Exhibit 10.5

 

SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”)
is made as of May 11, 2011, by and among GPF Acquisition, LLC, Walker & Dunlop
Multifamily, Inc., Walker & Dunlop GP, LLC, Green Park Financial Limited
Partnership, W&D, Inc., Walker & Dunlop, Inc., and Walker & Dunlop, LLC
(collectively, the “Obligor Group”), Bank of America, N.A., as Administrative
Agent and Collateral Agent (the “Administrative Agent”), and the lenders party
hereto (the “Lenders”).  Capitalized terms used herein without definition have
the meanings specified therefor in that certain Amended and Restated Credit
Agreement dated as of January 30, 2009, by and among the Obligor Group, the
Administrative Agent, and the Lenders, as amended (the “Credit Agreement”).

 

R E C I T A L S

 

The Obligor Group, the Administrative Agent, and the Lenders desire to amend the
Credit 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:

 

6.                                       Amendments.  Effective as of the
Effective Date (as hereafter defined), the Credit Agreement is hereby amended as
follows:

 

(a)                                  Section 1.01 of the Loan Agreement is
hereby amended as follows:

 

(i)                                     The term “Adjusted Tangible Net Worth”
is hereby deleted in its entirety.

 

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

 

“Applicable Margin” means 2.50%.

 

“EBITDA” means, at any date of determination thereof, an amount equal to the
following, all as determined in accordance with GAAP (net of intercompany
transactions and without duplication):

 

(a)                                  Net Income for the most recently completed
Measurement Period;

 

plus

 

(b)                                 to the extent deducted in calculating Net
Income: the sum of (i) depreciation expenses, (ii) amortization and write-offs
of Servicing Contracts, (iii) any unrealized losses under the Rate Cap
Agreement, and (iv) reserves for risk-sharing obligations relating solely to
Fannie Mae DUS Mortgage Loans pursuant to the Fannie Mae DUS Program;

 

minus

 

(c)                                  to the extent included in calculating Net
Income, (i) capitalized amounts attributable to origination of Servicing
Contract rights (ii) cash received under the Rate Cap Agreement and any
unrealized gains under the Rate Cap Agreement, and (iii) the fair value of
expected guaranty obligations.

 

“Maturity Date” means October 31, 2015.

 

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

 

(iii)                               The following definitions are hereby added
in the proper alphabetical sequence:

 

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

 

“Parent” means Walker & Dunlop, Inc., a Maryland corporation, which is also
referred to as the “Company” pursuant to that certain Fifth Amendment to this
Agreement dated as of December 7, 2010.

 

(b)                                 Section 2.04 of the Agreement is hereby
deleted in its entirety and replaced with “INTENTIONALLY OMITTED.”

 

(c)                                  Sections 6.01(a), (b) and (c) of the Credit
Agreement are hereby deleted in their entirety, and replaced with the following:

 

(a)                              As soon as available and in any event within
one hundred twenty (120) days after the end of each fiscal year of the Parent,
audited consolidated, and consolidating with respect to WDLLC, fiscal year-end
statements of income and cash flows of the Parent for that year, and the related
consolidated, and consolidating with respect to WDLLC, audited balance sheet as
of the end of that year (setting forth in comparative form the corresponding
figures for the preceding fiscal year), all in reasonable detail and accompanied
by (1) an opinion as to those financial statements in form and substance
reasonably satisfactory to Credit Agent and prepared by an independent certified
public accounting firm reasonably acceptable to Credit Agent,  and (2) if then
available or otherwise within fifteen (15) days of receipt by the Parent, any
management letters, management reports or other supplementary comments or
reports delivered by those accountants to the Parent;

 

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

 

(c)                              As soon as available and in any event within
sixty (60) days after the end of each Fiscal Quarter, a consolidated report
(“Servicing Portfolio Report”) as of the end of the Fiscal Quarter, as to all
Mortgage Loans the servicing rights to which are owned by the Parent or its
Affiliates, and separately for WDLLC (in each case, specified by investor type,
recourse and non-recourse). The Servicing Portfolio Report must be in similar
summary form as previously presented to Credit Agent (or as Credit Agent
otherwise may agree), and must, at a minimum, indicate which Mortgage Loans
(1) are current and in good standing, (2) are more than 30, 60 or 90 days past
due, (3) are the subject of pending bankruptcy or foreclosure proceedings, or
(4) have been converted (through foreclosure or other proceedings in lieu of
foreclosure) into real estate

 

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owned by a member of the Parent’s consolidated group, and include, by Mortgage
Loan type (x) weighted average coupon, (y) weighted average maturity, and
(z) weighted average servicing fee.”

 

(d)                                 Section 6.02 is hereby amended as follows:

 

(i)                                     In Sections 6.02(a), (c), and
(d) references to WDLLC shall be replaced by references to the Parent.

 

(ii)                                  In Sections 6.02(b), (e), (f), and (g), in
addition to references to WDLLC there shall be added references to the Parent,
as the context may require.

 

(e)                                  Section 6.03(d) is hereby amended by
replacing “WDLCC” with “the Parent.”

 

(f)                                    Section 7.14, except for the last
grammatical paragraph thereof, is hereby deleted in its entirety and replaced
with the following:

 

(a)                                  Permit the Parent’s Tangible Net Worth at
any time to be less than $100,000,000.00, to be tested on the last day of each
Fiscal Quarter, or (b) permit the Parent or any applicable Subsidiary to
otherwise not be in compliance with applicable net worth requirements of HUD or
any Investor, including Fannie Mae and Freddie Mac.

 

(b)                                 Permit the Parent’s Liquid Assets,
determined on a consolidated basis, at any time to be less than $10,000,000.00,
or permit the Parent or any applicable Subsidiary otherwise not to be in
compliance with applicable requirements of HUD or any Investor, including Fannie
Mae and Freddie Mac.

 

(c)                                  Permit EBITDA at any time to be less than
$12,000,000, to be tested on the last day of each Fiscal Quarter.

 

(d)                                 Permit the ratio of (i) EBITDA, to (ii) the
sum of (a) interest payments made or required to be made by the Borrower on
account of the Obligations (less cash received by the Borrower under the Rate
Cap Agreement), plus (b) an amount equal to the aggregate principal amount of
the Term Loan required to be paid by the Borrower hereunder (whether or not so
paid) during the applicable year in accordance with Section 2.03(b) to be less
than 3.0 to 1.0, determined for the applicable Measurement Period.

 

(e)                                  Permit the aggregate unpaid principal
amount of (i) all Mortgage Loans comprising the Parent’s consolidated Servicing
Portfolio to be less than $11.0 billion at any time or (ii) all Fannie Mae DUS
Mortgage Loans comprising the Servicing Portfolio of WDLLC to be less than $7.5
billion at any time, calculated as of the last day of each Fiscal Quarter.

 

(f)                                    Permit the LTSV Ratio at any time to be
greater than 40%, to be tested on the last day of each Fiscal Quarter.

 

(g)                                 Permit the aggregate unpaid principal amount
of Fannie Mae DUS Mortgage Loans within the Parent’s consolidated Servicing
Portfolio which are sixty (60) or more days past due or otherwise in default to
at any time exceed two percent (2%) of the aggregate unpaid principal balance of
all Fannie Mae DUS Mortgage Loans within the Parent’s consolidated Servicing
Portfolio at such time.”

 

(g)                                 Exhibit B (Form of Compliance Certificate)
to the Credit Agreement is hereby deleted in its entirety and replaced with the
form of Exhibit B annexed to this Amendment.

 

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7.                                       Obligor Group Acknowledgments.  Each
member of the Obligor Group acknowledges, confirms and agrees that:

 

(a)                                  This Amendment is a Loan Document, and all
references in any Loan Document to the Obligations shall mean and include the
Obligations as amended by this Amendment.

 

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

 

(i)                                     After giving effect to this Amendment,
no Default or Event of Default exists as of the date such Person executes this
Amendment, nor will a Default or Event of Default exist as of the Effective
Date.

 

(ii)                                  The representations and warranties made
by, or with respect to, each such Person in the Credit Agreement and the other
Loan Documents are true and correct as of the date hereof as if remade herein,
and will be true and correct as of the Effective Date, except as to (1) matters
which speak to a specific date, and (2) changes in the ordinary course to the
extent permitted and contemplated by the Credit Agreement.

 

(iii)                               Each such Person has the power and authority
and legal right to execute, deliver and perform this Amendment, has taken any
necessary action to authorize the execution, delivery, and performance of this
Amendment, and the individual executing and delivering this Amendment on behalf
of such Person is duly authorized to do so.

 

(iv)                              This Amendment has been duly executed and
delivered on behalf of such Person and constitutes the legal, valid and binding
obligation of such Person, enforceable against such Person 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)                                  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
shall be paid.

 

(d)                                 Such Person has no defenses, set offs or
counterclaims with respect to any of its obligations to the Administrative
Agent, the Collateral Agent, or the Lenders, and hereby releases, waives, and
forever relinquishes all claims, demands, obligations, liabilities, and causes
of action whatever kind or nature, whether known or unknown, which it has or may
have as of the date hereof and as of the Effective Date against the
Administrative Agent, the Collateral Agent, and/or any of the Lenders, or their
respective 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
connected with the Credit Agreement or the administration thereof or the
obligations created thereby (including pursuant to this Amendment).

 

8.                                       Conditions Precedent.  This Amendment
shall be effective upon the satisfaction by the Obligor Group 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 “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 to the Administrative Agent and
each Lender of the following:

 

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(i)                                     This Amendment, duly executed by each
member of the Obligor Group, and by the Administrative Agent and each Lender,
and

 

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

 

(b)                                 The Borrower shall have paid to the
Administrative Agent, for the ratable account of the Lenders based on their
respective Commitments, a non-refundable, fully earned fee in the amount of
$130,500.00.

 

(c)                                  No Default or Event of Default shall have
occurred and be continuing.

 

(d)                                 In addition to all other expense payment and
reimbursement obligations of the Obligor Group under the Credit Agreement and
other Loan Documents, the Borrower will, promptly following its receipt of an
appropriate invoice therefor, pay or reimburse the Administrative Agent and the
Lenders 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

 

9.                                       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 original signed counterparts of this Amendment to each other party upon
request.

 

(c)                                  This Amendment constitutes the complete
agreement among the Obligor Group and the Credit Parties 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 Credit 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.

 

 

GPF ACQUISITION, LLC

 

 

 

 

 

By: Walker & Dunlop GP, LLC, its Managing Member

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

Managing Member

 

 

 

 

 

WALKER & DUNLOP MULTIFAMILY, INC.

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

President and CEO

 

 

 

 

 

WALKER & DUNLOP GP, LLC

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

Managing Member

 

 

 

 

 

GREEN PARK FINANCIAL LIMITED PARTNERSHIP

 

 

 

By: Walker & Dunlop GP, LLC, its Managing General Partner

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

Managing Member

 

 

 

 

 

W & D, INC.

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

President and CEO

 

 

 

 

 

WALKER & DUNLOP, LLC

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

President and CEO

 

 

 

 

 

WALKER & DUNLOP, INC.

 

 

 

 

 

 

By:

/s/ William M. Walker

 

Name:

William M. Walker

 

Title:

President and CEO

 

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

 

 

 

 

 

By:

/s/ Jane E. Huntington

 

Name:

Jane E. Huntington

 

Title:

Senior Vice President

 

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION, successor to NATIONAL CITY BANK, as a Lender

 

 

 

 

 

 

By:

/s/ Terri A. Wyda

 

Name:

Terri A. Wyda

 

Title:

Senior Vice President

 

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