior to the expiration of such
period.

 

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

 

(ii)                                  Within 45 calendar days prior to the
expiration of the initial Warehouse Period, Administrative Agent has received
(A) an updated appraisal of the as-is value and the as-stabilized value of the
Mortgaged Property, in form and substance satisfactory to Administrative Agent,
and (B) an updated assessment (in form and substance satisfactory to
Administrative Agent) as to the Mortgaged Property’s ability to qualify for the
Applicable Targeted Permanent Loan Program initially identified in the Credit
Underwriting Documents and including an update of the Applicable Expected
Permanent Loan Amount.

 

(iii)                               (A) Based upon the updated as-is appraised
value of the Mortgaged Property and the updated assessment, (A) the Advance Rate
would not be exceeded, (B) the Warehousing Advance Debt Service Coverage Ratio
as of the last day of the calendar month of the otherwise expiring Warehouse
Period is at least 1.2 to 1.0, and (C) the then Warehousing Advance-to-Targeted
Principal Ratio does not exceed what the Warehousing Advance-to-Targeted
Principal Ratio was as of the applicable Advance Date, unless the Borrower makes
a partial prepayment of the Warehousing Advance in an amount necessary so that
(1) the outstanding amount of the Warehousing Advance does not exceed the
Advance Rate then applicable to such Mortgage Loan, (2) the Warehousing Advance
Debt Service Coverage Ratio is at least 1.2 to 1.0 and (3) the resulting
Warehousing Advance-to-Targeted Principal Ratio does not exceed what the
Warehousing Advance-to-Targeted Principal Ratio was as of the applicable Advance
Date.

 

(iv)                              Borrower has delivered any and all information
underlying or supporting the calculations required by the preceding subsection,
and the same shall be satisfactory in form and substance to Administrative
Agent.

 

Independent Living Facilities

 

Subject to compliance with the terms and limitations set forth below and the
terms, representations and warranties, and covenants in the Agreement, the
following Independent Living Facility Mortgage Loan is an Eligible Loan for
purposes of the Agreement:

 

(1)                                
                                                Mortgage Loan type: An interim
First Mortgage Loan secured by an Independent Living Facility to (i) refinance
an existing third party Mortgage Loan, or (ii) finance the acquisition of such
Independent Living Facility, in either case possibly to include funds for minor
repairs and rehabilitation (subject to the limitations set forth in this Exhibit
and the Agreement).  For the avoidance of doubt, Mortgage Loans secured by
Continuing Care Retirement Communities shall not be Eligible Loans.

 

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

 

(2)                                
                                                Repairs and rehabilitation:  May
not exceed 15% of Cost.

 

(3)                                
                                                Subordinate Mortgage Loans or
mezzanine debt: Not Permitted.

 

(4)                                
                                                Sublimit: The aggregate
outstanding principal amount of all Warehousing Advances against Qualified
Seniors Facilities shall at no time exceed an amount equal to 50% of the Total
Commitment Amount.

 

(5)                                
                                                Maximum amount of Mortgage
Loan:  $15,000,000.

 

(6)                                
                                                Advance Rate: The lesser of (i)
53% of the as is value of the Mortgaged Property with respect to the particular
Mortgage Loan based upon a third party MAI appraisal, reviewed and approved by
the Administrative Agent, and (ii) 70% of the Mortgage Note Amount advanced by
the Borrower with respect to the applicable Mortgage Loan.

 

(7)                                
                                                Warehousing Advance Debt Service
Coverage Ratio: As of the date of the closing of the Mortgage Loan and as of the
applicable Advance Date, the Warehousing Advance Debt Service Coverage Ratio
must be at least 1.40 to 1.00.

 

(8)                                
                                                Maximum Underlying Loan-to-Value
Ratio and Loan-to-Cost Ratio: The Underlying Loan-to-Value Ratio may not exceed
75%, and the Loan-to-Cost Ratio may not exceed 75%.

 

(9)                                
                                                Underlying Debt Service Coverage
Ratio: As of the date of the closing of the Mortgage Loan and as of the
applicable Advance Date, the Underlying Debt Service Coverage Ratio must be at
least 1.30 to 1.00.

 

(10)                                                                         
Warehouse Period: Unless extended as provided below, the earlier of (i) the
maturity of the applicable Mortgage Loan, as the same may be extended, and (ii)
two years from the date of the Warehousing Advance.

 

(11)                                                                         
Extension of Warehouse Period: The Warehouse Period may be extended for up to 1
year (i.e., for a total maximum Warehouse Period of 3 years), provided that the
following conditions are all satisfied in the sole discretion of the
Administrative Agent:

 

(i)                                     The underlying Mortgage Loan (as the
same may have been extended) does not mature prior to the expiration of such
period.

 

(ii)                                  Within 45 calendar days prior to the
expiration of the initial Warehouse Period, Administrative Agent has received
(A) an updated appraisal of the as-is value and the as-stabilized value of the
Mortgaged Property, in form and substance satisfactory to Administrative Agent,
and (B) an updated assessment (in form and substance satisfactory to
Administrative Agent) as to the Mortgaged Property’s ability to qualify for the
Applicable

 

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

 

Targeted Permanent Loan Program initially identified in the Credit Underwriting
Documents and including an update of the Applicable Expected Permanent Loan
Amount.

 

(iii)                               (A) Based upon the updated as-is appraised
value of the Mortgaged Property and the updated assessment, (A) the Advance Rate
would not be exceeded, (B) the Warehousing Advance Debt Service Coverage Ratio
as of the last day of the calendar month of the otherwise expiring Warehouse
Period is at least 1.4 to 1.0, and (C) the then Warehousing Advance-to-Targeted
Principal Ratio does not exceed what the Warehousing Advance-to-Targeted
Principal Ratio was as of the applicable Advance Date, unless the Borrower makes
a partial prepayment of the Warehousing Advance in an amount necessary so that
(1) the outstanding amount of the Warehousing Advance does not exceed the
Advance Rate then applicable to such Mortgage Loan, (2) the Warehousing Advance
Debt Service Coverage Ratio is at least 1.4 to 1.0 and (3) the resulting
Warehousing Advance-to-Targeted Principal Ratio does not exceed what the
Warehousing Advance-to-Targeted Principal Ratio was as of the applicable Advance
Date.

 

(iv)                              Borrower has delivered any and all information
underlying or supporting the calculations required by the preceding subsection,
and the same shall be satisfactory in form and substance to Administrative
Agent.

 

Eligible Assisted Living Facilities

 

Subject to compliance with the terms and limitations set forth below and the
terms, representations and warranties, and covenants in the Agreement, the
following Eligible Assisted Living Facility Mortgage Loan is an Eligible Loan
for purposes of the Agreement:

 

(12)                                                                         
Mortgage Loan type: An interim First Mortgage Loan secured by a Assisted Living
Facility to (i) refinance an existing third party Mortgage Loan, or (ii) finance
the acquisition of such Assisted Living Facility, in either case possibly to
include funds for minor repairs and rehabilitation (subject to the limitations
set forth in this Exhibit and the Agreement); provided that if the Assisted
Living Facility includes an Alzheimer/Memory Care Unit, such Alzheimer/Memory
Care Unit shall not exceed (x) 30% of the total units in such Assisted Living
Facility or (y) 30% of the income generated by such Assisted Living Facility. 
For the avoidance of doubt, Mortgage Loans secured by Skilled Nursing
Facilities, Continuing Care Retirement Communities or purely Alzheimer/Memory
Care Units shall not be Eligible Loans.

 

(13)                                                                         
Repairs and rehabilitation:  May not exceed 15% of Cost.

 

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

 

(14)                                                                         
Subordinate Mortgage Loans or mezzanine debt: Not Permitted.

 

(15)                                                                         
Sublimit: The aggregate outstanding principal amount of all Warehousing Advances
against Qualified Seniors Facilities shall at no time exceed an amount equal to
50% of the Total Commitment Amount.

 

(16)                                                                         
Maximum amount of Mortgage Loan:  $15,000,000.

 

(17)                                                                         
Advance Rate: The lesser of (i) 49% of the as is value of the Mortgaged Property
with respect to the particular Mortgage Loan based upon a third party MAI
appraisal, reviewed and approved by the Administrative Agent, and (ii) 65% of
the Mortgage Note Amount advanced by the Borrower with respect to the applicable
Mortgage Loan.

 

(18)                                                                         
Warehousing Advance Debt Service Coverage Ratio: As of the date of the closing
of the Mortgage Loan and as of the applicable Advance Date, the Warehousing
Advance Debt Service Coverage Ratio must be at least 1.50 to 1.00.

 

(19)                                                                         
Maximum Underlying Loan-to-Value Ratio and Loan-to-Cost Ratio: The Underlying
Loan-to-Value Ratio may not exceed 75%, and the Loan-to-Cost Ratio may not
exceed 75%.

 

(20)                                                                         
Underlying Debt Service Coverage Ratio: As of the date of the closing of the
Mortgage Loan and as of the applicable Advance Date, the Underlying Debt Service
Coverage Ratio must be at least 1.40 to 1.00.

 

(21)                                                                         
Warehouse Period: Unless extended as provided below, the earlier of (i) the
maturity of the applicable Mortgage Loan, as the same may be extended, and (ii)
two years from the date of the Warehousing Advance.

 

(22)                                                                         
Extension of Warehouse Period: The Warehouse Period may be extended for up to 1
year (i.e., for a total maximum Warehouse Period of 3 years), provided that the
following conditions are all satisfied in the sole discretion of the
Administrative Agent:

 

(i)                                     The underlying Mortgage Loan (as the
same may have been extended) does not mature prior to the expiration of such
period.

 

(ii)                                  Within 45 calendar days prior to the
expiration of the initial Warehouse Period, Administrative Agent has received
(A) an updated appraisal of the as-is value and the as-stabilized value of the
Mortgaged Property, in form and substance satisfactory to Administrative Agent,
and (B) an updated assessment (in form and substance satisfactory to
Administrative Agent) as to the Mortgaged Property’s ability to qualify for the
Applicable Targeted Permanent Loan Program initially identified in the Credit

 

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Underwriting Documents and including an update of the Applicable Expected
Permanent Loan Amount.

 

(iii)                               (A) Based upon the updated as-is appraised
value of the Mortgaged Property and the updated assessment, (A) the Advance Rate
would not be exceeded, (B) the Warehousing Advance Debt Service Coverage Ratio
as of the last day of the calendar month of the otherwise expiring Warehouse
Period is at least 1.5 to 1.0, and (C) the then Warehousing Advance-to-Targeted
Principal Ratio does not exceed what the Warehousing Advance-to-Targeted
Principal Ratio was as of the applicable Advance Date, unless the Borrower makes
a partial prepayment of the Warehousing Advance in an amount necessary so that
(1) the outstanding amount of the Warehousing Advance does not exceed the
Advance Rate then applicable to such Mortgage Loan, (2) the Warehousing Advance
Debt Service Coverage Ratio is at least 1.5 to 1.0 and (3) the resulting
Warehousing Advance-to-Targeted Principal Ratio does not exceed what the
Warehousing Advance-to-Targeted Principal Ratio was as of the applicable Advance
Date.

 

(iv)                              Borrower has delivered any and all information
underlying or supporting the calculations required by the preceding subsection,
and the same shall be satisfactory in form and substance to Administrative
Agent.

 

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