Document:

EXHIBIT 10.52

 

SEVENTH AMENDMENT AND CONSENT AGREEMENT

 

THIS SEVENTH AMENDMENT AND CONSENT AGREEMENT (this “Agreement”) is made as of December 28, 2011, by and among GPF Acquisition, LLC (“GPFA,” or the “Borrower” as the context may require), 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”).  Walker & Dunlop II LLC joins this Agreement in its capacity as a Pledgor.

 

R E C I T A L S

 

A.            The Obligor Group has informed the Administrative Agent and the Lenders that (i) the Company desires to assume, as of the Assumption Effective Date (as hereafter defined), the obligations of GPFA as the Borrower under the Credit Agreement, and become the borrower of the Loan and the “Borrower” under the Loan Agreement and other Loan Documents (including, without limitation, the Notes), without constituting a novation of the Company’s existing obligations as a Guarantor or affecting the obligations of GPFA (the foregoing being referred to herein as, the “Assumption”), (ii) effective as of December 30, 2011 (the “Reorganization Date”) the Obligor Group and certain of their respective Affiliates (collectively, the Obligor Group and such Affiliates, the “Reorganizing Parties”) desire to enter into and consummate a series of transactions, as more particularly described in Exhibit A annexed hereto (each, a “Reorganization Transaction,” and collectively, the “Reorganization Transactions”), pursuant to the various documents and agreements listed on Exhibit B annexed hereto (collectively, the “Reorganization Documents”), as a result of which the remaining entities comprising the Obligor Group will be WDLLC (as a direct wholly-owned Subsidiary of Multifamily Inc.), Multifamily Inc. (as a direct wholly-owned subsidiary of the Company), and the Company (the ownership of which is not to be impacted by the Reorganization Transactions), as more fully described in Exhibit A and the Reorganization Documents, and as shown on the organizational chart annexed hereto as Exhibit C (the “Effective Date Org Chart”), and (iii) in connection with the Reorganization Transactions, WDLLC and Multifamily Inc. desire to amend their respective Organization Documents as of the Reorganization Date, pursuant to the documents listed on Exhibit D annexed hereto (collectively, the “Organization Documents Amendments”).

 

B.            The Assumption requires the consent of the Administrative Agent, the Collateral Agent, and the Lenders, which consents have been requested by the Obligor Group.

 

C.            The Reorganization Transactions and the Organization Documents Amendments are prohibited by various provisions of, or otherwise, without the consent of the Administrative Agent, the Collateral Agent, and the Lenders, could constitute a Default or Event of Default under, the Credit Agreement and other Loan Documents, and the Loan Parties therefore have requested that the Administrative Agent, the Collateral Agent, and the Lenders consent to the Reorganization Transactions and the Organization Documents Amendments, and waive any Defaults and Events of Default under the Credit Agreement otherwise resulting therefrom; and

 

D.            The Administrative Agent, the Collateral Agent, and the Lenders have agreed to the requests of the Obligor Group, but only on, and subject to, the terms and conditions set forth in this Agreement.

 

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.              Defined Terms Incorporated into Credit Agreement.  From and after the Assumption Effective Date and the Reorganization Effective Date (each of which, if it occurs, an “Effective Date”), as applicable, defined terms used in this Agreement (including the Recitals) shall have the same meanings in the Credit Agreement and other Loan Documents as in this Agreement, as the context shall require, and the Credit Agreement and other Loan Documents shall be deemed amended as of the applicable Effective Date to accomplish the foregoing without the need to otherwise add each such term, or any of them, to the Credit Agreement pursuant to this Agreement or otherwise.

 

 

2.              Assumption of Loan by the Company.

 

(a)         Without limiting the Company’s existing obligations under the Credit Agreement and other Loan Documents to which it is a party (as Guarantor through the Assumption Effective Date, and thereafter in its capacity as the Borrower as set forth in this Section 2(a)), without relieving GPFA of any of its existing obligations under Credit Agreement and other Loan Documents to which it is a party (as the Borrower through the Assumption Effective Date, and thereafter in its capacity as Guarantor as set forth in Section 2(c), below), and without intending to create a novation with respect to any of the foregoing obligations, as of the Assumption Effective Date the Company hereby assumes the (i) indebtedness evidenced by the Notes, (ii) the Loan,  and (iii) all of GPFA ‘s other obligations, as borrower or maker, as the case may be, under the Loan Documents to which GPFA is a party to the same extent as if the Company had signed such instruments.  Subject to the terms of this Agreement, from and after the Assumption Effective Date, the Company agrees to comply with and be bound by all the terms, covenants, agreements, conditions and provisions relating to GPFA set forth in those Loan Documents to which GPFA was a party.  To evidence the assumption of the Borrower’s obligations under the Notes, the Company, as the “Borrower,” shall issue replacement Notes to each Lender, to be dated as of the Assumption Effective Date and to be in the respective principal amounts outstanding on the Assumption Effective Date under the Notes currently respectively held by them (the “Replacement Notes”).  The Company acknowledges that no principal amounts paid under the Notes may be reborrowed.

 

(b)         From and after the Assumption Effective Date, references in the Credit Agreement and other Loan Documents to the Borrower shall mean and refer to the Company, provided, however, that (i) the foregoing is not intended to and shall not constitute an extinguishment of the Company’s existing liabilities and obligations arising in its capacity as a Guarantor, and (ii) nothing in this Agreement shall affect the Company’s specific obligations, covenants, and agreements under the Credit Agreement and other Loan Documents to which it is a party, including, without limitation, pursuant to the Replacement Pledge Agreement.

 

(c)          From and after the Assumption Effective Date, the obligations of GPFA under the Credit Agreement and other Loan Documents to which it is a party shall continue in effect, with GPFA as a Guarantor, jointly and severally with the Borrower and the other Guarantors, and GPFA hereby accepts, adopts, and assumes each and every provision of the Credit Agreement and of every other Loan Document applicable to Guarantors, jointly and severally with all other Guarantors, including Sections 11.01 through and including 11.05 of the Credit Agreement, each of which is hereby incorporated herein by reference as if set forth herein at length.  From and after the Assumption Effective Date, the term “Guarantor” (and therefore the term “Loan Party”) as used in the Credit Agreement shall include GPFA in such capacity.

 

3.              Consents.  On and subject to the terms and conditions set forth in this Agreement, as of the Reorganization Effective Date, the Administrative Agent, the Collateral Agent, and the Lenders hereby consent to (a) the Reorganization Transactions, and (b) the Organization Documents Amendments.

 

4.              Ratification of Pledges.  Each Pledgor hereby ratifies and confirms the security interests granted by such Pledgor to the Administrative Agent and the Lenders to secure the Obligations, including after giving effect to the Assumption and as of the Reorganization Date and consummation of the Reorganization Transactions.  In addition: (a) Multifamily Inc., as the surviving entity of the various mergers included within the Reorganization Transactions, and the assignee of the Equity Interest in WDLLC being contributed to it by the Company in a Reorganization Transaction, and (b) each Pledgor (other than Multifamily Inc.), hereby acknowledges, confirms and agrees that each Reorganization Transaction to which such Person is a party is subject to the respective Pledge Agreements and that, after giving effect to the Reorganization Transactions, all collateral currently securing the Obligations is intended to continue to secure the Obligations as provided in the respective Pledge Agreements of the Company and Multifamily Inc.

 

5.              Amendment to Credit Agreement.  In addition to the modifications to the Credit Agreement pursuant to other provisions of this Amendment, effective as of the Reorganization Effective Date the Credit Agreement is hereby amended as follows (with all existing provisions of the Credit Agreement, as amended to the date hereof, to remain in effect until the Reorganization Effective Date, or, if the Reorganization Effective Date does not occur, to continue in effect in accordance with the terms thereof unless and until otherwise amended, modified, or waived):

 

 

(a)         Except as provided in this Amendment with respect to GPFA, unless the context otherwise requires in any particular instance, all references in the Credit Agreement and any other Loan Document to any member of the Obligor Group, or any other applicable entity, whose separate legal existence will terminate as a result of and as contemplated by the Reorganization Transactions will be a reference to Multifamily Inc.

 

(b)         Section 1.01 of the Credit Agreement is amended as follows:

 

(i)             Subsections (a), (b), (c) of the definition of “Change of Control” set forth therein are hereby deleted in their entirety and replaced with the following:

 

“(a)   The Company shall cease to both (i) directly own, legally and beneficially (free and clear of all Liens other than those in favor of the Collateral Agent and the Lenders), 100% of the issued and outstanding Equity Interests of, and (ii) directly Control, Multifamily Inc.;”

 

“(b)   Multifamily Inc. shall cease to both (i) directly own, legally and beneficially (free and clear of all Liens other than those in favor of the Collateral Agent and the Lenders), 100% of the issued and outstanding Equity Interests of, and (ii) directly Control, WDLLC;”

 

“(c)   INTENTIONALLY OMITTED”

 

(ii)          The definition of the term “Operating Agreement” set forth therein is hereby deleted in its entirety and replaced with the following:

 

“Operating Agreement” means the Amended and Restated Operating Agreement of WDLLC dated as of January 30, 2009, (a) from and after the Second Amendment Effective Date, as amended to such date, (b) from and after the consummation of the Formation Transactions and the Public Offering, as amended pursuant to Amendment No. 4 thereto dated as of December 20, 2010, and (c) from and after the consummation of the Reorganization Transactions, as amended and restated pursuant to that certain First Restated Operating Agreement of Walker & Dunlop, LLC to be dated on or about the Reorganization Date and to be in the form thereof approved by the Administrative Agent.”

 

6.              Conditions Precedent to the Assumption; Assumption Effective Date.  As used herein, the term “Assumption Effective Date” means, and the Assumption Effective Date will be deemed to occur on, December 28, 2011, provided that, by 3:00 p.m. eastern time on such date, the following conditions and any other applicable conditions set forth in this Agreement have been satisfied or waived in writing by the Administrative Agent, failing which the agreements of the Agents and the Lenders under this Agreement and all related documents shall be null and void at the option of the Administrative Agent:

 

(a)         The Administrative Agent shall have received each of the following, each to be in form and substance satisfactory to the Administrative Agent:

 

(i)             This Agreement, duly executed by each member of the Obligor Group, each Pledgor (if not a member of the Obligor Group), the Agents, and the Lenders.

 

(ii)          The Replacement Notes, duly executed by the Company.

 

(iii)       Such certificates of resolutions or other actions, incumbency certificates and/or other certificates of Responsible Officers of such members of the Obligor Group as the Administrative Agent may require evidencing (A) the authority of such member of the Obligor Group to enter into, execute, and deliver this Agreement and the other documents to be executed and delivered in connection herewith to which such Person is a party or is to be a party, and (B) the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible 

 

 

Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party.

 

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

 

(v)         An opinion of counsel to the Company and the other members of the Obligor Group as to such matters as the Administrative Agent reasonably shall require.

 

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

 

(c)          The representations and warranties of each member of the Obligor Group contained in this Agreement or in any document, instrument, or agreement delivered or to be delivered in connection with this Agreement (i) shall have been true and correct in all material respects on the date that such representations and warranties were made, and (ii) shall be true and correct in all material respects on the Assumption Effective Date as if made on and as of such date.

 

(d)         All required third party and Governmental Authority consents, waivers, approvals, and authorizations to the Assumption and this Agreement shall have been obtained or waived, and copies of such consents, waivers, approvals, and authorizations shall have been provided to the Administrative Agent.

 

(e)          The Company shall have paid all of the reasonable out of pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses and disbursements) of the Agents and the Lenders incurred in connection with this Agreement, the Replacement Notes, all other documents in connection herewith, and the matters addressed in and contemplated by this Agreement.

 

7.              Conditions Precedent to the Reorganization Transactions; Reorganization Effective Date.  As used herein, the term “Reorganization Effective Date” means, and the Reorganization Effective Date will be deemed to occur on, the Reorganization Date, provided that, by 3:00 p.m. eastern time on such date, the following conditions and any other applicable conditions set forth in this Agreement have been satisfied or waived in writing by the Administrative Agent, failing which the agreements of the Agents and the Lenders under this Agreement and all related documents shall be null and void at the option of the Administrative Agent:

 

(a)         The Assumption Effective Date shall have occurred in accordance with the applicable provisions of this Agreement.

 

(b)         The Administrative Agent shall have received the following, each to be in form and substance satisfactory to the Administrative Agent:

 

(i)             Such updated certificates of resolutions or other actions, incumbency certificates and/or other certificates of Responsible Officers of each member of the Obligor Group as the Administrative Agent may require.

 

(ii)          Fully executed copies of all of the Reorganization Documents and the Organization Documents Amendments, which shall be in substantially the form of the respective drafts thereof most recently provided to the Administrative Agent and the Lenders prior to the execution of this Agreement, with such changes as the Administrative Agent may approve.

 

(iii)       An Amended, Restated and Consolidated Ownership Interests Pledge and Security Agreement, duly executed by Multifamily Inc., WDLLC, and the Collateral Agent.

 

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

 

(c)          The Reorganization Transactions shall have been consummated in accordance with applicable law and on the terms described in the Reorganization Documents and related agreements, without waiver or modification, and otherwise in a manner reasonably satisfactory to the Administrative Agent.

 

 

(d)         The representations and warranties of each member of the Obligor Group contained in this Agreement or in any document, instrument, or agreement delivered or to be delivered in connection with this Agreement (i) shall have been true and correct in all material respects on the date that such representations and warranties were made, and (ii) shall be true and correct in all material respects on the Reorganization Effective Date as if made on and as of such date.

 

(e)          All required third party and Governmental Authority consents, waivers, approvals, and authorizations to the Reorganization Transactions shall have been obtained or waived, and copies of such consents, waivers, approvals, and authorizations shall have been provided to the Administrative Agent.

 

(f)           The Company shall have paid all of the reasonable out of pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses and disbursements) of the Agents and the Lenders incurred in connection with this Agreement, the Replacement Notes, all other documents in connection herewith, and the matters addressed in and contemplated by this Agreement.

 

8.              Obligor Group Acknowledgments and Agreements.  Each member of the Obligor Group and, as applicable, each Pledgor, hereby acknowledges, confirms and agrees that:

 

(a)         All of the facts set forth in the Recitals of this Agreement are true and correct and incorporated into this Agreement by reference.

 

(b)         Except as provided herein, the terms, conditions, covenants, and other provisions of the Credit Agreement and the other Loan Documents (each as previously amended to the date hereof) remain in full force and effect, and each hereby ratifies, confirms and reaffirms all of such terms, conditions, covenants and other provisions.

 

(c)          By granting the consents set forth in this Agreement, the Agents and the Lenders are not consenting to any other or subsequent amendment to, modification or waiver of any other provisions of, or to the strict application of all applicable provisions of, the Credit Agreement and the other Loan Documents, notwithstanding any description or disclosure of any contemplated, planned, or anticipated future transactions, events, or occurrences.

 

(d)         This Agreement constitutes, and the documents and agreements to be executed and delivered in connection herewith will constitute, Loan Documents.

 

(e)          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, as of the date hereof and as of each Effective Date, 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 each 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 other Loan Documents, or the administration thereof or the obligations created thereby.

 

(f)           From and after the date of this Agreement, they will keep the Administrative Agent and the Lenders fully informed relative to the Reorganization Transactions on a timely basis, and will provide the Administrative Agent and the Lenders with drafts of all relevant documents as available.  Unless specifically otherwise stated in writing, in no event shall the Agents or any Lender be deemed to have approved, endorsed, or consented or acquiesced to, any matter described in or contemplated by any documents or other materials or information from time to time furnished to them, by its or their review thereof.

 

9.              Representations and Warranties.  Each member of the Obligor Group, and, as applicable, each Pledgor, hereby represents and warrants as follows:

 

(a)         No Default or Event of Default exists as of the date such Person executes this Agreement.  After giving effect to this Agreement in accordance with its terms, no Default or Event of Default will exit on either Effective Date.

 

 

(b)         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 such representations and warranties, and those made by such Person in this Agreement, and in any documents, instruments, or agreements to be delivered in connection with this Agreement will be true and correct as of each Effective Date after giving effect to this Agreement, except as to (i) matters which speak to a specific date, (ii) changes in the ordinary course to the extent permitted and contemplated by the Credit Agreement, (iii) matters previously disclosed in writing to the Administrative Agent (and, if required, consented to by the Administrative Agent and, if further required, the Lenders), and (iv) if the Reorganization Effective Date occurs, changes resulting from the Reorganization Transactions.

 

(c)          Each such Person, and, as applicable, each Reorganizing Party: (i) has the power and authority and legal right to execute and deliver this Agreement, the Reorganization Documents to which such Person is a party, and the documents, instruments, or agreements to be delivered by such Person in connection with this Agreement and the Reorganization Documents to which such Person is a party, and to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, and (ii) has taken, or will have taken, any necessary action to authorize the execution, delivery, and performance of this Agreement, the Reorganization Documents to which such Person is a party, and the documents, instruments, or agreements to be delivered in connection with this Agreement and the Reorganization Documents to which such Person is a party.  The individual executing and delivering this Agreement, the Reorganization Documents to which the Person on whose behalf such individual is executing any Reorganization Documents is a party, and the documents, instruments, or agreements to be delivered in connection with this Agreement and the Reorganization Documents on behalf of such Person is, or will be at the time of such execution and delivery, duly authorized to do so.

 

(d)         This Agreement has been, and the documents, instruments, or agreements to be delivered by such Person and, as applicable, each Reorganizing Party, in connection with this Agreement and the Reorganization Transactions to which such Person is a party will be, duly executed and delivered on behalf of such Person and constitutes, or when executed and delivered will be, 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.

 

(e)          Except as set forth on Exhibit E hereto, no consents, waivers, approvals, and authorizations of any third parties or Governmental Authorities are required to be obtained by such Person or, as applicable, any Reorganizing Party, in connection with the execution, delivery, and performance of this Agreement or the Reorganization Documents, and all of such consents, waivers, approvals, and authorizations will be obtained on or prior to each applicable Effective Date.

 

(f)           Neither the execution or delivery by any Reorganizing Party of, or the performance by or on behalf of any Reorganizing Party of its obligations under, this Agreement, the Reorganization Documents to which such Person is a party, or any documents executed and delivered in connection herewith or therewith, nor compliance by any of them with the terms and provisions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby (i) will contravene any applicable provisions of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality, or (ii) unless any necessary consents or approvals (including as may be required from any rating agency) have been obtained and copies thereof furnished to the Administrative Agent, will conflict with or result in any breach of, any of the terms, covenants, conditions, or provisions of, or constitute a default under, any Material Contract to which such Person or any of its Subsidiaries is a party or by which any of them or any of their assets is bound or to which any of them is subject, or (iii) will violate or cause a default by any such Person under any Organization Document of any such Person or of any Person in which any such Person holds an Equity Interest.

 

(g)          No member of the Obligor Group, and none of their respective Subsidiaries has any interest in any corporation, limited liability company, partnership or other entity (whether or not consolidated with such Person) as of the date hereof, except as disclosed on the organizational chart attached hereto as Exhibit F, nor will any of them have any such interests after giving effect to the consummation of the Reorganization Transactions, except as disclosed on the Effective Date Org Chart.

 

 

10.       Further Assurances.  Each member of the Obligor Group shall, and, as may be applicable shall cause any applicable Subsidiary, to from time to time (i) execute and deliver, or cause to be executed and delivered, all such other and further additional agreements, documents, certificates, and instruments, and (ii) take or cause to be taken all such other and further actions as the Administrative Agent may reasonably request to effectuate the intent and purposes, and carry out the terms, of this Agreement

 

11.       Miscellaneous.

 

(a)         Promptly, and in any event not later than five Business Days after the Reorganization Effective Date, the Borrower shall provide the Administrative Agent reasonably satisfactory evidence from applicable governmental authorities that the Reorganization Transactions have been consummated.

 

(b)         Promptly following the Assumption Effective Date each Lender shall return to the Borrower the Note held by such Lender which is being replaced by a Replacement Note.

 

(c)          The Company shall promptly pay upon receipt of an invoice or statement therefor the reasonable attorneys’ fees and expenses and disbursements incurred by the Agents and the Lenders in connection with this Agreement.

 

(d)         The terms and provisions of this Agreement shall modify and supersede all inconsistent terms and provisions of the Credit Agreement and the documents related thereto and, except as expressly modified by this Agreement, the terms and provisions of the Credit Agreement and such other documents are ratified and confirmed and shall continue in full force and effect.

 

(e)          This Agreement 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.

 

(f)           This Agreement 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 Agreement to each other party if so requested by such other party.

 

(g)          This Agreement, together with the documents, instruments, and agreements executed and delivered, and to be executed and delivered, in connection herewith, constitute the complete agreement among the Obligor Group, the Pledgors party hereto, and the Credit Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings relating to such subject matter, and may not be modified, altered, or amended except in accordance with the Credit Agreement.

 

(h)         This Agreement is binding upon and shall inure to the benefit of the parties hereto and their successors and assigns, provided, however, no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder, under the Loan Agreement, or under any other Loan Document.

 

(i)             Time is of the essence with respect to all aspects of this Agreement.

 

[Remainder of page intentionally left blank]

 

 

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:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
WALKER & DUNLOP   MULTIFAMILY, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   William M. Walker
    
	
 
    	
Name:   
    	
William   M. Walker
    
	
 
    	
Title:   
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WALKER & DUNLOP GP, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   William M. Walker
    
	
 
    	
Name:
    	
William   M. Walker
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GREEN PARK FINANCIAL LIMITED PARTNERSHIP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Walker & Dunlop GP, LLC, its   Managing General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   William M. Walker
    
	
 
    	
Name:
    	
William   M. Walker
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
W&D, INC. (f/k/a Walker &   Dunlop, Inc.)
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   William M. Walker
    
	
 
    	
Name:
    	
William   M. Walker
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WALKER & DUNLOP, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   William M. Walker
    
	
 
    	
Name:   
    	
William   M. Walker
    
	
 
    	
Title:   
    	
President &   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WALKER & DUNLOP, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   William M. Walker
    
	
 
    	
Name:   
    	
William   M. Walker
    
	
 
    	
Title:   
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
WALKER & DUNLOP II LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   William M. Walker
    
	
 
    	
Name:
    	
William   M. Walker
    
	
 
    	
Title:
    	
President
    

 

 

	
 
    	
BANK OF AMERICA, N.A., as Administrative   Agent, Collateral Agent, and a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Margaret A. Mulcahy
    
	
 
    	
Name:
    	
Margaret   A. Mulcahy
    
	
 
    	
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 PresidentExhibit 10.17

 

HERITAGE COMMERCE CORP
 AMENDED AND RESTATED 2004 EQUITY PLAN

 

STOCK OPTION AGREEMENT

 

Capitalized terms used without definition in this Stock Option Agreement (the “Option Agreement”) shall have the meanings given such terms in the Heritage Commerce Corp  Amended and Restated 2004 Equity Plan (the “Plan”).

 

I.

NOTICE OF STOCK OPTION GRANT

 

TO:

 

1.               Option.  You have been granted an option to purchase shares of common stock (the “Shares”) of Heritage Commerce Corp, a California corporation (the “Company”), subject to the terms and conditions of the Plan and this Option Agreement, as follows:

 

Date of Grant:

 

Exercise Price per Share:   $

 

Total Number of Shares Granted:

 

Total Exercise Price:   $

 

Type of Option:   NQ

 

Expiration Date:   10 Years From Date of Grant

 

2.                                       Vesting and Expiration:  Vesting at 1/1460th of the grant per day until vested.

 

3.                                       Termination.  So long as the Optionee maintains Continuous Status as a Director, Employee or Consultant, this Option may be exercised, in whole or in part, with respect to any vested Shares, anytime prior to the Expiration Date.  If the Optionee’s Continuous Status as a Director, Employee or Consultant terminates for any reason, the Optionee shall have that amount of time set forth in Section 9 of the Plan to exercise any vested Shares, after which time this Option shall expire.

 

II.

 

AGREEMENT

 

1.                                       Grant of Option.  The Company hereby grants to the Optionee (the “Optionee”) named in the Notice of Stock Option Grant set forth above (the “Notice of Grant”) an option (the “Option”) to purchase the total number of Shares set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms, definitions and provisions of the Plan, which is incorporated herein by reference.

 

1

 

2.                                       Exercise of Option.

 

(a)                                  Right to Exercise.  This Option shall be exercisable prior to its expiration date only, in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement.

 

(b)                                 Method of Exercise.  This Option shall be exercisable by written notice which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other representations and agreements as to the Optionee’s investment intent with respect to the Shares as may be required by the Company pursuant to the provisions of the Plan.  Such notice is attached hereto as Exhibit A.   The written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company.  The written notice shall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

 

(c)                                  Compliance with Law.  No Shares will be issued pursuant to the exercise of any Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed.  Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such shares.

 

3.                                       Method of Payment.  Subject to Section 8, payment of the Exercise Price shall be paid by (a) cash, (b) check or (c)  any combination of those methods of payment.  In addition, if there is a public market for the Shares, the Optionee may elect to pay the Exercise Price through a special sale and remittance procedure under which the Optionee provides irrevocable written instructions to a designated brokerage firm to effect the immediate sale of a portion of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, an amount sufficient to cover the aggregate option price payable for the purchased Shares plus all applicable Federal and State income and employment taxes required to be withheld by the Company by reason of such purchase and/or sale.  The Optionee must also provide such irrevocable written instructions to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm to effect the sale transaction.  Notwithstanding the above, the Company shall not be required to permit the Optionee to utilize the sale and remittance procedure described above if the Company’s legal counsel advises the Company that the procedure may violate any applicable law, regulation or regulatory guidance.

 

4.                                       Optionee’s Representations.  In the event the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company an investment representation statement in a form reasonably required by the Company.

 

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5.                                       Non-Transferability of Option; Assignment by Company.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee; provided, however, that any Nonstatutory Stock Option may be transferred by Optionee to any member of Optionee’s immediate family, to a partnership the members of which (other than Optionee) are all members of Optionee’s immediate family, or to a family trust the beneficiaries of which (other than Optionee) are all members of Optionee’s immediate family.  The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.  The Company may assign any of its rights under this Option Agreement to single or multiple assignees, and this Option Agreement shall inure to the benefit of the successors and assigns of the Company.

 

6.                                       Restrictions on Transfer.  All certificates representing Shares purchased under this Option Agreement may be imprinted with an appropriate legend with respect to any applicable restriction on transfer.  The Company may issue appropriate stop-transfer instructions to its transfer agent to ensure compliance with these transfer restrictions.  If the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.  The Company shall not be required to transfer on its books any Shares that have been sold or transferred in violation of any of the provisions of the Plan or this Option Agreement, or to treat as the owner of such Shares or to accord the right to vote or pay dividends to any purchaser or transferee to whom such Shares has been sold or transferred.

 

7.                                       Market Stand-Off Agreement.  Optionee hereby agrees that if so requested by the Company or any representative of the underwriters in connection with the first registration statement of the Company to become effective under the Securities Act which includes securities to be sold on behalf of the Company to the public in an underwritten public offering, Optionee shall not sell or otherwise transfer the Shares or any other securities of the Company during the 180-day period following the effective date of such registration statement.  The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such 180-day period.  Optionee agrees that the Company may assign his or her obligation hereunder to any underwriter of the Company’s initial public offering.

 

8.                                       Acknowledgments of Optionee.

 

(a)                                  NO RIGHT OF EMPLOYMENT.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE HERITAGE COMMERCE CORP 2004 STOCK OPTION PLAN THAT IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

 

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(b)                                 Receipt of Plan.  Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option.  Optionee further agrees to notify the Company upon any change in the residence address indicated above.

 

9.                                       Notice.  Any notice required or permitted under this Option Agreement shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the party at its address as shown below, or to such other address as such party may designate in writing from time to time to the other party.

 

10.                                 Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.  The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee.  In case of conflict between the provisions in the Plan and this Option Agreement, the provisions in the Plan shall prevail.  This Option Agreement is governed by California law except for that body of law pertaining to conflict of laws.

 

 

	
Date:
    	
 
    	
 
    	
HERITAGE   COMMERCE CORP
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
By:
    	
 
    

 

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Exhibit A

 

HERITAGE COMMERCE CORP

AMENDED AND RESTASTED 2004 EQUITY PLAN

EXERCISE NOTICE

 

TO:                                                                            Heritage Commerce Corp

150 Almaden Boulevard

San Jose, California 95113

ATTN:

 

SUBJECT:                                         NOTICE OF EXERCISE OF STOCK OPTION

 

In respect to the stock option granted to the undersigned on                           , to purchase an aggregate of                    shares of the Company’s Common Stock, this is official notice that the undersigned hereby elects to exercise such option to purchase shares as follows:

 

NUMBER OF SHARES:

 

DATE OF PURCHASE:

 

MODE OF PAYMENT:

 

(Certified check, cash or other [specify])

 

The shares should be issued as follows:

 

NAME:

 

ADDRESS:

 

	
Signed:
    	
 
    
	
 
    	
 
    
	
Dated:
    	
 
    

 

Please send this notice of exercise to:

 

Heritage Commerce Corp

150 Almaden Boulevard

San Jose, California 95113

Attn:

 

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