Item 1.01. Entry into a Material Definitive
Agreement.
On February 4, 2022,
Walker & Dunlop, Inc., a Maryland corporation (the “Company” or “we”), entered into a Share Purchase
Agreement (the “Purchase Agreement”) with WD-GTE, LLC a Delaware limited liability company and a wholly owned subsidiary of
the Company (“WD Purchaser”), GeoPhy B.V., a Netherlands private limited liability company (“GeoPhy”), the several
persons and entities constituting the holders (the “Shareholders”) of all of GeoPhy’s issued and outstanding shares
of capital stock (the “Acquired Shares”), and Shareholder Representative Services LLC, as representative of the Shareholders,
pursuant to which WD Purchaser will acquire all of the Acquired Shares and the Company has agreed to unconditionally and irrevocably guarantee
to the Shareholders the due and punctual payment and discharge by WD Purchaser of the obligations, covenants and agreements of WD Purchaser
under the Purchase Agreement (the transactions contemplated by the Purchase Agreement, the “Transaction”).
On the terms and subject
to the conditions set forth in the Purchase Agreement (i) upon closing of the Transaction, the Shareholders will receive
consideration with an aggregate value equal to approximately $85 million in cash (subject to certain purchase price and escrow
adjustments), and (ii) if, as and when payable, the Shareholders will be entitled to receive earnout payments (the
“Earnout Consideration”) with an aggregate value of up to $205 million in cash. The Earnout Consideration is allocated
up to $50 million payable attributable to the achievement of Apprise (defined below) revenue and productivity milestones and up to
$155 million payable attributable to the achievement of small balance lending (“SBL”) volume and revenue milestones. The
Earnout Consideration will become payable, subject to the terms and conditions of the Purchase Agreement, upon the final
determination of the achievement of the milestones for years ended December 31, 2022, 2023, 2024, and 2025. Upon the terms and
conditions of the Purchase Agreement, the payment of the Earnout Consideration is subject to acceleration in the event (i) of the
termination of the Company’s multifamily real estate asset appraisal service offering (“Apprise”) and/or the
Company’s SBL business unit, (ii) of the winding-down or liquidating of GeoPhy, Apprise or the Company’s SBL business
unit, (iii) of any fundamental changes to the nature of Apprise and/or the Company’s SBL business unit, or (iv) that a
change of control of WD Purchaser, GeoPhy, or the Company’s indirect wholly owned subsidiary, Walker & Dunlop, LLC,
occurs and the acquiring company does not unconditionally and irrevocably assume WD Purchaser’s obligations to perform under
the earnout.
The Purchase Agreement contains
customary representations and warranties of GeoPhy, the Shareholders, and WD Purchaser. Each party has also agreed to customary covenants,
including, in the case of GeoPhy and the Shareholders, covenants relating to the conduct of the business during the interim period between
the execution of the Purchase Agreement and the closing of the Transaction and, in the case of certain of the Shareholders, four-year
post-closing non-competition and non-solicitation restrictive covenants. In addition, each party’s obligation to consummate the
Transaction is subject to certain other customary conditions, including the accuracy of the representations and warranties of the other
party, subject to certain materiality standards, and compliance in all material respects by the other party with its covenants. Also,
the Purchase Agreement contains customary indemnification provisions whereby the Shareholders have agreed to indemnify, subject to certain
limitations and thresholds, WD Purchaser, and certain affiliated parties of WD Purchaser, for certain losses, liabilities and damages.
The Purchase Agreement provides
certain termination rights for GeoPhy and WD Purchaser. Specifically, the Purchase Agreement can be terminated upon mutual written consent
of GeoPhy and WD Purchaser; by either WD Purchaser or GeoPhy if certain closing conditions are not satisfied or if the closing of the
Transaction has not occurred on or prior to March 31, 2022; by either WD Purchaser or GeoPhy if the other party has breached any
representation, warranty, covenant or agreement in the Purchase Agreement which cannot or has not been cured within 20 days and gives
rise to the failure of a relevant closing condition; and by either WD Purchaser or GeoPhy if applicable law or a legal requirement renders
illegal or otherwise prohibits the closing of the Transaction.
The
foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the
full text of the Purchase Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the
year ended December 31, 2021.