Exhibit 10.3

 

EXECUTION VERSION

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”) is executed as of October 5, 2012, by WALKER &
DUNLOP, INC., a Maryland corporation (“Guarantor”), for the benefit of the
Credit Parties (defined below).

 

RECITALS:

 

A.                                    W&D INTERIM LENDER II LLC, a Delaware
limited liability company (“Borrower”), is entering into a certain Warehousing
Credit and Security Agreement dated of even date herewith (as amended, modified,
supplemented, or restated from time to time, the “Credit Agreement”), among
Borrower, Guarantor, the Lenders now or hereafter party thereto (the “Lenders”),
and Bank of America, N.A., as Administrative Agent for the benefit of the
Lenders (“Administrative Agent”) (Administrative Agent and the Lenders, together
with their respective successors and assigns, are each a “Credit Party,” and
collectively the “Credit Parties”).  Capitalized terms used herein shall, unless
otherwise indicated, have the respective meanings set forth in the Credit
Agreement.

 

B.                                    Guarantor is the owner of one hundred
percent (100%) of the equity interests in Borrower and will benefit from the
Credit Parties’ extension of credit to Borrower under the Credit Agreement.

 

C.                                    This Guaranty is integral to the
transactions contemplated by the Loan Documents, and the execution and delivery
hereof is a condition precedent to the Credit Parties’ agreements under the Loan
Agreement.

 

NOW, THEREFORE, as an inducement to the Credit Parties to enter into the Credit
Agreement and to make Warehousing Advances to Borrower thereunder, and to extend
such credit to Borrower as the Credit Parties may from time to time agree to
extend, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Guarantor hereby guarantees
payment of the Guaranteed Obligations (hereinafter defined) and hereby agrees as
follows:

 

Section 1.                                          NATURE OF GUARANTY. 
Guarantor hereby absolutely and unconditionally guarantees, as a primary obligor
and not merely as a surety, as a guarantee of payment and not merely as a
guarantee of collection, prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of any and all
existing and future Obligations including, without limitation, all indebtedness
and liabilities of every kind, nature and character, direct or indirect,
absolute or contingent, liquidated or unliquidated, voluntary or involuntary, of
Borrower to the Credit Parties arising under the Credit Agreement, any other
Loan Documents or any Hedging Arrangements (including, without limitation, all
renewals, extensions, modifications, amendments, and restatements thereof and
all costs, reasonable attorneys’ fees and expenses incurred by any Credit Party
in connection with the collection or enforcement thereof) including, without
limitation, interest accruing after maturity and after the commencement of any
bankruptcy proceeding against the Borrower, whether or not allowed in such
proceeding (collectively, the “Guaranteed Obligations”).  Administrative Agent’s
books and records showing the amount of the Guaranteed Obligations shall be
admissible in evidence in any action or proceeding, and shall be prima facie
evidence for the purpose of establishing the amount of the Guaranteed
Obligations.  This Guaranty shall not be affected by the genuineness, validity,
regularity, or enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, or extent of any collateral therefor, or by any fact
or circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of Guarantor under this Guaranty.

 

Section 2.                                          NO SETOFF OR DEDUCTIONS;
TAXES.  Guarantor represents and warrants that it is incorporated and resident
in the United States of America.  All payments by Guarantor hereunder shall be
paid in full, without setoff or counterclaim or any deduction or withholding
whatsoever,

 

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

 

including, without limitation, for any and all present and future taxes.  If
Guarantor must make a payment under this Guaranty, then Guarantor represents and
warrants that it will make the payment from its offices located in the United
States of America to Administrative Agent, for the benefit of the Credit
Parties, so that no withholding tax is imposed on such payment.  Notwithstanding
the foregoing, if Guarantor makes a payment under this Guaranty to which
withholding tax applies, or any taxes (other than taxes imposed on a Credit
Party’s income, and franchise taxes) are at any time imposed on any payments
under or in respect of this Guaranty including, but not limited to, payments
made pursuant to this Section 2, then Guarantor shall pay all such taxes to the
relevant authority in accordance with applicable law such that each Credit Party
receives the sum it would have received had no such deduction or withholding
been made and shall also pay to Administrative Agent, for the benefit of the
Credit Parties, on demand, all additional amounts which Administrative Agent
specifies as necessary to preserve the after-tax yield the Credit Parties would
have received if such taxes had not been imposed.  Guarantor shall promptly
provide Administrative Agent with an original receipt or certified copy issued
by the relevant authority evidencing the payment of any such amount required to
be deducted or withheld.

 

Section 3.                                          NO TERMINATION.  This
Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations
now or hereafter existing and shall remain in full force and effect until all
Guaranteed Obligations and any other amounts payable under this Guaranty are
indefeasibly paid and performed in full and any commitments of the Credit
Parties or facilities provided by the Credit Parties with respect to the
Guaranteed Obligations are terminated.  All payments under this Guaranty shall
be made at Administrative Agent’s Office in Dollars.

 

Section 4.                                          WAIVER OF NOTICES. 
Guarantor waives notice of the acceptance of this Guaranty and of the extension
or continuation of the Guaranteed Obligations or any part thereof. Guarantor
further waives presentment, protest, notice, dishonor or default, demand for
payment, notice of intent to accelerate, notice of acceleration, and any other
notices to which Guarantor might otherwise be entitled.

 

Section 5.                                          AGREEMENT TO PAY; NO
SUBROGRATION.  In furtherance of the foregoing and not in limitation of any
other right that Administrative Agent or any other Credit Party has at law or in
equity against any Guarantor by virtue hereof, upon the failure of Borrower to
pay any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, Guarantor
hereby promises to and will forthwith pay, or cause to be paid, to
Administrative Agent or such other Credit Party as designated thereby in cash
the amount of such unpaid Guaranteed Obligations.  Guarantor shall not exercise
any right of subrogation, contribution, or similar rights with respect to any
payments it makes under this Guaranty until all of the Guaranteed Obligations
and any amounts payable under this Guaranty are indefeasibly paid and performed
in full and any commitments of the Credit Parties or facilities provided by the
Credit Parties with respect to the Guaranteed Obligations are terminated.  If
any amounts are paid to Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of the Credit Parties and
shall forthwith be paid to Administrative Agent, for the benefit of the Credit
Parties, to reduce the amount of the Guaranteed Obligations, whether matured or
unmatured.

 

Section 6.                                          WAIVER OF SURETYSHIP
DEFENSES.  Guarantor agrees that the Credit Parties may, at any time and from
time to time, and without notice to Guarantor, make any agreement with Borrower
or with any other person or entity liable on any of the Guaranteed Obligations
or providing collateral as security for the Guaranteed Obligations, for the
extension, renewal, payment, compromise, discharge, or release of the Guaranteed
Obligations or any collateral (in whole or in part), or for any modification,
amendment or waiver of the terms thereof or of any instrument or agreement
evidencing the Guaranteed Obligations or the provision of collateral, all
without in any way impairing, releasing, discharging, or otherwise affecting the
obligations of Guarantor under this Guaranty.  Guarantor waives any defense
arising by reason of any disability or other defense of Borrower or any other
guarantor, or the

 

2

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

 

cessation from any cause whatsoever of the liability of Borrower, or any claim
that Guarantor’s obligations exceed or are more burdensome than those of
Borrower and waives the benefit of any statute of limitations affecting the
liability of Guarantor hereunder.  Guarantor waives any right to enforce any
remedy which Guarantor now has or may hereafter have against Borrower and waives
any benefit of and any right to participate in any security now or hereafter
held by Administrative Agent for the benefit of the Credit Parties.  Further,
Guarantor consents to the taking of, or failure to take, any action which might
in any manner or to any extent vary the risks of Guarantor under this Guaranty
or which, but for this provision, might operate as a discharge of Guarantor. 
Guarantor waives any and all other suretyship defenses, whether or not
specifically described herein.

 

Section 7.                                          EXHAUSTION OF OTHER REMEDIES
NOT REQUIRED.  The obligations of Guarantor hereunder are those of primary
obligor, and not merely as surety, and are independent of the Guaranteed
Obligations.  Guarantor waives diligence by any of the Credit Parties and action
on delinquency in respect of the Guaranteed Obligations or any part thereof,
including, without limitation any provisions of law requiring any Credit Party
to exhaust any right or remedy or to take any action against Borrower, any other
guarantor, or any other person, entity, or property before enforcing this
Guaranty against Guarantor.

 

Section 8.                                          REINSTATEMENT. 
Notwithstanding anything in this Guaranty to the contrary, this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any portion of the Guaranteed Obligations is revoked, terminated,
rescinded, or reduced or must otherwise be restored or returned upon the
insolvency, bankruptcy, or reorganization of Borrower or any other person or
entity or otherwise, as if such payment had not been made and whether or not
Administrative Agent is in possession of or has released this Guaranty and
regardless of any prior revocation, rescission, termination or reduction.

 

Section 9.                                          SUBORDINATION.  Guarantor
hereby expressly subordinates the payment of all obligations and indebtedness of
Borrower owing to Guarantor, whether now existing or hereafter arising and
whether those obligations are (a) direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, (b) due or to
become due to Guarantor, (c) held by or are to be held by Guarantor, (d) created
directly or acquired by assignment or otherwise, or (e) evidenced in writing
(the “Subordinated Debt”) to the indefeasible payment in full of all Guaranteed
Obligations.  Guarantor agrees not to accept any payment of such Subordinated
Debt from Borrower if an Unmatured Default or Event of Default exists.  If
Guarantor receives any payment of any Subordinated Debt in violation of the
foregoing, then Guarantor shall hold that payment in trust for the Credit
Parties and promptly turn it over to Administrative Agent, for the benefit of
the Credit Parties, in the form received (with any necessary endorsements), to
be applied in accordance with the Credit Agreement, but without reducing or
affecting in any manner the liability of Guarantor under this Guaranty.

 

Section 10.                                   INFORMATION.  Guarantor agrees to
furnish promptly to Administrative Agent any and all financial or other
information regarding Guarantor or its property as Administrative Agent may
reasonably request in writing to the extent such information is in Guarantor’s
possession or control.

 

Section 11.                                   STAY OF ACCELERATION.  In the
event that acceleration of the time for payment of any of the Guaranteed
Obligations is stayed, upon the insolvency, bankruptcy, or reorganization of
Borrower or any other person or entity, or otherwise, all such amounts shall
nonetheless be payable by Guarantor immediately upon demand by Administrative
Agent.

 

Section 12.                                   INDEMNIFICATION AND EXPENSES.

 

(a)                                 Guarantor shall indemnify each Credit Party
and each of their Affiliates and its and their

 

3

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

 

respective shareholders, partners, directors, members officers, employees,
attorneys, agents, trustees and advisors of any of the Credit Parties (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities, and related expenses
(including, without limitation, the fees, charges, and disbursements of any
counsel for any Indemnitee), and shall indemnify and hold harmless each
Indemnitee from all reasonable fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party, Borrower, or Guarantor
arising out of, in connection with, or as a result of (i) the execution or
delivery or enforcement of this Guaranty or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder, the consummation of the transactions contemplated hereby,
or the administration of this Guaranty; or (ii) any actual or prospective claim,
litigation, investigation, or proceeding relating to any of the foregoing,
whether based on contract, tort, or any other theory, whether brought by a third
party, Borrower, or Guarantor, and regardless of whether any Indemnitee is a
party thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities, or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.

 

(b)                                 Guarantor shall pay to Administrative Agent
upon demand the amount of any and all reasonable out-of-pocket costs and
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, that Administrative Agent may incur in connection with the
administration of this Guaranty, including, without limitation, any such costs
and expenses incurred in the preservation, protection, or enforcement of any
rights of any Credit Party in any case commenced by or against Guarantor under
the Bankruptcy Code (Title 11, United States Code) or any similar or successor
statute.  The obligations of Guarantor under the preceding sentence shall
survive termination of this Guaranty.

 

Section 13.                                   AMENDMENTS.  No amendment,
modification, termination, or waiver of any provision of this Guaranty, and no
consent to any departure by Guarantor from the terms and conditions hereof,
shall in any event be effective unless the same shall be in writing and signed
by Administrative Agent and Guarantor.  Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.

 

Section 14.                                   NOTICES.  Any notice or other
communication herein required or permitted to be given shall be in writing and
shall be in accordance with the provisions of Section 14.1 of the Credit
Agreement.  All notices or other communications hereunder shall be made to the
applicable address, as follows: (i) if addressed to Administrative Agent, then
to the address specified for Administrative Agent set forth in Section 14.1 of
the Credit Agreement; and (ii) if addressed to Guarantor, then:

 

Walker & Dunlop, Inc.

7501 Wisconsin Avenue

Suite 1200

Bethesda, MD 20814

Attention: Richard M. Lucas

Tel: (301) 634-2146

Fax: (301) 500-1223

Email:  rlucas@walkerdunlop.com

 

4

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

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2987

Attention: Michael J. Pedrick, Esq.

Tel: 215.963.4808

Fax: 215.963.5001

Email: mpedrick@morganlewis.com

 

A Person may change its address, telecopier or telephone number for notices and
other communications in accordance with the terms and provisions set forth in in
Section 14.1(e) of the Credit Agreement.

 

Section 15.                                   NO WAIVER; ENFORCEABILITY.  No
failure by any Credit Party to exercise, and no delay in exercising, any right,
remedy or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy or power hereunder preclude any
other or further exercise thereof or the exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity.  The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein.

 

Section 16.                                   ASSIGNMENT.  This Guaranty shall:
(a) bind Guarantor and its successors and assigns, provided that Guarantor may
not assign or delegate its rights or obligations under this Guaranty without the
prior written consent of Administrative Agent (and any attempted assignment or
delegation without such consent shall be void); and (b) inure to the benefit of
each of the Credit Parties and their respective successors and assigns and the
Credit Parties may, without notice to Guarantor and without affecting
Guarantor’s obligations hereunder, assign or sell participations in the
Guaranteed Obligations and this Guaranty, in whole or in part subject to
applicable provisions of the Loan Agreement.  Guarantor agrees that the Credit
Parties may disclose to any prospective purchaser and any purchaser of all or
part of the Guaranteed Obligations any and all information in the Credit
Parties’ possession concerning Guarantor, this Guaranty, and any security for
this Guaranty to the extent permitted under, and in compliance with, the terms
of the Credit Agreement.

 

Section 17.                                   CONDITION OF BORROWER.  Guarantor
acknowledges and agrees that it has the sole responsibility for, and has
adequate means of, obtaining from Borrower such information concerning the
financial condition, business, and operations of Borrower as Guarantor requires,
and that no Credit Party shall have any duty, and Guarantor is not relying on
any Credit Party at any time, to disclose to Guarantor any information relating
to the business, operations, or financial condition of Borrower.

 

Section 18.                                   REPRESENTATIONS AND WARRANTIES;
LOAN DOCUMENTS.  By execution hereof, Guarantor covenants and agrees that
certain representations, warranties, terms, covenants, and conditions set forth
in the Loan Documents are applicable by their terms to Guarantor and shall be
imposed upon Guarantor, and Guarantor reaffirms that each such representation
and warranty is true and correct and covenants and agrees to promptly and
properly perform, observe, and comply with each such term, covenant, or
condition, with any breach of or failure to perform the forging being subject to
the Event of Default provisions of the Credit Agreement and other Loan
Documents.  In the event the Credit Agreement or any other Loan Document shall
cease to remain in effect for any reason whatsoever during any period when any
part of the Guaranteed Obligations remains unpaid, such terms, covenants, and
agreements of the Credit Agreement or such other Loan Document incorporated
herein by this reference and which are, by their terms, made applicable to
Guarantor shall nevertheless continue in full force and effect as obligations of
Guarantor under this Guaranty.

 

5

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

 

Section 19.                                   GOVERNING LAW; JURISDICTION; ETC.

 

(a)                                 GOVERNING LAW.                          
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW.

 

(b)                                       CONSENT TO JURISDICTION.  GUARANTOR
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
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 GUARANTOR BY MAIL AT THE ADDRESS SET FORTH IN THE CREDIT AGREEMENT.
GUARANTOR 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.

 

(c)                                  WAIVER OF VENUE.  GUARANTOR IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN SECTION 19(b).  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN THIS
GUARANTY WILL PREVENT ADMINISTRATIVE AGENT FROM BRINGING ANY ACTION, ENFORCING
ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST GUARANTOR, AGAINST ANY
SECURITY OR AGAINST ANY PROPERTY OF GUARANTOR WITHIN ANY OTHER COUNTY, STATE OR
OTHER FOREIGN OR DOMESTIC JURISDICTION.  GUARANTOR WAIVES ANY OBJECTION TO VENUE
AND ANY OBJECTION BASED ON A MORE CONVENIENT FORUM IN ANY ACTION INSTITUTED
UNDER THIS AGREEMENT.

 

(d)                                 WAIVER OF JURY TRIAL.  EACH PARTY HERETO
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS GUARANTY 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 ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF ADMINISTRATIVE
AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT
OF THE LOAN DOCUMENTS, AND AGREES 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.

 

Section 20.                                   FINAL AGREEMENT.  THIS GUARANTY
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE CONTRACT AMONG THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY AND ALL PREVIOUS
AGREEMENTS

 

6

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

 

AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Signature Page Follows]

 

7

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

 

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and
delivered as of the date first written above.

 

 

 

GUARANTOR:

 

 

 

WALKER & DUNLOP, INC., a Maryland corporation

 

 

 

 

 

By: 

/s/ William M. Walker

 

 

Name:

 William M. Walker

 

 

Title:

President and Chief Executive Officer

 

Signature Page to Guaranty

 

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