Exhibit 10.1

 

EXECUTION COPY

 

Walker & Dunlop, Inc.

Walker & Dunlop, LLC

7501 Wisconsin Avenue, Suite 1200E
Bethesda, Maryland 20814

 

September 4, 2012

 

CW Financial Services, LLC

CWCapital LLC

7501 Wisconsin Avenue, Suite 500W

Bethesda, Maryland 20814

 

Re:                             Agreements and Acknowledgements

 

Ladies and Gentlemen:

 

Reference is made to the Purchase Agreement, dated as of June 7, 2012, by and
among Walker & Dunlop, Inc., Walker & Dunlop, LLC, CW Financial Services LLC and
CWCapital LLC (the “Purchase Agreement”).  Terms used but not defined in this
letter (this “Letter”) shall have the respective meanings set forth in the
Purchase Agreement.

 

The Parties hereby agree that:

 

1.               The penultimate sentence of Section 3.1 of the Purchase
Agreement is hereby amended by replacing the phrase “11:59 p.m. (Eastern time)
on the date of the Closing” with “11:59 p.m. (Eastern time) on August 31,
2012”.  All references in the Purchase Agreement to covenants required to be
performed at or prior to the Closing Date shall be amended such that they are
required to be performed at or prior to September 4, 2012.  All references in
the Purchase Agreement to representations and warranties required to be accurate
as of the Closing Date shall be amended such that they are required to be
accurate as of September 4, 2012 (but without affecting any qualifications as to
materiality or Material Adverse Effect).  All references in the Purchase
Agreement to conditions required to be satisfied or waived as of the Closing
Date shall be amended such that they are required to be satisfied or waived as
of September 4, 2012.  Any certificates required to be delivered as of the
Closing Date shall be required to be delivered as of September 4, 2012.  The
Seller’s ownership interest in CWCapital LLC shall vest in Purchaser immediately
upon Seller’s receipt of the Cash Consideration and the Stock Consideration.

 

2.               The second sentence of Section 6.17(a) of the Purchase
Agreement is hereby amended in its entirety to read as follows:  “Effective as
of the day immediately following the Closing Date, the employees of the Company
shall cease to participate in the employee benefits plans and programs of the
Seller and its

 

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Affiliates in accordance with the terms and conditions of such plans and
programs.”

 

3.               The first sentence of Section 6.17(c) of the Purchase Agreement
is hereby amended in its entirety to read as follows:  “Effective as of the day
immediately following the Closing Date, the Company Employees shall be covered
by the Parent Employee Benefit Plans, subject to the terms and conditions of
such Parent Employee Benefit Plans.”

 

4.               The references in Sections 3.2(b), 3.2(c), 3.3(c) and 3.3(d) of
the Purchase Agreement to “ten (10) calendar days” are hereby amended to instead
read “ten (10) Business Days”.

 

5.               Notwithstanding anything to the contrary in the Purchase
Agreement (including, without limitation, Section 2.3 thereof), Schedule A to
the Purchase Agreement or the Company Closing Schedule prepared and delivered by
Seller (the “Proposed Company Closing Schedule”), the Parties agree to and
acknowledge the following adjustments for purposes of calculating the Closing
Adjustment:

 

(a)  A Fannie Mae Guaranty Receivable account was reflected on the Proposed
Company Closing Schedule as account number 14014 within the line item “Accrued
Income & Other Receivables” and will be treated as a current asset in the amount
of $539,410 (the “Fannie Mae Guaranty Receivable”).  For avoidance of doubt, it
is acknowledged that the $539,410 was included in the Proposed Company Closing
Schedule in the “Accrued Income & Other Receivables” line item as part of the
total amount shown of $4,463,404, and that the $539,410 was part of, and not in
addition to, the $4,463,404.  The resulting final amount of the Fannie Mae
Guaranty Receivable shall be $539,410.

 

(b)  The CWCapital portion of ARA excess cash was not reflected on the Proposed
Company Closing Schedule, but will be treated as a current asset in the amount
of $324,015.

 

(c)  The increase in bonus accrual for resignation payments for Messrs. Weil and
Ginsberg reflected on the Proposed Company Closing Schedule as part of the
“Accrued Bonus” will be treated as a current liability, but the amount of such
current liability reflected on the Proposed Company Closing Schedule as Accrued
Bonus shall be increased by $133,000.  The resulting final amount of such
Accrued Bonus liability shall be $400,000.

 

(d)  The “Accrued Value Creation — GSE West” adjustment reflected on the
Proposed Company Closing Schedule will be treated as a current

 

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liability, but the amount of such current liability reflected on the Proposed
Company Closing Schedule shall be increased by $122,918.  The “Accrued Value
Creation — GSE West” relates only to the Value Creation Plan Bonus defined in
the employment agreements of Trent Brooks and Bryan Frazier, and not to any
other compensation for Messrs. Brooks and Frazier contemplated in their
respective employment agreements.  The resulting final amount for the “Accrued
Value Creation — GSE West” and the Brooks and Frazier value creation shall be
$1,622,918.

 

(e)  The Stonewood Apartments risk share adjustment was not reflected on the
Proposed Company Closing Schedule, but will be treated as a current liability in
the amount of $309,687.

 

(f)  The Volusia Crossing risk share adjustment was not reflected on the
Proposed Company Closing Schedule, but will be treated as a current liability in
the amount of $433,780.

 

(g)  The Pelican Pointe risk share adjustment was not reflected on the Proposed
Company Closing Schedule, but will be treated as a current liability in the
amount of $644,746.

 

The foregoing adjustments and the resulting aggregate amounts for the applicable
line items of the Proposed Company Closing Schedule, each as reflected in
Exhibit A hereto, shall be referred to as the “Agreed Adjustments” for purposes
of this letter.  The Parties further agree and acknowledge that the collective
effect of the Agreed Adjustments will be to decrease the Estimated Working
Capital Surplus reflected on the Proposed Company Closing Schedule by
$1,320,116.  The Agreed Adjustments shall be conclusive and binding on the
Parties.  In no event shall any Party disagree with, dispute or challenge the
Agreed Adjustments including, without limitation, pursuant to the procedures set
forth in Section 2.3 of the Purchase Agreement.  None of (i) the Agreed
Adjustments, (ii) Exhibit A hereto, (iii) the contents of Exhibit A hereto, or
(iv) Exhibit A’s inclusion as an exhibit hereto is an admission or
acknowledgement by any Party that the Proposed Company Closing Schedule does not
comply with the Purchase Agreement or Schedule A thereto.  In no event shall any
Party assert or posit any allegation, contention or argument that there has been
any such admission or acknowledgement.

 

6.               A new Section 6.10(f) will be inserted into the Purchase
Agreement which will read, in its entirety, as follows:  “Until the earlier of
(x) such time as the Seller appoints its Board Designees and such Board
Designees actually become members of the Parent’s Board of Directors, and (y)
February 28, 2013 (provided that such February 28, 2013 date shall be extended
until actual appointment if the

 

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applicable Board Designee is rejected by Parent pursuant to the Purchase
Agreement), Seller shall have the right, but not the obligation, to appoint the
number of observers to the Parent’s Board of Directors (the “Board Observers”)
that is equal to the number of Board Designees that have not yet actually become
members of the Parent’s Board of Directors.  Subject to fiduciary duties,
confidentiality, privilege and all other applicable laws, each of the Board
Observers shall have the right to (a) attend any and all meetings of the
Parent’s Board of Directors and any committees or subcommittees of the Parent’s
Board of Director and (b) receive the same notices of such meetings, materials,
information and notices of actions taken as the members of the Parent’s Board of
Directors or such committee or subcommittee are entitled to receive.”

 

7.               A new Section 9.1(h) will be inserted into the Purchase
Agreement which will read, in its entirety, as follows:  “During the period
commencing on the Closing Date and ending on the 12 month anniversary of the
Closing Date, Seller hereby covenants and agrees to maintain net worth equal to
or greater than $22,000,000 at all times during such period.  Solely to the
extent that there are unresolved indemnity claims asserted by Purchaser
Indemnified Parties against Seller pursuant to Article 9 of the Purchase
Agreement as of the 12 month anniversary of the Closing Date, during the period
commencing on such 12 month anniversary until such time as there are no such
unresolved indemnity claims against Seller, Seller hereby covenants and agrees
to maintain net worth equal to or greater than the aggregate amount of the
Losses asserted by the Purchaser Indemnified Parties with respect to such
unresolved indemnity claims (but not to exceed $22,000,000, in the aggregate),
calculated, in each case, as of the applicable day of such period.”

 

8.               Any fees paid to the counterparties to the Company Warehouse
Lines (including the legal fees of such counterparties) shall be deemed to be
fees associated with obtaining consent of Governmental Authorities and treated
in accordance with the last sentence of Section 10.19 of the Purchase Agreement.

 

9.               Seller shall pay $170,000 of Parent’s fees related to the
transaction, which amount shall be paid as a reduction in the Cash Consideration
paid by Parent at Closing.

 

10.         For purposes of the letter agreement dated August 27, 2012 regarding
certain sales of mortgage servicing rights entered into by the parties hereto
(the “Consent”), the Parties agree that the Servicing Rights Purchase and Sale
Agreement between Wells Fargo, National Association and the Company dated August
31, 2012  shall be deemed a Sale Agreement (as defined in Consent).

 

Except as modified hereby, the Purchase Agreement shall remain in full force and
effect in accordance with its terms.  The term “Agreement” or “Purchase
Agreement” as used in the

 

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Purchase Agreement shall for all purposes therein refer to the Purchase
Agreement as amended by this Letter.  This Letter may be executed in more than
one counterpart, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.   This Letter shall
be governed by and construed in accordance with the laws of the State of
Delaware without regard to its conflicts of law rules and principles.

 

[signature page follows]

 

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If the foregoing is in accordance with your understanding, please countersign
this Letter where indicated below and return one executed copy to the
undersigned by facsimile or e-mail, whereupon this letter will constitute our
binding agreement with respect to the matters herein.

 

 

 

Sincerely yours,

 

 

 

 

 

WALKER & DUNLOP, INC.

 

 

 

 

 

 

 

 

By:

/s/ William M. Walker

 

 

Name: William M. Walker

 

 

Title: Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

 

WALKER & DUNLOP, LLC

 

 

 

 

 

 

 

 

By:

/s/ William M. Walker

 

 

Name: William M. Walker

 

 

Title: Chairman, President and Chief Executive Officer

 

 

 

 

 

 

Accepted and agreed to as of this

 

 

4th day of September, 2012

 

 

 

 

 

CW FINANCIAL SERVICES LLC

 

 

 

 

 

 

 

 

By:

/s/ Scott D. Spelfogel

 

 

Name: Scott D. Spelfogel

 

 

Title: Executive Vice President

 

 

 

 

 

 

 

 

CWCAPITAL LLC

 

 

 

 

 

 

 

 

By:

/s/ Scott D. Spelfogel

 

 

Name: Scott D. Spelfogel

 

 

Title: Executive Vice President

 

 

 

[Signature Page to Closing Side Letter]

 

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