Walker & Dunlop, Inc. (Form: 10-Q, Received: 11/04/2021 06:17:46)

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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35000

Walker & Dunlop, Inc.

(Exact name of registrant as specified in its charter)

Maryland		80-0629925
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

7501 Wisconsin Avenue, Suite 1200E

Bethesda, Maryland 20814

(301) 215-5500

(Address of principal executive offices and registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	WD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒

Smaller Reporting Company ☐

Accelerated Filer ☐

Emerging Growth Company ☐

Non-accelerated Filer ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 28, 2021, there were 32,038,216 total shares of common stock outstanding.

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Walker & Dunlop, Inc.
Form 10-Q
INDEX


		Page

PART I	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53

Item 4.	Controls and Procedures	54

PART II	OTHER INFORMATION	54

Item 1.	Legal Proceedings	54

Item 1A.	Risk Factors	54

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55

Item 3.	Defaults Upon Senior Securities	56

Item 4.	Mine Safety Disclosures	56

Item 5.	Other Information	56

Item 6.	Exhibits	57

	Signatures	58

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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)


		September 30, 2021	December 31, 2020
Assets
Cash and cash equivalents	$	318,188	$	321,097
Restricted cash		34,875		19,432
Pledged securities, at fair value		148,774		137,236
Loans held for sale, at fair value		2,711,900		2,449,198
Loans held for investment, net		233,685		360,402
Mortgage servicing rights		929,825		862,813
Goodwill and other intangible assets		341,703		250,838
Derivative assets		85,486		49,786
Receivables, net		106,228		65,735
Other assets		206,198		134,438
Total assets	$	5,116,862	$	4,650,975

Liabilities
Warehouse notes payable	$	2,848,579	$	2,517,156
Note payable		289,763		291,593
Allowance for risk-sharing obligations		61,607		75,313
Guaranty obligation, net		49,060		52,306
Derivative liabilities		13,263		5,066
Other liabilities		470,654		513,319
Total liabilities	$	3,732,926	$	3,454,753

Stockholders' Equity
Preferred stock (authorized 50,000; none issued)	$	—	$	—
Common stock ($0.01 par value; authorized 200,000 shares; issued and outstanding 31,194 shares at September 30, 2021 and 30,678 shares at December 31, 2020)		312		307
Additional paid-in capital ("APIC")		271,562		241,004
Accumulated other comprehensive income ("AOCI")		2,737		1,968
Retained earnings		1,090,506		952,943
Total stockholders’ equity	$	1,365,117	$	1,196,222
Noncontrolling interests		18,819		—
Total equity	$	1,383,936	$	1,196,222
Commitments and contingencies (NOTES 2 and 9)		—		—
Total liabilities and equity	$	5,116,862	$	4,650,975

See accompanying notes to condensed consolidated financial statements.

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Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(In thousands, except per share data)

(Unaudited)


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues
Loan origination and debt brokerage fees, net	$	123,242	$	83,825	$	306,593	$	238,105
Fair value of expected net cash flows from servicing, net		89,482		78,065		209,266		236,434
Servicing fees		70,628		60,265		205,658		172,561
Property sales broker fees		33,677		6,756		65,173		19,928
Net warehouse interest income		5,583		7,558		14,768		22,454
Escrow earnings and other interest income		2,032		2,275		5,972		15,689
Other revenues		21,646		8,272		44,559		28,827
Total revenues	$	346,290	$	247,016	$	851,989	$	733,998

Expenses
Personnel	$	170,181	$	114,548	$	407,817	$	310,993
Amortization and depreciation		53,498		41,919		148,879		123,998
Provision (benefit) for credit losses		1,266		3,483		(14,380)		32,029
Interest expense on corporate debt		1,766		1,786		5,291		6,724
Other operating expenses		24,836		16,165		62,171		47,324
Total expenses	$	251,547	$	177,901	$	609,778	$	521,068
Income from operations	$	94,743	$	69,115	$	242,211	$	212,930
Income tax expense		22,953		15,925		56,311		50,076
Net income before noncontrolling interests	$	71,790	$	53,190	$	185,900	$	162,854
Less: net income (loss) from noncontrolling interests		69		—		69		(224)
Walker & Dunlop net income	$	71,721	$	53,190	$	185,831	$	163,078
Net change in unrealized gains (losses) on pledged available-for-sale securities, net of taxes		159		1,219		769		731
Walker & Dunlop comprehensive income	$	71,880	$	54,409	$	186,600	$	163,809

Basic earnings per share (NOTE 10)	$	2.23	$	1.69	$	5.80	$	5.21
Diluted earnings per share (NOTE 10)	$	2.21	$	1.66	$	5.73	$	5.11

Basic weighted-average shares outstanding		31,064		30,560		30,969		30,379
Diluted weighted-average shares outstanding		31,459		31,074		31,367		30,995

See accompanying notes to condensed consolidated financial statements.

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Walker & Dunlop, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(In thousands, except per share data)

(Unaudited)


	For the three and nine months ended September 30, 2021
	Common Stock							Retained		Noncontrolling		Total Stockholders'
	Shares	Amount		APIC		AOCI		Earnings		Interests		Equity
Balance at December 31, 2020	30,678	$	307	$	241,004	$	1,968	$	952,943	$	—	$	1,196,222
Walker & Dunlop net income	—		—		—		—		58,052		—		58,052
Other comprehensive income (loss), net of tax	—		—		—		(158)		—		—		(158)
Stock-based compensation - equity classified	—		—		7,836		—		—		—		7,836
Issuance of common stock in connection with equity compensation plans	430		4		12,602		—		—		—		12,606
Repurchase and retirement of common stock	(131)		(1)		(13,373)		—		—		—		(13,374)
Cash dividends paid ($0.50 per common share)	—		—		—		—		(16,052)		—		(16,052)
Balance at March 31, 2021	30,977	$	310	$	248,069	$	1,810	$	994,943	$	—	$	1,245,132
Walker & Dunlop net income	—		—		—		—		56,058		—		56,058
Other comprehensive income (loss), net of tax	—		—		—		768		—		—		768
Stock-based compensation - equity classified	—		—		7,892		—		—		—		7,892
Issuance of common stock in connection with equity compensation plans	64		1		530		—		—		—		531
Repurchase and retirement of common stock	(7)		(1)		(815)		—		—		—		(816)
Cash dividends paid ($0.50 per common share)	—		—		—		—		(16,070)		—		(16,070)
Balance at June 30, 2021	31,034	$	310	$	255,676	$	2,578	$	1,034,931	$	—	$	1,293,495
Walker & Dunlop net income	—		—		—		—		71,721		—		71,721
Net income (loss) from noncontrolling interests	—		—		—		—		—		69		69
Other comprehensive income (loss), net of tax	—		—		—		159		—		—		159
Stock-based compensation - equity classified	—		—		10,426		—		—		—		10,426
Issuance of common stock in connection with equity compensation plans	124		2		1,706		—		—		—		1,708
Issuance of common stock in connection with acquisitions	50		1		5,249								5,250
Repurchase and retirement of common stock	(14)		(1)		(1,495)		—		—		—		(1,496)
Noncontrolling interests from acquisitions	—		—		—		—		—		18,750		18,750
Cash dividends paid ($0.50 per common share)	—		—		—		—		(16,146)		—		(16,146)
Balance at September 30, 2021	31,194	$	312	$	271,562	$	2,737	$	1,090,506	$	18,819	$	1,383,936

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Walker & Dunlop, Inc. and Subsidiaries

Consolidated Statements of Changes in Equity

(In thousands, except per share data)

(Unaudited)


	For the three and nine months ended September 30, 2020
		Stockholders' Equity
	Common Stock							Retained		Noncontrolling		Total
	Shares	Amount		APIC		AOCI		Earnings		Interests		Equity
Balance at December 31, 2019	30,035	$	300	$	237,877	$	737	$	796,775	$	6,596	$	1,042,285
Cumulative-effect adjustment for adoption of ASU 2016-13, net of tax	—		—		—		—		(23,678)		—		(23,678)
Walker & Dunlop net income	—		—		—		—		47,829		—		47,829
Net loss from noncontrolling interests	—		—		—		—		—		(224)		(224)
Contributions from noncontrolling interests											675		675
Other comprehensive income (loss), net of tax	—		—		—		(1,918)		—		—		(1,918)
Stock-based compensation - equity classified	—		—		5,061		—		—		—		5,061
Issuance of common stock in connection with equity compensation plans	675		7		11,362		—		—		—		11,369
Repurchase and retirement of common stock	(380)		(4)		(18,293)		—		(8,440)		—		(26,737)
Cash dividends paid ($0.36 per common share)	—		—		—		—		(11,347)		—		(11,347)
Balance at March 31, 2020	30,330	$	303	$	236,007	$	(1,181)	$	801,139	$	7,047	$	1,043,315
Walker & Dunlop net income	—		—		—		—		62,059		—		62,059
Purchase of noncontrolling interests	—		—		(3,295)		—		—		(7,047)		(10,342)
Other comprehensive income (loss), net of tax	—		—		—		1,430		—		—		1,430
Stock-based compensation - equity classified	—		—		5,592		—		—		—		5,592
Issuance of common stock in connection with equity compensation plans	50		1		195		—		—		—		196
Repurchase and retirement of common stock	(11)		—		(405)		—		—		—		(405)
Cash dividends paid ($0.36 per common share)	—		—		—		—		(11,294)		—		(11,294)
Balance at June 30, 2020	30,369	$	304	$	238,094	$	249	$	851,904	$	—	$	1,090,551
Walker & Dunlop net income	—		—		—		—		53,190		—		53,190
Purchase of noncontrolling interests	—		—		(21,635)		—		—		—		(21,635)
Other comprehensive income (loss), net of tax	—		—		—		1,219		—		—		1,219
Stock-based compensation - equity classified	—		—		6,598		—		—		—		6,598
Issuance of common stock in connection with equity compensation plans and purchase of noncontrolling interests	574		5		11,923		—		—		—		11,928
Repurchase and retirement of common stock	(324)		(3)		(4,678)		—		(10,702)		—		(15,383)
Cash dividends paid ($0.36 per common share)	—		—		—		—		(11,343)		—		(11,343)
Balance at September 30, 2020	30,619	$	306	$	230,302	$	1,468	$	883,049	$	—	$	1,115,125

See accompanying notes to condensed consolidated financial statements.

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Walker & Dunlop, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	For the nine months ended September 30,
	2021		2020
Cash flows from operating activities
Net income before noncontrolling interests	$	185,900	$	162,854
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gains attributable to the fair value of future servicing rights, net of guaranty obligation		(209,266)		(236,434)
Change in the fair value of premiums and origination fees		6,909		(24,393)
Amortization and depreciation		148,879		123,998
Provision (benefit) for credit losses		(14,380)		32,029
Originations of loans held for sale		(12,761,432)		(15,923,846)
Proceeds from transfers of loans held for sale		12,459,511		13,517,432
Other operating activities, net		(13,100)		51,492
Net cash provided by (used in) operating activities	$	(196,979)	$	(2,296,868)

Cash flows from investing activities
Capital expenditures	$	(5,507)	$	(2,050)
Purchases of equity-method investments		(8,029)		(974)
Purchases of pledged available-for-sale ("AFS") securities		(7,250)		(14,130)
Proceeds from prepayment and sale of pledged AFS securities		28,781		15,531
Investments in joint ventures		(58,065)		(16,215)
Distributions from joint ventures		34,012		12,677
Acquisitions, net of cash received		(62,208)		(46,784)
Originations of loans held for investment		(269,737)		(36,950)
Principal collected on loans held for investment		397,328		236,519
Net cash provided by (used in) investing activities	$	49,325	$	147,624

Cash flows from financing activities
Borrowings (repayments) of warehouse notes payable, net	$	333,887	$	2,497,627
Borrowings of interim warehouse notes payable		154,661		34,028
Repayments of interim warehouse notes payable		(157,277)		(109,860)
Repayments of note payable		(2,234)		(2,234)
Repayment of secured borrowings		(73,312)		—
Proceeds from issuance of common stock		5,256		12,587
Repurchase of common stock		(15,686)		(42,525)
Purchase of noncontrolling interests		—		(10,400)
Cash dividends paid		(48,268)		(33,984)
Payment of contingent consideration		—		(1,641)
Debt issuance costs		(2,762)		(2,340)
Net cash provided by (used in) financing activities	$	194,265	$	2,341,258

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents (NOTE 2)	$	46,611	$	192,014
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period		358,002		136,566
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	404,613	$	328,580

Supplemental Disclosure of Cash Flow Information:
Cash paid to third parties for interest	$	24,906	$	33,116
Cash paid for income taxes		38,728		21,437

See accompanying notes to condensed consolidated financial statements.

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NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

These financial statements represent the condensed consolidated financial position and results of operations of Walker & Dunlop, Inc. and its subsidiaries. Unless the context otherwise requires, references to “we,” “us,” “our,” “Walker & Dunlop” and the “Company” mean the Walker & Dunlop consolidated companies. The statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they may not include certain financial statement disclosures and other information required for annual financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results for the Company in the interim periods presented have been included. Results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or thereafter.

Walker & Dunlop, Inc. is a holding company and conducts the majority of its operations through Walker & Dunlop, LLC, the operating company. Walker & Dunlop is one of the leading commercial real estate services and finance companies in the United States. The Company originates, sells, and services a range of commercial real estate debt and equity financing products, provides multifamily property sales brokerage and valuation services, engages in commercial real estate investment management activities, provides housing market research, and delivers real estate-related investment banking and advisory services.

Through its agency lending products, the Company originates and sells loans pursuant to the programs of the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac” and, together with Fannie Mae, the “GSEs”), the Government National Mortgage Association (“Ginnie Mae”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”). Through its debt brokerage products, the Company brokers, and in some cases services, loans for various life insurance companies, commercial banks, commercial mortgage-backed securities issuers, and other institutional investors, in which cases the Company does not fund the loan.

The Company also provides a variety of commercial real estate debt and equity solutions through its principal lending and investing products, including interim loans, and preferred and joint venture equity on commercial real estate properties. Interim loans on multifamily properties are offered (i) through the Company and recorded on the Company’s balance sheet (the “Interim Loan Program”) and (ii) through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., in which the Company holds a 15% ownership interest (the “Interim Program JV”). Interim loans on all commercial real estate property types are also offered through separate accounts managed by the Company’s subsidiary, Walker & Dunlop Investment Partners, Inc. (“WDIP”). Preferred and joint venture equity products on commercial real estate properties are offered through funds managed by WDIP.

The Company brokers the sale of multifamily properties through its wholly owned subsidiary, Walker & Dunlop Investment Sales, LLC. In some cases, the Company also provides the debt financing for the property sale.

The Company has a joint venture, branded as “Apprise by Walker & Dunlop,” with an international technology services company to offer automated multifamily valuation and appraisal services (the “Appraisal JV”). The Appraisal JV leverages technology and data science to dramatically improve the consistency, transparency, and speed of multifamily appraisals in the U.S. through the licensing of the partner’s technology and leveraging of the Company’s expertise in the commercial real estate industry. The Company owns a 50% interest in the Appraisal JV and accounts for the interest as an equity-method investment. The operations of the Appraisal JV for the three and nine months ended September 30, 2021 and 2020 were immaterial.

During the third quarter of 2021, the Company acquired certain assets and assumed certain liabilities of Zelman Holdings, LLC (“Zelman”) through a 75% interest in a newly formed entity, which does business as Zelman & Associates. Zelman & Associates provides housing market research and real estate-related investment banking and advisory services.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation—The condensed consolidated financial statements include the accounts of Walker & Dunlop, Inc., its wholly owned subsidiaries, and its majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or the voting

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interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity. If the Company does not have a majority voting interest but has significant influence, it uses the equity method of accounting. In instances where the Company owns less than 100% of the equity interests of an entity but owns a majority of the voting interests or has control over an entity, the Company accounts for the portion of equity not attributable to Walker & Dunlop, Inc. as Noncontrolling interests on the Condensed Consolidated Balance Sheets and the portion of net income not attributable to Walker & Dunlop, Inc. as Net income (loss) from noncontrolling interests in the Condensed Consolidated Statements of Income.

Subsequent Events—The Company has evaluated the effects of all events that have occurred subsequent to September 30, 2021. The Company has made certain disclosures in the notes to the condensed consolidated financial statements of events that have occurred subsequent to September 30, 2021. There have been no other material subsequent events that would require recognition in the condensed consolidated financial statements.

Use of Estimates—The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, allowance for risk-sharing obligations, capitalized mortgage servicing rights, derivative instruments, and the disclosure of contingent liabilities. Actual results may vary from these estimates.

Derivative Assets and Liabilities—Loan commitments that meet the definition of a derivative are recorded at fair value on the Condensed Consolidated Balance Sheets upon the executions of the commitments to originate a loan with a borrower and to sell the loan to an investor, with a corresponding amount recognized as revenue in the Condensed Consolidated Statements of Income. The estimated fair value of loan commitments includes (i) the fair value of loan origination fees and premiums on the anticipated sale of the loan, net of co-broker fees (included in Derivative assets on the Condensed Consolidated Balance Sheets and as a component of Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income), (ii) the fair value of the expected net cash flows associated with the servicing of the loan, net of any estimated net future cash flows associated with the guaranty obligation (included in Derivative assets on the Condensed Consolidated Balance Sheets and in Fair value of expected net cash flows from servicing, net in the Condensed Consolidated Statements of Income), and (iii) the effects of interest rate movements between the trade date and balance sheet date. Loan commitments are generally derivative assets but can become derivative liabilities if the effects of the interest rate movement between the trade date and the balance sheet date are greater than the combination of (i) and (ii) above. Forward sale commitments that meet the definition of a derivative are recorded as either derivative assets or derivative liabilities depending on the effects of the interest rate movements between the trade date and the balance sheet date. Adjustments to the fair value are reflected as a component of income within Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income.

Co-broker fees, which are netted against Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income, were $6.3 million and $5.1 million for the three months ended September 30, 2021 and 2020, respectively, and $15.2 million and $20.4 million for the nine months ended September 30, 2021 and 2020, respectively.

Loans Held for Investment, net—Loans held for investment are multifamily loans originated by the Company through the Interim Loan Program for properties that currently do not qualify for permanent GSE or HUD (collectively, the “Agencies”) financing. These loans have terms of up to three years and are all adjustable-rate, interest-only, multifamily loans with similar risk characteristics and no geographic concentration. The loans are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs, and net of any allowance for loan losses.

As of September 30, 2021, Loans held for investment, net consisted of nine loans with an aggregate $238.7 million of unpaid principal balance less $0.9 million of net unamortized deferred fees and costs and $4.1 million of allowance for loan losses. As of December 31, 2020, Loans held for investment, net consisted of 18 loans with an aggregate $366.3 million of unpaid principal balance less $1.1 million of net unamortized deferred fees and costs and $4.8 million of allowance for loan losses.

During the third quarter of 2018, the Company transferred a portfolio of participating interests in loans held for investment to a third party that was paid off in the second quarter of 2021. The Company accounted for the transfer as a secured borrowing, with the aggregate unpaid principal balance of the loans of $81.5 million presented as a component of Loans held for investment, net and the secured borrowing of $73.3 million presented within Other liabilities on the Condensed Consolidated Balance Sheets as of December 31, 2020.

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The Company assesses the credit quality of loans held for investment in the same manner as it does for the loans in the Fannie Mae at-risk portfolio and records an allowance for these loans as necessary. The allowance for loan losses is estimated collectively for loans with similar characteristics. The collective allowance is based on the same methodology that the Company uses to estimate its allowance for risk-sharing obligations under the Current Expected Credit Losses (“CECL”) standard for at-risk Fannie Mae Delegated Underwriting and Servicing (“DUS”) loans (with the exception of a reversion period) because the nature of the underlying collateral is the same, and the loans have similar characteristics, except they are significantly shorter in maturity. The reasonable and supportable forecast period used for the CECL allowance for loans held for investment is one year.

The loss rate for the forecast period was 15 basis points and 36 basis points as of September 30, 2021 and December 31, 2020, respectively. The loss rate for the remaining period until maturity was nine basis points as of both September 30, 2021 and December 31, 2020.

One loan held for investment with an unpaid principal balance of $14.7 million that was originated in 2017 was delinquent and on non-accrual status as of September 30, 2021 and December 31, 2020. The Company had a $3.7 million reserve for this loan based on its collateral fair value as of September 30, 2021 and December 31, 2020 and has not recorded any interest related to this loan since it went on non-accrual status in 2019. All other loans were current as of September 30, 2021 and December 31, 2020. The amortized cost basis of loans that were current as of September 30, 2021 and December 31, 2020 was $223.1 million and $350.5 million, respectively. As of September 30, 2021, $195.7 million and $28.3 million of the loans that were current were originated in 2021 and 2019, respectively. No loans originated in 2020 were outstanding as of September 30, 2021. Prior to 2019, the Company had not experienced any delinquencies related to loans held for investment.

Provision (Benefit) for Credit Losses—The Company records the income statement impact of the changes in the allowance for loan losses and the allowance for risk-sharing obligations within Provision (benefit) for credit losses in the Condensed Consolidated Statements of Income. NOTE 4 contains additional discussion related to the allowance for risk-sharing obligations. Provision (benefit) for credit losses consisted of the following activity for the three and nine months ended September 30, 2021 and 2020:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Components of Provision (Benefit) for Credit Losses (in thousands)	2021		2020		2021		2020
Provision (benefit) for loan losses	$	(12)	$	2,179	$	(674)	$	3,107
Provision (benefit) for risk-sharing obligations		1,278		1,304		(13,706)		28,922
Provision (benefit) for credit losses	$	1,266	$	3,483	$	(14,380)	$	32,029

Net Warehouse Interest Income—The Company presents warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of the Company’s loans is financed with matched borrowings under one of its warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with the Company’s own cash. The Company also occasionally fully funds a small number of loans held for sale or loans held for investment with its own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. Included in Net warehouse interest income for the three and nine months ended September 30, 2021 and 2020 are the following components:

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	For the three months ended				For the nine months ended
	September 30,				September 30,
Components of Net Warehouse Interest Income (in thousands)	2021		2020		2021		2020
Warehouse interest income - loans held for sale	$	11,334	$	12,649	$	28,315	$	37,150
Warehouse interest expense - loans held for sale		(7,611)		(7,780)		(19,249)		(24,475)
Net warehouse interest income - loans held for sale	$	3,723	$	4,869	$	9,066	$	12,675

Warehouse interest income - loans held for investment	$	3,108	$	4,015	$	9,298	$	15,083
Warehouse interest expense - loans held for investment		(1,248)		(1,326)		(3,596)		(5,304)
Warehouse interest income - secured borrowings		—		869		1,748		2,564
Warehouse interest expense - secured borrowings		—		(869)		(1,748)		(2,564)
Net warehouse interest income - loans held for investment	$	1,860	$	2,689	$	5,702	$	9,779

Total net warehouse interest income	$	5,583	$	7,558	$	14,768	$	22,454

Statement of Cash Flows—For presentation in the Condensed Consolidated Statements of Cash Flows, the Company considers pledged cash and cash equivalents (as detailed in NOTE 9) to be restricted cash and restricted cash equivalents. The following table presents a reconciliation of the total cash, cash equivalents, restricted cash, and restricted cash equivalents as presented in the Condensed Consolidated Statements of Cash Flows to the related captions in the Condensed Consolidated Balance Sheets as of September 30, 2021 and 2020 and December 31, 2020 and 2019.


	September 30,				December 31,
(in thousands)	2021		2020		2020		2019
Cash and cash equivalents	$	318,188	$	294,873	$	321,097	$	120,685
Restricted cash		34,875		12,383		19,432		8,677
Pledged cash and cash equivalents (NOTE 9)		51,550		21,324		17,473		7,204
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	404,613	$	328,580	$	358,002	$	136,566

Income Taxes—The Company records the realizable excess tax benefits from stock-based compensation as a reduction to income tax expense. The realizable excess tax benefits were $2.1 million and $3.0 million for the three months ended September 30, 2021 and 2020, respectively, and $7.3 million and $6.0 million during the nine months ended September 30, 2021 and 2020, respectively.

Contracts with Customers—A majority of the Company’s revenues are derived from the following sources, all of which are excluded from the accounting provisions applicable to contracts with customers: (i) financial instruments, (ii) transfers and servicing, (iii) derivative transactions, and (iv) investments in debt securities/equity-method investments. The remaining portion of revenues is derived from contracts with customers. The Company’s contracts with customers do not require significant judgment or material estimates that affect the determination of the transaction price (including the assessment of variable consideration), the allocation of the transaction price to performance obligations, and the determination of the timing of the satisfaction of performance obligations. Additionally, the earnings process for the Company’s contracts with customers is not complicated and is generally completed in a short period of time. The following table presents information about the Company’s contracts with customers for the three and nine months ended September 30, 2021 and 2020:

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	For the three months ended				For the nine months ended
	September 30,				September 30,
Description (in thousands)	2021		2020		2021		2020		Statement of income line item
Certain loan origination fees	$	46,527	$	10,731	$	113,650	$	40,769	Loan origination and debt brokerage fees, net
Property sales broker fees		33,677		6,756		65,173		19,928	Property sales broker fees
Investment management fees, application fees, subscription revenues, and other		10,936		4,532		25,114		14,632	Other revenues
Total revenues derived from contracts with customers	$	91,140	$	22,019	$	203,937	$	75,329

Litigation—In the ordinary course of business, the Company may be party to various claims and litigation, none of which the Company believes is material. The Company cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties, and other costs, and the Company’s reputation and business may be impacted. The Company believes that any liability that could be imposed on the Company in connection with the disposition of any pending lawsuits would not have a material adverse effect on its business, results of operations, liquidity, or financial condition.

Recently Adopted and Recently Announced Accounting Pronouncements—There have been no material changes to the accounting policies discussed in NOTE 2 of the Company’s 2020 Form 10-K. There are no recently announced but not yet effective accounting pronouncements that are expected to have a material impact to the Company as of September 30, 2021.

Reclassifications—The Company has made certain immaterial reclassifications to prior-year balances to conform to current-year presentations.

NOTE 3—MORTGAGE SERVICING RIGHTS

The fair value of the mortgage servicing rights (“MSRs”) as of September 30, 2021 and December 31, 2020 was $1.2 billion and $1.1 billion, respectively. The Company uses a discounted static cash flow valuation approach, and the key economic assumption is the discount rate. For example, see the following sensitivities:

The impact of a 100-basis point increase in the discount rate at September 30, 2021 would be a decrease in the fair value of $37.2 million to the MSRs outstanding as of September 30, 2021.

The impact of a 200-basis point increase in the discount rate at September 30, 2021 would be a decrease in the fair value of $72.0 million to the MSRs outstanding as September 30, 2021.

These sensitivities are hypothetical and should be used with caution. These estimates do not include interplay among assumptions and are estimated as a portfolio rather than individual assets.

Activity related to MSRs for the three and nine months ended September 30, 2021 and 2020 follows:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Roll Forward of MSRs (in thousands)	2021		2020		2021		2020
Beginning balance	$	915,519	$	778,269	$	862,813	$	718,799
Additions, following the sale of loan		70,095		71,485		224,035		215,288
Amortization		(44,402)		(38,319)		(130,868)		(110,243)

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Pre-payments and write-offs			(11,387)			(5,780)			(26,155)			(18,189)
Ending balance		$	929,825		$	805,655		$	929,825		$	805,655

The following table summarizes the gross value, accumulated amortization, and net carrying value of the Company’s MSRs as of September 30, 2021 and December 31, 2020:


Components of MSRs (in thousands)	September 30, 2021		December 31, 2020
Gross value	$	1,521,190	$	1,394,901
Accumulated amortization		(591,365)		(532,088)
Net carrying value	$	929,825	$	862,813

The expected amortization of MSRs held in the Condensed Consolidated Balance Sheet as of September 30, 2021 is shown in the table below. Actual amortization may vary from these estimates.


	Expected
(in thousands)	Amortization
Three Months Ending December 31,
2021	$	43,927
Year Ending December 31,
2022	$	167,770
2023		155,112
2024		134,111
2025		113,562
2026		93,833
Thereafter		221,510
Total	$	929,825

NOTE 4—GUARANTY OBLIGATION AND ALLOWANCE FOR RISK-SHARING OBLIGATIONS

When a loan is sold under the Fannie Mae DUS program, the Company typically agrees to guarantee a portion of the ultimate loss incurred on the loan should the borrower fail to perform. The compensation for this risk is a component of the servicing fee on the loan. The guaranty is in force while the loan is outstanding. The Company does not provide a guaranty for any other loan product it sells or brokers. Activity related to the guaranty obligation for the three and nine months ended September 30, 2021 and 2020 is presented in the following table:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Roll Forward of Guaranty Obligation (in thousands)	2021		2020		2021		2020
Beginning balance	$	50,369	$	54,872	$	52,306	$	54,695
Additions, following the sale of loan		1,449		876		4,023		4,346
Amortization		(2,758)		(2,274)		(7,269)		(7,035)
Other		—		—		—		1,468
Ending balance	$	49,060	$	53,474	$	49,060	$	53,474

Substantially all loans sold under the Fannie Mae DUS program contain partial or full risk-sharing guaranties that are based on the credit performance of the loan. The Company records an estimate of the loss reserve for CECL for all loans in its Fannie Mae at-risk servicing portfolio and presents this loss reserve as Allowance for risk-sharing obligations on the Condensed Consolidated Balance Sheets. The Company utilizes the weighted-average remaining maturity (“WARM”) method to calculate the CECL reserve and one year for the reasonable and supportable forecast period (the “forecast period”), as the Company currently believes forecasts beyond one year are inherently less reliable. The WARM method uses an average annual charge-off rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the CECL reserve. The Company reverts to a historical loss rate over a one-year period. For all remaining years until

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maturity, the Company uses the historical weighted-average annual charge-off rate to estimate losses. The average annual charge-off rate is applied to the unpaid principal balance over the contractual term, further adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio.

Activity related to the allowance for risk-sharing obligations for the three and nine months ended September 30, 2021 and 2020 follows:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Roll Forward of Allowance for Risk-Sharing Obligations (in thousands)	2021		2020		2021		2020
Beginning balance	$	60,329	$	69,191	$	75,313	$	11,471
Adjustment related to adoption of CECL		—		—		—		31,570
Provision (benefit) for risk-sharing obligations		1,278		1,304		(13,706)		28,922
Write-offs		—		—		—		—
Other		—		—		—		(1,468)
Ending balance	$	61,607	$	70,495	$	61,607	$	70,495

As a result of the onset of the pandemic and the resulting forecasts for significant unemployment rates during 2020, the Company’s loss rate for the forecast period was seven basis points as of September 30, 2020, resulting in the substantial provision for risk-sharing obligations for the nine months ended September 30, 2020 and an increase in the allowance for risk-sharing obligations as of September 30, 2020 as seen above. During the first three quarters of 2021, economic conditions have improved significantly compared to the same period in 2020, with reported and forecast unemployment rates significantly better compared to both December 31, 2020 and September 30, 2020. In response to improving unemployment statistics and the current and expected overall health of the multifamily market, the Company adjusted the loss rate for the forecast period from six basis points as of December 31, 2020 to three basis points as of both June 30, 2021 and September 30, 2021. The decrease in the loss rate resulted in the benefit for risk-sharing obligations seen above for the nine months ended September 30, 2021. The provision for risk-sharing obligations for the three months ended September 30, 2021 was a result of growth in the at-risk servicing portfolio. For the remaining expected life of the portfolio, the Company reverted over a one-year period on a straight-line basis to a historical loss rate of just under two basis points for all periods shown in the roll forward above.

The calculated CECL reserve for the Company’s $47.0 billion at-risk Fannie Mae servicing portfolio as of September 30, 2021 was $54.0 million compared to $67.0 million as of December 31, 2020. The weighted-average remaining life of the at-risk Fannie Mae servicing portfolio as of September 30, 2021 was 7.5 years. The at-risk Fannie Mae servicing portfolio does not include at-risk loans held for sale.

Two loans that defaulted in 2019 had aggregate collateral-based reserves of $7.6 million and $8.3 million as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, the maximum quantifiable contingent liability associated with the Company’s guaranties for the at-risk loans serviced under the Fannie Mae DUS agreement was $9.8 billion. The maximum quantifiable contingent liability is not representative of the actual loss the Company would incur. The Company would be liable for this amount only if all of the loans it services for Fannie Mae, for which the Company retains some risk of loss, were to default and all of the collateral underlying these loans were determined to be without value at the time of settlement.

NOTE 5—SERVICING

The total unpaid principal balance of loans the Company was servicing for various institutional investors was $113.9 billion as of September 30, 2021 compared to $107.2 billion as of December 31, 2020.

As of September 30, 2021 and December 31, 2020, custodial escrow accounts relating to loans serviced by the Company totaled $3.0 billion and $3.1 billion, respectively. These amounts are not included in the Condensed Consolidated Balance Sheets as such amounts are not Company assets; however, the Company is entitled to earn interest income on these escrow balances, presented as a component of Escrow earnings and other interest income in the Condensed Consolidated Statements of Income. Certain cash deposits at other financial institutions

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exceed the Federal Deposit Insurance Corporation insured limits. The Company places these deposits with financial institutions that meet the requirements of the Agencies and where it believes the risk of loss to be minimal.

NOTE 6—WAREHOUSE NOTES PAYABLE

As of September 30, 2021, to provide financing to borrowers under the Agencies’ programs, the Company has committed and uncommitted warehouse lines of credit in the amount of $4.1 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). In support of these Agency Warehouse Facilities, the Company has pledged substantially all of its loans held for sale under the Company’s approved programs. The Company’s ability to originate mortgage loans for sale depends upon its ability to secure and maintain these types of short-term financings on acceptable terms.

Additionally, as of September 30, 2021, the Company has arranged for warehouse lines of credit in the amount of $0.5 billion with certain national banks to assist in funding loans held for investment under the Interim Loan Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The Company’s ability to originate loans held for investment depends upon its ability to secure and maintain these types of short-term financings on acceptable terms.

The maximum amount and outstanding borrowings under Warehouse notes payable at September 30, 2021 follows:


	September 30, 2021
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility⁽¹⁾	Amount		Amount		Capacity		Balance		Interest rate⁽²⁾
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	277,872	30-day LIBOR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		346,047	30-day LIBOR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		378,624	30-day LIBOR plus 1.30%
Agency Warehouse Facility #4		350,000		—		350,000		136,616	30-day LIBOR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		885,308	30-day LIBOR plus 1.45%
Agency Warehouse Facility #6		150,000		100,000		250,000		118,124	30-day LIBOR plus 1.40%
Agency Warehouse Facility #7		150,000		50,000		200,000		92,293	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,375,000	$	1,715,000	$	4,090,000	$	2,234,884
Fannie Mae repurchase agreement, uncommitted line and open maturity		—		1,500,000		1,500,000		482,861
Total Agency Warehouse Facilities	$	2,375,000	$	3,215,000	$	5,590,000	$	2,717,745

Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	30-day LIBOR plus 1.90%
Interim Warehouse Facility #2		100,000		—		100,000		—	30-day LIBOR plus 1.65% to 2.00%
Interim Warehouse Facility #3		200,000		—		200,000		111,817	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities	$	454,810	$	—	$	454,810	$	131,627
Debt issuance costs		—		—		—		(793)
Total warehouse facilities	$	2,829,810	$	3,215,000	$	6,044,810	$	2,848,579

(1)	Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment.

(2)	Interest rate presented does not include the effect of interest rate floors.

The following amendments to the Agency Warehouse Facilities were executed in the normal course of business to support the growth of the Company’s Agency business.

During the second quarter of 2021, the Company executed an amendment to the agreement related to Agency Warehouse Facility #1 that decreased the borrowing rate to 30-day London Interbank Offered Rate (“LIBOR”) plus 130 basis points from 30-day LIBOR plus 140 basis points and decreased the 30-day LIBOR floor to zero from 25 basis points. In October 2021, the Company executed an amendment to the agreement that extended the maturity date to December 24, 2021. No other material modifications have been made to the agreement during 2021.

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During the second quarter of 2021, the Company executed amendments to the agreement related to Agency Warehouse Facility #2 that extended the maturity date to April 14, 2022 and decreased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 140 basis points. No other material modifications have been made to the agreement during 2021.

During the second quarter of 2021, the Company executed amendments to the agreement related to Agency Warehouse Facility #3 that extended the maturity date to May 14, 2022, increased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 115 basis points, and decreased the 30-day LIBOR floor to zero basis points from 50 basis points. No other material modifications have been made to the agreement during 2021.

During the second quarter of 2021, the Company executed an amendment to the agreement related to Agency Warehouse Facility #4 that extended the maturity date to June 22, 2022, decreased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 140 basis points, and decreased the 30-day LIBOR floor to five basis points from 25 basis points. No other material modifications have been made to the agreement during 2021.

During the third quarter of 2021, the Company executed amendments to the agreement related to Agency Warehouse Facility #5 that extended the maturity date to September 15, 2022. No other material modifications have been made to the agreement during 2021.

During the first quarter of 2021, the Company executed an agreement to establish Agency Warehouse Facility #6. The warehouse facility has a $150.0 million maximum committed borrowing capacity, provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans, and matures on March 5, 2022. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 140 basis points with a 30-day LIBOR floor of 25 basis points. In addition to the committed borrowing capacity, the agreement provides $100.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. The facility agreement requires the Company’s compliance with the same financial covenants as provided in the facility agreement for Agency Warehouse Facility #1, as described in the Company’s 2020 Form 10-K. No material modifications have been made to the agreement during 2021.

During the third quarter of 2021, the Company executed an agreement to establish Agency Warehouse Facility #7. The warehouse facility has a $150.0 million maximum committed borrowing capacity, provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans, and matures on August 24, 2022. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $50.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. The facility agreement requires the Company’s compliance with the same financial covenants as provided in the facility agreement for Agency Warehouse Facility #1, as described in the Company’s 2020 Form 10-K. No material modifications have been made to the agreement during 2021.

During the second quarter of 2021, the Company executed amendments to the agreement related to Interim Warehouse Facility #1 that extended the maturity date to May 14, 2022 and decreased the 30-day LIBOR floor to zero basis points from 50 basis points. No other material modifications have been made to the agreement during 2021.

During the third quarter of 2021, the Company executed an amendment to the agreement related to Interim Warehouse Facility #3 that extended the maturity date to September 29, 2022, increased the committed borrowing capacity to $200.0 million, and eliminated the uncommitted borrowing capacity. No other material modifications have been made to the agreement during 2021.

In October 2021, the Company executed an amendment related to Interim Warehouse Facility #4 that extended the stated maturity date to October 1, 2022. No other material modifications have been made to the agreement during 2021.

The warehouse notes payable are subject to various financial covenants, all of which the Company was in compliance with as of September 30, 2021.

Interest on the Company’s warehouse notes payable is based on 30-day LIBOR. As a result of the expected transition from LIBOR, the Company has updated its debt agreements to include fallback language to govern the transition from 30-day LIBOR to an alternative reference rate.

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NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS

A summary of the Company’s goodwill for the nine months ended September 30, 2021 and 2020 follows:


	For the nine months ended
	September 30,
Roll Forward of Goodwill (in thousands)	2021		2020
Beginning balance	$	248,958	$	180,424
Additions from acquisitions		84,291		68,534
Impairment		—		—
Ending balance	$	333,249	$	248,958

The additions to goodwill from acquisitions during 2021 shown in the table above during the nine months ended September 30, 2021 relate to the following immaterial acquisitions:



Detail of Acquisition Activity (in thousands)
	Acquisition		Purchase Consideration								Assets	Liabilities		Noncontrolling		Goodwill
Acquisition	Date	Cash		Stock		Contingent		Total			Acquired	Assumed		Interest		Recognized
Acquisition #1	Q1 2021	$	7,506	$	—	$	5,229	$	12,735	$	504	$	—	$	—	$	12,231
Acquisition #2	Q2 2021		3,000		—		2,275		5,275		—		—		—		5,275
Acquisition #3	Q3 2021		53,420		5,250		—		58,670		16,521		5,886		18,750		66,785
Total		$	63,926	$	5,250	$	7,504	$	76,680	$	17,025	$	5,886	$	18,750	$	84,291

The assets acquired and liabilities assumed presented above were recorded at fair value. Acquisition #1 relates to a property sales brokerage company. Acquisition #2 relates to a company with a technology platform that streamlines and accelerates the quoting, processing, and underwriting of small-balance multifamily loans while providing the borrower with a web-based, user-friendly interface. The acquisition is part of the Company’s overall strategy to significantly increase its small-balance lending volumes using technology. Acquisition #3 relates to the purchase of a 75% controlling interest in Zelman, which specializes in housing market research and real estate-related investment banking and advisory services. The assets acquired for Acquisition #3 include $8.2 million of intangible assets. As of September 30, 2021, the Company completed the purchase accounting for Acquisitions #1 and #2. The purchase accounting for Acquisition #3 is pending the finalization of working capital adjustments in the fourth quarter of 2021, which are expected to be immaterial.

The stock consideration shown above is a non-cash transaction not impacting the amount of cash consideration paid on the Condensed Consolidated Statements of Cash Flows.

As of September 30, 2021 and December 31, 2020, the remaining balance of intangible assets from acquisitions totaled $8.5 million and $1.9 million, respectively. As of September 30, 2021, the weighted-average period over which the Company expects these intangible assets to be amortized is 5.4 years.

A summary of the Company’s contingent consideration liabilities, which are included in Other liabilities in the Condensed Consolidated Balance Sheets, as of and for the nine months ended September 30, 2021 and 2020 follows:


	For the nine months ended
	September 30,
Roll Forward of Contingent Consideration Liabilities (in thousands)	2021		2020
Beginning balance	$	28,829	$	5,752
Additions		7,504		27,645
Accretion		1,405		826
Payments		(6,080)		(5,800)
Ending balance	$	31,658	$	28,423

The contingent consideration liabilities above relate to (i) acquisitions of debt brokerage companies and an investment sales brokerage company completed over the past several years, including 2021, (ii) the purchase of noncontrolling interests in 2020 and (iii) the aforementioned

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technology company acquired in 2021. The contingent consideration for each of the acquisitions may be earned over various lengths of time after each acquisition, with a maximum earn-out period of five years, provided certain revenue targets and other metrics have been met. The last of the earn-out periods related to the contingent consideration ends in the first quarter of 2026. In each case, the Company estimated the initial fair value of the contingent consideration using a probability-based, discounted cash flow model.

The contingent consideration included for the acquisitions and purchase of noncontrolling interests is non-cash and thus not reflected in the amount of cash consideration paid on the Condensed Consolidated Statements of Cash Flows.

NOTE 8—FAIR VALUE MEASUREMENTS

The Company uses valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach to measure assets and liabilities that are measured at fair value. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. In that regard, accounting standards establish a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

●

Level 1—Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

●

Level 2—Financial assets and liabilities whose values are based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, discount rates, volatilities, prepayment speeds, earnings rates, credit risk, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

●

Level 3—Financial assets and liabilities whose values are based on inputs that are both unobservable and significant to the overall valuation.

The Company's MSRs are measured at fair value at inception, and thereafter on a nonrecurring basis. That is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement when there is evidence of impairment and for disclosure purposes (NOTE 3). The Company's MSRs do not trade in an active, open market with readily observable prices. While sales of multifamily MSRs do occur on occasion, precise terms and conditions vary with each transaction and are not readily available. Accordingly, the estimated fair value of the Company’s MSRs was developed using discounted cash flow models that calculate the present value of estimated future net servicing income. The model considers contractually specified servicing fees, prepayment assumptions, estimated revenue from escrow accounts, costs to service, and other economic factors. The Company periodically reassesses and adjusts, when necessary, the underlying inputs and assumptions used in the model to reflect observable market conditions and assumptions that market participants consider in valuing MSR assets. During the first quarter of 2021, the Company reduced the discount rate and escrow earnings rate assumptions for its capitalized MSRs based on market participant data. MSRs are carried at the lower of amortized cost or fair value.

A description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

●

Derivative Instruments—The derivative positions consist of interest rate lock commitments with borrowers and forward sale agreements to the Agencies. The fair value of these instruments is estimated using a discounted cash flow model developed based on changes in the applicable U.S. Treasury rate and other observable market data. The value was determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company, and are classified within Level 3 of the valuation hierarchy.

●

Loans Held for Sale—All loans held for sale presented in the Condensed Consolidated Balance Sheets are reported at fair value. The Company determines the fair value of the loans held for sale using discounted cash flow models that incorporate quoted

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observable inputs from market participants such as changes in the U.S. Treasury rate. Therefore, the Company classifies these loans held for sale as Level 2.

●

Pledged Securities—Investments in money market funds are valued using quoted market prices from recent trades. Therefore, the Company classifies this portion of pledged securities as Level 1. The Company determines the fair value of its AFS investments in Agency debt securities using discounted cash flows that incorporate observable inputs from market participants and then compares the fair value to broker estimates of fair value. Consequently, the Company classifies this portion of pledged securities as Level 2.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy used to measure fair value:


							Balance as of
(in thousands)	Level 1		Level 2		Level 3		Period End
September 30, 2021
Assets
Loans held for sale	$	—	$	2,711,900	$	—	$	2,711,900
Pledged securities		51,550		97,224		—		148,774
Derivative assets		—		—		85,486		85,486
Total	$	51,550	$	2,809,124	$	85,486	$	2,946,160

Liabilities
Derivative liabilities	$	—	$	—	$	13,263	$	13,263
Total	$	—	$	—	$	13,263	$	13,263

December 31, 2020
Assets
Loans held for sale	$	—	$	2,449,198	$	—	$	2,449,198
Pledged securities		17,473		119,763		—		137,236
Derivative assets		—		—		49,786		49,786
Total	$	17,473	$	2,568,961	$	49,786	$	2,636,220

Liabilities
Derivative liabilities	$	—	$	—	$	5,066	$	5,066
Total	$	—	$	—	$	5,066	$	5,066

There were no transfers between any of the levels within the fair value hierarchy during the nine months ended September 30, 2021.

Derivative instruments (Level 3) are outstanding for short periods of time (generally less than 60 days). A roll forward of derivative instruments is presented below for the three and nine months ended September 30, 2021 and 2020:


	Level 3 Fair Value Measurements:
	Derivative Instruments
	For the three months ended				For the nine months ended
	September 30,				September 30,
Derivative Assets and Liabilities, net (in thousands)	2021		2020		2021		2020
Beginning balance	$	6,340	$	13,346	$	44,720	$	15,532
Settlements		(146,841)		(141,804)		(488,356)		(456,639)
Realized gains recorded in earnings⁽¹⁾		140,501		128,458		443,636		441,107
Unrealized gains (losses) recorded in earnings⁽¹⁾		72,223		33,432		72,223		33,432
Ending balance	$	72,223	$	33,432	$	72,223	$	33,432

(1)	Realized and unrealized gains (losses) from derivatives are recognized in Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net in the Condensed Consolidated Statements of Income.

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The following table presents information about significant unobservable inputs used in the recurring measurement of the fair value of the Company’s Level 3 assets and liabilities as of September 30, 2021:


	Quantitative Information about Level 3 Fair Value Measurements
(in thousands)	Fair Value		Valuation Technique	Unobservable Input⁽¹⁾	Input Value ⁽¹⁾
Derivative assets	$	85,486	Discounted cash flow	Counterparty credit risk	—
Derivative liabilities	$	13,263	Discounted cash flow	Counterparty credit risk	—

(1)	Significant increases in this input may lead to significantly lower fair value measurements.

The carrying amounts and the fair values of the Company's financial instruments as of September 30, 2021 and December 31, 2020 are presented below:


	September 30, 2021				December 31, 2020
	Carrying		Fair		Carrying		Fair
(in thousands)	Amount		Value		Amount		Value
Financial Assets:
Cash and cash equivalents	$	318,188	$	318,188	$	321,097	$	321,097
Restricted cash		34,875		34,875		19,432		19,432
Pledged securities		148,774		148,774		137,236		137,236
Loans held for sale		2,711,900		2,711,900		2,449,198		2,449,198
Loans held for investment, net		233,685		234,996		360,402		362,586
Derivative assets		85,486		85,486		49,786		49,786
Total financial assets	$	3,532,908	$	3,534,219	$	3,337,151	$	3,339,335

Financial Liabilities:
Derivative liabilities	$	13,263	$	13,263	$	5,066	$	5,066
Secured borrowings		—		—		73,314		73,314
Warehouse notes payable		2,848,579		2,849,372		2,517,156		2,518,101
Note payable		289,763		292,539		291,593		294,773
Total financial liabilities	$	3,151,605	$	3,155,174	$	2,887,129	$	2,891,254

The following methods and assumptions were used for recurring fair value measurements as of September 30, 2021 and December 31, 2020.

Cash and Cash Equivalents and Restricted Cash—The carrying amounts approximate fair value because of the short maturity of these instruments (Level 1).

Pledged Securities—Consist of cash, highly liquid investments in money market accounts invested in government securities, and investments in Agency debt securities. The investments of the money market funds typically have maturities of 90 days or less and are valued using quoted market prices from recent trades. The fair value of the Agency debt securities incorporates the contractual cash flows of the security discounted at market-rate, risk-adjusted yields.

Loans Held for Sale—Consist of originated loans that are generally transferred or sold within 60 days from the date that a mortgage loan is funded and are valued using discounted cash flow models that incorporate observable prices from market participants.

Derivative Instruments—Consist of interest rate lock commitments and forward sale agreements. These instruments are valued using discounted cash flow models developed based on changes in the U.S. Treasury rate and other observable market data. The value is determined after considering the potential impact of collateralization, adjusted to reflect nonperformance risk of both the counterparty and the Company.

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Fair Value of Derivative Instruments and Loans Held for Sale—In the normal course of business, the Company enters into contractual commitments to originate and sell multifamily mortgage loans at fixed prices with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by the Company. All mortgagors are evaluated for creditworthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor.

To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into a sale commitment with the investor simultaneously with the rate lock commitment with the borrower. The sale contract with the investor locks in an interest rate and price for the sale of the loan. The terms of the contract with the investor and the rate lock with the borrower are matched in substantially all respects, with the objective of eliminating interest rate risk to the extent practical. Sale commitments with the investors have an expiration date that is longer than our related commitments to the borrower to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan into the sale commitment.

Both the rate lock commitments to borrowers and the forward sale contracts to buyers are undesignated derivatives and, accordingly, are marked to fair value through Loan origination and debt brokerage fees, net in the Condensed Consolidated Statements of Income. The fair value of the Company's rate lock commitments to borrowers and loans held for sale and the related input levels includes, as applicable:

●

the estimated gain of the expected loan sale to the investor (Level 2);

●

the expected net cash flows associated with servicing the loan, net of any guaranty obligations retained (Level 2);

●

the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

●

the nonperformance risk of both the counterparty and the Company (Level 3; derivative instruments only).

The estimated gain considers the origination fees the Company expects to collect upon loan closing (derivative instruments only) and premiums the Company expects to receive upon sale of the loan (Level 2). The fair value of the expected net cash flows associated with servicing the loan is calculated pursuant to the valuation techniques applicable to the fair value of future servicing, net at loan sale (Level 2).

To calculate the effects of interest rate movements, the Company uses applicable published U.S. Treasury prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount (Level 2).

The fair value of the Company's forward sales contracts to investors considers effects of interest rate movements between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

The fair value of the Company’s interest rate lock commitments and forward sales contracts is adjusted to reflect the risk that the agreement will not be fulfilled. The Company’s exposure to nonperformance in interest rate lock commitments and forward sale contracts is represented by the contractual amount of those instruments. Given the credit quality of our counterparties and the short duration of interest rate lock commitments and forward sale contracts, the risk of nonperformance by the Company’s counterparties has historically been minimal (Level 3). The following table presents the components of fair value and other relevant information associated with the Company’s derivative instruments and loans held for sale as of September 30, 2021 and December 31, 2020:

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			Fair Value Adjustment Components						Balance Sheet Location
													Fair Value
	Notional or		Estimated				Total						Adjustment
	Principal		Gain		Interest Rate		Fair Value		Derivative		Derivative		to Loans
(in thousands)	Amount		on Sale		Movement		Adjustment		Assets		Liabilities		Held for Sale
September 30, 2021
Rate lock commitments	$	1,979,035	$	52,838	$	(31,638)	$	21,200	$	32,111	$	(10,911)	$	—
Forward sale contracts		4,667,125		—		51,023		51,023		53,375		(2,352)		—
Loans held for sale		2,688,090		43,195		(19,385)		23,810		—		—		23,810
Total			$	96,033	$	—	$	96,033	$	85,486	$	(13,263)	$	23,810

December 31, 2020
Rate lock commitments	$	1,374,784	$	45,581	$	(1,697)	$	43,884	$	43,895	$	(11)	$	—
Forward sale contracts		3,760,953		—		836		836		5,891		(5,055)		—
Loans held for sale		2,386,169		62,167		861		63,028		—		—		63,028
Total			$	107,748	$	—	$	107,748	$	49,786	$	(5,066)	$	63,028

NOTE 9—FANNIE MAE COMMITMENTS AND PLEDGED SECURITIES

Fannie Mae DUS Related Commitments—Commitments for the origination and subsequent sale and delivery of loans to Fannie Mae represent those mortgage loan transactions where the borrower has locked an interest rate and scheduled closing, and the Company has entered into a mandatory delivery commitment to sell the loan to Fannie Mae. As discussed in NOTE 8, the Company accounts for these commitments as derivatives recorded at fair value.

The Company is generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program. The Company is required to secure these obligations by assigning restricted cash balances and securities to Fannie Mae, which are classified as Pledged securities, at fair value on the Condensed Consolidated Balance Sheets. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires restricted liquidity for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Pledged securities held in the form of money market funds holding U.S. Treasuries are discounted 5%, and Agency mortgage-backed securities (“Agency MBS”) are discounted 4% for purposes of calculating compliance with the restricted liquidity requirements. As seen below, the Company held the majority of its pledged securities in Agency MBS as of September 30, 2021. The majority of the loans for which the Company has risk sharing are Tier 2 loans.

The Company is in compliance with the September 30, 2021 collateral requirements as outlined above. As of September 30, 2021, reserve requirements for the DUS loan portfolio will require the Company to fund $64.2 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within the at-risk portfolio. Fannie Mae has in the past reassessed the DUS Capital Standards and may make changes to these standards in the future. The Company generates sufficient cash flow from its operations to meet these capital standards and does not expect any future changes to have a material impact on its future operations; however, any future increases to collateral requirements may adversely impact the Company’s available cash.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate the Company's servicing authority for all or some of the portfolio if, at any time, it determines that the Company's financial condition is not adequate to support its obligations under the DUS agreement. The Company is required to maintain acceptable net worth as defined in the agreement, and the Company satisfied the requirements as of September 30, 2021. The net worth requirement is derived primarily from unpaid principal balances on Fannie Mae loans and the level of risk sharing. At September 30, 2021, the net worth requirement was $250.2 million, and the Company's net worth, as defined in the requirements, was $1.1 billion, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of September 30, 2021, the Company was required to maintain at least $49.5 million of liquid assets to meet operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, and Ginnie Mae, and the Company had operational liquidity, as defined in the requirements, of $254.7 million as of September 30, 2021, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.

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Pledged Securities, at Fair Value—Pledged securities, at fair value consisted of the following balances as of September 30, 2021 and 2020 and December 31, 2020 and 2019:


	September 30,				December 31,
Pledged Securities (in thousands)	2021		2020		2020		2019
Restricted cash	$	10,596	$	13,370	$	4,954	$	2,150
Money market funds		40,954		7,954		12,519		5,054
Total pledged cash and cash equivalents	$	51,550	$	21,324	$	17,473	$	7,204
Agency MBS		97,224		112,971		119,763		114,563
Total pledged securities, at fair value	$	148,774	$	134,295	$	137,236	$	121,767

The information in the preceding table is presented to reconcile beginning and ending cash, cash equivalents, restricted cash, and restricted cash equivalents in the Condensed Consolidated Statements of Cash Flows as more fully discussed in NOTE 2.

The Company’s investments included within Pledged securities, at fair value consist primarily of money market funds and Agency debt securities. The investments in Agency debt securities consist of multifamily Agency MBS and are all accounted for as AFS securities. When the fair value of Agency MBS is lower than the carrying value, the Company assesses whether an allowance for credit losses is necessary. The Company does not record an allowance for credit losses for its AFS securities, including those whose fair value is less than amortized cost, when the AFS securities are issued by the GSEs. The contractual cash flows of these AFS securities are guaranteed by the GSEs, which are government-sponsored enterprises under the conservatorship of the Federal Housing Finance Agency. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of these securities. The Company does not intend to sell any of the Agency MBS whose fair value is less than the carrying value, nor does the Company believe that it is more likely than not that it would be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The following table provides additional information related to the Agency MBS as of September 30, 2021 and December 31, 2020:


Fair Value and Amortized Cost of Agency MBS (in thousands)	September 30, 2021		December 31, 2020
Fair value	$	97,224	$	119,763
Amortized cost		93,570		117,136
Total gains for securities with net gains in AOCI		3,796		2,669
Total losses for securities with net losses in AOCI		(142)		(42)
Fair value of securities with unrealized losses		2,139		12,267

None of the pledged securities has been in a continuous unrealized loss position for more than 12 months.

The following table provides contractual maturity information related to Agency MBS. The money market funds invest in short-term Federal Government and Agency debt securities and have no stated maturity date.


	September 30, 2021
Detail of Agency MBS Maturities (in thousands)	Fair Value		Amortized Cost
Within one year	$	—	$	—
After one year through five years		5,720		5,697
After five years through ten years		61,939		61,056
After ten years		29,565		26,817
Total	$	97,224	$	93,570

NOTE 10—EARNINGS PER SHARE AND STOCKHOLDERS’ EQUITY

Earnings per share (“EPS”) is calculated under the two-class method. The two-class method allocates all earnings (distributed and undistributed) to each class of common stock and participating securities based on their respective rights to receive dividends. The Company grants share-based awards to various employees and nonemployee directors under the 2020 Equity Incentive Plan that entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities.

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The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2021 and 2020 under the two-class method. Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the treasury-stock method.


	For the three months ended September 30,				For the nine months ended September 30,
EPS Calculations (in thousands, except per share amounts)	2021		2020		2021		2020
Calculation of basic EPS
Walker & Dunlop net income	$	71,721	$	53,190	$	185,831	$	163,078
Less: dividends and undistributed earnings allocated to participating securities		2,364		1,528		6,163		4,923
Net income applicable to common stockholders	$	69,357	$	51,662	$	179,668	$	158,155
Weighted-average basic shares outstanding		31,064		30,560		30,969		30,379
Basic EPS	$	2.23	$	1.69	$	5.80	$	5.21

Calculation of diluted EPS
Net income applicable to common stockholders	$	69,357	$	51,662	$	179,668	$	158,155
Add: reallocation of dividends and undistributed earnings based on assumed conversion		23		19		57		75
Net income allocated to common stockholders	$	69,380	$	51,681	$	179,725	$	158,230
Weighted-average basic shares outstanding		31,064		30,560		30,969		30,379
Add: weighted-average diluted non-participating securities		395		514		398		616
Weighted-average diluted shares outstanding		31,459		31,074		31,367		30,995
Diluted EPS	$	2.21	$	1.66	$	5.73	$	5.11

The assumed proceeds used for calculating the dilutive impact of restricted stock awards under the treasury-stock method includes the unrecognized compensation costs associated with the awards. For the three and nine months ended September 30, 2021, an immaterial number of average restricted shares were excluded from the computation of diluted earnings per share under the treasury method. For the three and nine months ended September 30, 2020, 175 thousand and 142 thousand average restricted shares, respectively, were excluded. These average restricted shares were excluded from the computation of diluted earnings per share under the treasury method because the effect would have been anti-dilutive, as the grant date market price of the restricted shares was greater than the average market price of the Company’s shares of common stock during the periods presented. For the nine months ended September 30, 2021, the Company issued shares of common stock totaling $9.6 million to settle compensation liabilities; these are non-cash transactions that do not impact the amount of cash paid on the Condensed Consolidated Statements of Cash Flows.

The Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 12, 2021. During the first three quarters of 2021, the Company did not repurchase any shares of its common stock under the share repurchase program. As of September 30, 2021, the Company had $75.0 million of authorized share repurchase capacity remaining under the 2021 share repurchase program.

During each of the first three quarters of 2021, the Company paid a dividend of $0.50 per share. On November 3, 2021, the Company’s Board of Directors declared a dividend of $0.50 per share for the fourth quarter of 2021. The dividend will be paid on November 29, 2021 to all holders of record of the Company’s restricted and unrestricted common stock as of November 19, 2021.

The Company’s Term Loan contains direct restrictions on the amount of dividends the Company may pay, and the warehouse debt facilities and agreements with the Agencies contain minimum equity, liquidity, and other capital requirements that indirectly restrict the amount of dividends the Company may pay. The Company does not believe that these restrictions currently limit the amount of dividends the Company can pay for the foreseeable future.

NOTE 11—PENDING ACQUISITION ACTIVITIES

During the third quarter of 2021, the Company entered into a purchase agreement to acquire Alliant Capital, Ltd. and certain of its affiliates (“Alliant”). Alliant provides alternative investment management services focused on the affordable housing sector through low-income housing tax credit syndication, joint venture development, and community preservation fund management.

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Under the terms of the purchase agreement, the Company will acquire Alliant at a total enterprise value of $696 million, comprised of:

●

$361 million of cash and the assumption of Alliant’s securitized debt facility, which had an outstanding balance of $145 million as of October 4, 2021, is rated A2 by Moody’s and carries a 4.75% interest rate (with the value of cash subject to adjustment based on the actual balance of the assumed securitized debt facility at closing and for customary net working capital);

●

$90 million of Walker & Dunlop common stock, with the number of shares to be determined at closing; and

●

$100 million of earn-out structured as participating interest in future cash flows over the next four years

The transaction is expected to close during the fourth quarter of 2021. Closing is subject to certain regulatory approvals and consents of Alliant’s investors and lender partners.

To allow it to fund the acquisition of Alliant, the Company is currently in the process of refinancing and upsizing its Note payable (“existing term loan”) to $600 million. The Company has received commitments well in excess of the $600 million targeted amount. The new term loan is expected to close during the fourth quarter of 2021 simultaneously with the close of the acquisition of Alliant. The proceeds from the new term loan will be used to repay the Company’s existing term loan and to fund a significant amount of the $361 million cash payment due at the closing of the acquisition of Alliant. The new term loan is expected to have a term of seven years.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the historical financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Form 10-Q”). The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those expressed or contemplated in those forward-looking statements as a result of certain factors, including those set forth under the headings “Forward-Looking Statements” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”).

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc. and subsidiaries (the “Company,” “Walker & Dunlop,” “we,” or “us”), may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking:

●

the future of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac,” and together with Fannie Mae, the “GSEs”), including their existence, relationship to the U.S. federal government, origination capacities, and their impact on our business;

●

changes to and trends in the interest rate environment and its impact on our business;

●

our growth strategy;

●

our projected financial condition, liquidity, and results of operations;

●

our ability to obtain and maintain warehouse and other loan funding arrangements;

●

our ability to make future dividend payments or repurchase shares of our common stock;

●

availability of and our ability to attract and retain qualified personnel and our ability to develop and retain relationships with borrowers, key principals, and lenders;

●

degree and nature of our competition;

●

changes in governmental regulations and policies, tax laws and rates, and similar matters and the impact of such regulations, policies, and actions;

●

our ability to comply with the laws, rules, and regulations applicable to us, including additional regulatory requirements for broker-dealer and other financial services firms that became applicable to us upon our acquisition of Zelman (as defined below);

●

our ability to complete the acquisition of Alliant (as defined below) and successfully integrate Alliant’s employees and businesses;

●

trends in the commercial real estate finance market, commercial real estate values, the credit and capital markets, or the general economy, including demand for multifamily housing and rent growth;

●

general volatility of the capital markets and the market price of our common stock;

●

our ability to prevent, detect, and mitigate cybersecurity risks; and

●

other risks and uncertainties associated with our business described in our 2020 Form 10-K and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission.

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While forward-looking statements reflect our good-faith projections, assumptions, and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. For a further discussion of these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements, see “Risk Factors.”

Business

We are one of the leading commercial real estate services and finance companies in the United States, with a primary focus on multifamily lending, debt brokerage, and property sales. We were the largest lender to multifamily properties and the fourth largest overall commercial real estate lender in the country in 2020. We leverage our technological resources and investments to (i) provide an enhanced experience for our customers, (ii) identify refinancing and other financial opportunities for our existing customers, and (iii) identify potential new customers. We believe our people, brand, and technology provide us with a competitive advantage, as evidenced by the fact that 76% of refinancing volumes in the quarter were new loans to us and 27% of total transaction volumes were from new customers.

We have been in business for more than 80 years; a Fannie Mae Delegated Underwriting and Servicing™ ("DUS") lender since 1988, when the DUS program began; a lender with the Government National Mortgage Association (“Ginnie Mae”) and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”) since acquiring a HUD license in 2009; and a Freddie Mac Multifamily approved seller/servicer for Conventional Loans. We originate, sell, and service a range of multifamily and other commercial real estate financing products, provide multifamily property sales brokerage and appraisal services, and engage in commercial real estate investment management activities. We provide housing market research and real estate-related investment banking and advisory services, which provides our clients and us with market insight into many areas of the housing market. Our clients are owners and developers of multifamily properties and other commercial real estate assets across the country, some of whom are the largest owners and developers in the industry. We originate and sell multifamily loans through the programs of Fannie Mae, Freddie Mac, and HUD (collectively, the “Agencies”). We retain servicing rights and asset management responsibilities on substantially all loans that we originate for the Agencies’ programs. We are approved as a Fannie Mae DUS lender nationally, an approved Freddie Mac Multifamily Optigo® Seller/Servicer (“Freddie Mac lender”) nationally for Conventional, Seniors Housing, Targeted Affordable Housing, and small balance loans, a HUD Multifamily Accelerated Processing (“MAP”) lender nationally, a HUD Section 232 LEAN (“LEAN”) lender nationally, and a Ginnie Mae issuer. We broker, and occasionally service, loans for many life insurance companies, commercial banks, and other institutional investors, in which cases we do not fund the loan but rather act as a loan broker. We also underwrite, service, and asset-manage interim loans. Most of these interim loans are closed through a joint venture or through separate accounts managed by our investment management subsidiary, Walker & Dunlop Investment Partners, Inc. (“WDIP”). Those interim loans not closed by the joint venture or WDIP are originated by us and presented on our balance sheet as loans held for investment.

Walker & Dunlop, Inc. is a holding company. We conduct the majority of our operations through Walker & Dunlop, LLC, our operating company.

Agency Lending and Loan Servicing

We recognize loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net from our lending with the Agencies when we commit to both originate a loan with a borrower and sell that loan to an investor. The loan origination and debt brokerage fees, net and the fair value of expected net cash flows from servicing, net for these transactions reflect the fair value attributable to loan origination fees, premiums on the sale of loans, net of any co-broker fees, and the fair value of the expected net cash flows associated with servicing the loans, net of any guaranty obligations retained.

We generally fund our Agency loan products through warehouse facility financing and sell them to investors in accordance with the related loan sale commitment, which we obtain concurrent with rate lock. Proceeds from the sale of the loan are used to pay off the warehouse borrowing. The sale of the loan is typically completed within 60 days after the loan is closed. We earn net warehouse interest income from loans held for sale while they are outstanding equal to the difference between the note rate on the loan and the cost of borrowing of the warehouse facility.

We retain servicing rights and asset management responsibilities on substantially all of our Agency loan products that we originate and sell and generate cash revenues from the fees we receive for servicing the loans, from the interest income on escrow deposits held on behalf of

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borrowers, and from other ancillary fees relating to servicing the loans. Servicing fees, which are based on servicing fee rates set at the time an investor agrees to purchase the loan and on the unpaid principal balance of the loan, are generally paid monthly for the duration of the loan. Our Fannie Mae and Freddie Mac servicing arrangements generally provide for prepayment protection to us in the event of a voluntary prepayment. For loans serviced outside of Fannie Mae and Freddie Mac, we typically do not have similar prepayment protections. For most loans we service under the Fannie Mae DUS program, we are required to advance the principal and interest payments and guarantee fees for four months should a borrower cease making payments under the terms of their loan, including while that loan is in forbearance. After advancing for four months, we may request reimbursement by Fannie Mae for the principal and interest advances, and Fannie Mae will reimburse us for these advances within 60 days of the request. Under the Ginnie Mae program, we are obligated to advance the principal and interest payments and guarantee fees until the HUD loan is brought current, fully paid or assigned to HUD. We are eligible to assign a loan to HUD once it is in default for 30 days. If the loan is not brought current, or the loan otherwise defaults, we are not reimbursed for our advances until such time as we assign the loan to HUD or work out a payment modification for the borrower. For loans in default, we may repurchase those loans out of the Ginnie Mae security, at which time our advance requirements cease and we may then modify and resell the loan or assign the loan back to HUD and be reimbursed for our advances. We are not obligated to make advances on the loans we service under the Freddie Mac Optigo® program, and our bank and life insurance company servicing agreements.

Our loan commitments and loans held for sale are currently not exposed to unhedged interest rate risk during the loan commitment, closing, and delivery process. The sale or placement of each loan to an investor is negotiated at the same time we establish the coupon rate for the loan. We also seek to mitigate the risk of a loan not closing by collecting good faith deposits from the borrower. The deposit is returned to the borrower only once the loan is closed. Any potential loss from a catastrophic change in the property condition while the loan is held for sale using warehouse facility financing is mitigated through property insurance equal to replacement cost. We are also protected contractually from an investor’s failure to purchase the loan. We have experienced an immaterial number of failed deliveries in our history and have incurred immaterial losses on such failed deliveries.

We have risk-sharing obligations on substantially all loans we originate under the Fannie Mae DUS program. When a Fannie Mae DUS loan is subject to full risk-sharing, we absorb losses on the first 5% of the unpaid principal balance of a loan at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss capped at 20% of the original unpaid principal balance of the loan (subject to doubling or tripling if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae). Our full risk-sharing is currently limited to loans up to $300 million, which equates to a maximum loss per loan of $60 million (such exposure would occur in the event that the underlying collateral is determined to be completely without value at the time of loss). For loans in excess of $300 million, we receive modified risk-sharing. We also may request modified risk-sharing at the time of origination on loans below $300 million, which reduces our potential risk-sharing losses from the levels described above if we do not believe that we are being fully compensated for the risks of the transaction. The full risk-sharing limit prior to June 30, 2021 was less than $300 million. Accordingly, loans originated prior to then may be subject to modified risk-sharing at much lower levels.

Our servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are larger than the servicing fees we would receive from Fannie Mae for loans with no risk-sharing obligations. We receive a lower servicing fee for modified risk-sharing than for full risk-sharing.

As part of our overall growth strategy, we are focused on significantly growing and investing in our small-balance lending platform, which involves a high volume of transactions with smaller loan balances. In support of this product, we acquired a company with a technology platform that streamlines and accelerates the quoting, processing, and underwriting of small-balance, multifamily loans. Additionally, the technology platform provides the borrower with a web-based, user-friendly interface, enhancing the borrower’s experience during the origination process.

Debt Brokerage

Our mortgage bankers who focus on debt brokerage are engaged by borrowers to work with a variety of institutional lenders to find the most appropriate loan instrument for the borrowers' needs. These loans are then funded directly by the institutional lender, and we receive an origination fee for placing the loan. For those brokered loans we also service, we collect ongoing servicing fees while those loans remain in our servicing portfolio. The servicing fees we typically earn on brokered loan transactions are substantially lower than the servicing fees we earn for servicing loans with the Agencies.

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Principal Lending and Investing

Our Interim Program is composed of the loans held by the Interim Program JV and the Interim Loan Program as described below. Through a joint venture with an affiliate of Blackstone Mortgage Trust, Inc., we offer short-term senior secured debt financing products that provide floating-rate, interest-only loans for terms of generally up to three years to experienced borrowers seeking to acquire or reposition multifamily properties that do not currently qualify for permanent financing (the “Interim Program JV” or the “joint venture”). The joint venture funds its operations using a combination of equity contributions from its owners and third-party credit facilities. We hold a 15% ownership interest in the Interim Program JV and are responsible for sourcing, underwriting, servicing, and asset-managing the loans originated by the joint venture. The Interim Program JV assumes full risk of loss while the loans it originates are outstanding, while we assume risk commensurate with our 15% ownership interest.

Using a combination of our own capital and warehouse debt financing, we offer interim loans that do not meet the criteria of the Interim Program JV (the “Interim Loan Program”). We underwrite, service, and asset-manage all loans executed through the Interim Loan Program. We originate and hold these Interim Loan Program loans for investment, which are included on our balance sheet, and during the time that these loans are outstanding, we assume the full risk of loss. The ultimate goal of the Interim Loan Program is to provide permanent Agency financing on these transitional properties.

WDIP and its subsidiaries function as the operator of a private commercial real estate investment adviser focused on the management of debt, preferred equity, and mezzanine equity investments in middle-market commercial real estate funds. The activities of WDIP, a wholly owned subsidiary of the Company, are part of our strategy to grow and diversify our operations by growing our investment management platform. WDIP’s current assets under management (“AUM”) of $1.4 billion primarily consist of five sources: Fund III, Fund IV, Fund V, Fund VI (collectively, the “Funds”), and separate accounts managed for life insurance companies. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments. Unfunded commitments are highest during the fund raising and investment phases. WDIP receives management fees based on both unfunded commitments and funded investments. Additionally, with respect to the Funds, WDIP receives a percentage of the return above the fund return hurdle rate specified in the fund agreements.

Property Sales

We offer property sales brokerage services to owners and developers of multifamily properties that are seeking to sell these properties through our subsidiary Walker & Dunlop Investment Sales, LLC (“WDIS”). Through these property sales brokerage services, we seek to maximize proceeds and certainty of closure for our clients using our knowledge of the commercial real estate and capital markets and relying on our experienced transaction professionals. We receive a sales commission for brokering the sale of these multifamily assets on behalf of our clients, and we often are able to provide financing to the purchaser of the properties through our Agency or debt brokerage teams. Our property sales services are offered in various regions throughout the United States. We have increased the number of property sales brokers and the geographical reach of our investment sales platform over the past several years through hiring and acquisitions and intend to continue this expansion in support of our growth strategy.

Appraisal Services

We have a joint venture branded Apprise by Walker & Dunlop with an international technology services company to offer automated multifamily appraisal services (“Appraisal JV”). The Appraisal JV leverages technology and data science to dramatically improve the consistency, transparency, and speed of multifamily property appraisals in the U.S. through the licensing of our partner’s technology and leveraging of our expertise in the commercial real estate industry. We own a 50% interest in the Appraisal JV and account for the interest as an equity-method investment. While the operations of the Appraisal JV for the quarter ended September 30, 2021 were immaterial, the Appraisal JV’s operations continue to rapidly grow with significant increases in the volume of appraisal reports generated and a client list that includes several national commercial real estate lenders.

Housing Market Research and Real Estate Investment Banking Services

During the third quarter of 2021, we closed on the acquisition of certain assets and the assumption of certain liabilities of Zelman Holdings, LLC (“Zelman”) through a 75% interest in a newly formed entity, which does business as Zelman & Associates. Zelman is a nationally recognized housing market research and investment banking firm that will enhance the information we provide to our clients and increase our access to high-quality market insight in many areas of the housing market, including construction trends, demographics, mortgage

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finance, and real estate technology and services. Zelman generates revenues through the sale of its housing market research data and related publications to banks, investment banks and other financial institutions, and through its offering of real estate-related investment banking and advisory services.

Basis of Presentation

The accompanying condensed consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, and all intercompany transactions have been eliminated.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates based on certain judgments and assumptions that are inherently uncertain and affect reported amounts. The estimates and assumptions are based on historical experience and other factors management believes to be reasonable. Actual results may differ from those estimates and assumptions and the use of different judgments and assumptions may have a material impact on our results. We believe the following critical accounting estimates represent the areas where more significant judgments and estimates are used in the preparation of our condensed consolidated financial statements. Additional information about our critical accounting estimates and other significant accounting policies are discussed in NOTE 2 of the consolidated financial statements in our 2020 Form 10-K.

Mortgage Servicing Rights (“MSRs”). MSRs are recorded at fair value at loan sale or upon purchase. The fair value at loan sale (“OMSR”) is based on estimates of expected net cash flows associated with the servicing rights and takes into consideration an estimate of loan prepayment. Initially, the fair value amount is included as a component of the derivative asset fair value at the loan commitment date. The estimated net cash flows from servicing, which includes assumptions for discount rate, escrow earnings, prepayment speed, and servicing costs, are discounted at a rate that reflects the credit and liquidity risk of the OMSR over the estimated life of the underlying loan. The discount rates used for all OMSRs were between 8-14% during 2021 and between 10-15% during 2020 and varied based on the loan type. The life of the underlying loan is estimated giving consideration to the prepayment provisions in the loan and assumptions about loan behaviors around those provisions. Our model for OMSRs assumes no prepayment prior to the expiration of the prepayment provisions and full prepayment of the loan at or near the point when the prepayment provisions have expired. We record an individual OMSR asset (or liability) for each loan at loan sale. The fair value of MSRs acquired through a stand-alone servicing portfolio purchase (“PMSR”) is equal to the purchase price paid. For PMSRs, we record and amortize a portfolio-level MSR asset based on the estimated remaining life of the portfolio using the prepayment characteristics of the portfolio.

The assumptions used to estimate the fair value of capitalized OMSRs are developed internally and are periodically compared to assumptions used by other market participants. Due to the relatively few transactions in the multifamily MSR market and the lack of significant changes in assumptions by market participants, we have experienced limited volatility in the assumptions historically, including the most significant assumption – the discount rate. We do not expect to see significant volatility in the assumptions for the foreseeable future. We actively monitor the assumptions used and make adjustments to those assumptions when market conditions change, or other factors indicate such adjustments are warranted. During the first quarter of 2021, we reduced the discount rate and escrow earnings rate assumptions for our OMSRs. We engage a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis. Changes in our discount rate assumptions may materially impact the fair value of the MSRs (NOTE 3 of the condensed consolidated financial statements details the portfolio-level impact of a change in the discount rate).

For PMSRs, a constant rate of prepayments and defaults is included in the determination of the portfolio’s estimated life at purchase (and thus included as a component of the portfolio’s amortization). Accordingly, prepayments and defaults of individual loans do not change the level of amortization expense recorded for the portfolio unless the pattern of actual prepayments and defaults varies significantly from the estimated pattern. When such a significant difference in the pattern of estimated and actual prepayments and defaults occurs, we prospectively adjust the estimated life of the portfolio (and thus future amortization) to approximate the actual pattern observed. We have made adjustments to the estimated life of our PMSRs in the past when the actual experience of prepayments differed materially from the estimated prepayments.

Allowance for Risk-Sharing Obligations. This reserve liability (referred to as “allowance”) for risk-sharing obligations relates to our Fannie Mae at-risk servicing portfolio and is presented as a separate liability on our balance sheets. We record an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in our Fannie Mae at-risk servicing portfolio using the weighted-average remaining maturity method (“WARM”). WARM uses an average annual loss rate that contains loss content over multiple vintages and loan terms and is

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used as a foundation for estimating the CECL reserve. The average annual loss rate is applied to the estimated unpaid principal balance over the contractual term, adjusted for estimated prepayments and amortization to arrive at the CECL reserve for the entire current portfolio as described further below. We currently use one year for our reasonable and supportable forecast period (“forecast period”) as we believe forecasts beyond one year are inherently less reliable. During the forecast period, we apply an adjusted loss factor associated with a similar historical period. We revert to the historical loss rate over a one-year period on a straight-line basis.

One of the key components of a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will amortize and prepay in the future. We group loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. We originate loans under the DUS program with various terms generally ranging from several years to 15 years; each of these various loan terms has a different runoff rate. The runoff rates applied to each vintage and contractual maturity term is determined using historical data; however, changes in prepayment and amortization behavior may significantly impact the estimate.

The weighted-average annual loss rate is calculated using a 10-year look-back period, utilizing the average portfolio balance and settled losses for each year. A 10-year period is used as we believe that this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. Changes in our expectations and forecasts may materially impact the estimate.

We evaluate our risk-sharing loans on a quarterly basis to determine whether there are loans that are probable of default. Specifically, we assess a loan’s qualitative and quantitative risk factors, such as payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio, and property condition. When a loan is determined to be probable of default based on these factors, we remove the loan from the WARM calculation and individually assess the loan for potential credit loss. This assessment requires certain judgments and assumptions to be made regarding the property values and other factors that may differ significantly from actual results. Loss settlement with Fannie Mae has historically concluded within 18 to 36 months after foreclosure. Historically, the initial collateral-based reserves have not varied significantly from the final settlement.

We actively monitor the judgments and assumptions used in our Allowance for Risk-Sharing Obligation estimate and make adjustments to those assumptions when market conditions change, or when other factors indicate such adjustments are warranted. We believe the level of Allowance for Risk-Sharing Obligation is appropriate based on our expectations of future market conditions; however, changes in one or more of the judgments or assumptions used above could have a significant impact on the estimate.

Overview of Current Business Environment

Entering 2021, the pandemic continued to impact macroeconomic conditions with U.S. unemployment rates at elevated levels but significantly improved compared to the middle of 2020. Congress passed three pandemic stimulus packages to provide funding for government programs directly supporting households and businesses, which included a total of $47 billion in renter assistance. In the second and third quarters of 2021, vaccination programs across the U.S. accelerated and became widely available to the public, resulting in most jurisdictions eliminating or significantly curtailing economic restrictions. With the lifting of economic restrictions, macroeconomic conditions continue to recover with the reported unemployment rate falling to 4.8% as of September 2021 from 6.7% as of December 2020.

To support the economic recovery, the Federal Reserve set the Federal Funds Rate at a target of 0% to 0.25% at the beginning of the pandemic and has maintained that rate through the first nine months of 2021. The Federal Reserve also indicated in its September 2021 meeting that it intends to keep rates at these low levels as the economy continues to recover and until the economy reaches what it believes is full employment. The Federal Reserve also has noted that although the reported unemployment rates have improved significantly, it will monitor and determine whether full employment has been achieved based on a number of factors, including participation rate and wage growth. Although the Federal Reserve has indicated it will begin reducing its purchase of Treasury securities and Agency mortgage-backed securities (“Agency MBS”), the overall improvements in the economy coupled with the low Federal Fund Rate target have kept long-term mortgage interest rates very low, which form the basis for most of our lending.

Multifamily property fundamentals continue to show strength during the ongoing recovery, with multifamily occupancy rates, demand for new multifamily residential leases, and residential retention rates at record highs. According to RealPage, a provider of commercial real estate data and analytics, occupancy rates have increased to 97.3% as of September 2021, compared to 95.8% as of December 2019, prior to the start of the pandemic. Additionally, residential retention rates reached all-time highs at 58.0% during the third quarter of 2021. Low vacancy rates coupled with high retention rates and demand for new leases indicate a robust and healthy multifamily market.

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Our multifamily property sales volumes continued their strong growth into the third quarter of 2021, as (i) the multifamily acquisitions market was very active the past few quarters, including the third quarter of 2021, (ii) we have expanded the number of property sales brokers and the geographical reach of our property sales platform, and (iii) our volume in the third quarter of 2020 was lower due to the pandemic. Long term, we believe the market fundamentals will continue to be positive for multifamily property sales. Over the last several years, and in the months leading up to the pandemic, household formation and a dearth of supply of entry-level single-family homes led to strong demand for rental housing in most geographic areas. Consequently, the fundamentals of the multifamily property sales market were strong prior to the pandemic, and, when combined with high occupancy and retention rates and rising real-estate prices, it is our expectation that market demand for multifamily property sales will continue to grow as this asset class remains an attractive investment option.

Our debt brokerage platform continued its strong growth into the third quarter of 2021, with brokered volume increasing significantly during the year. The increases in volume for the three and nine months ended September 30, 2021 reflect the continued demand from private capital providers, with activity focused not only on multifamily but other commercial real estate assets such as office and retail. Additionally, our debt brokerage volumes in the third quarter of 2020 were unusually low due to the pandemic. We expect the non-multifamily debt financing volumes to continue to recover over time as other commercial real estate asset classes stabilize post-pandemic.

Our Agency multifamily debt financing operations have remained very active over the past year. We are a market-leading originator with the Agencies, and we believe our market leadership positions us well to continue gaining market share and remain a significant lender with the Agencies for the foreseeable future.

The Federal Housing Finance Agency (“FHFA”) establishes loan origination caps for both Fannie Mae and Freddie Mac each year. In November 2020, FHFA established Fannie Mae’s and Freddie Mac’s 2021 loan origination caps at $70 billion each for all multifamily business. During the three months ended September 30, 2021, Fannie Mae and Freddie Mac had multifamily origination volumes of $16.3 billion and $17.7 billion, respectively, up 6.5% and down 2.2%, respectively, from the same period in 2020. During the nine months ended September 30, 2021, Fannie Mae and Freddie Mac had multifamily origination volumes of $48.7 billion and $44.8 billion, respectively, down 0.6% and 7.4%, respectively, from the first nine months of 2020, leaving a combined $46.5 billion of available lending capacity for the remainder of the year. GSE lending volume slowed in the first half of 2021, as the GSEs’ pricing on multifamily debt was less competitive as other capital sources reentered the market, and as the GSEs managed their originations under their lending caps. In the third quarter of 2021, GSE lending accelerated with combined lending up 10.1% in September 2021 compared to the same period in 2020. With a combined $46.5 billion or 33% of available lending capacity remaining, we expect the GSEs’ lending to continue to accelerate in the fourth quarter of 2021. In October 2021, FHFA established Fannie Mae’s and Freddie Mac’s 2022 loan origination caps at $78 billion each for all multifamily business, an 11% increase from the 2021 caps.

Our debt financing operations with HUD remained strong during the first nine months of 2021, with HUD loan volumes increasing 40% and 33% for the three and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020. The increase in HUD debt financing volumes were driven by continued strong demand for HUD’s multifamily lending product, which provides borrowers with favorable economics on long-term, fully amortizing debt.

We expect strength in our Agency operations to continue despite the return of other capital sources. An additional positive factor influencing multifamily financing volumes is the historically low interest rate environment, which is incentivizing some borrowers to refinance their properties in spite of the prepayment penalty fees they may incur. We continue to seek additional resources and to scale our Agency lending platform.

Our originations with the Agencies are our most profitable executions as they provide significant non-cash gains from MSRs that turn into significant cash revenue streams from future servicing fees. During the three and nine months ended September 30, 2021, servicing fees are up 17% and 19%, respectively, over the same periods last year due to the record amount of MSRs we generated in 2020. A decline in our Agency originations would negatively impact our financial results as our non-cash revenues would decrease disproportionately with debt financing volume and future servicing fee revenue would be constrained or decline.

We entered into the Interim Program JV to both increase the overall capital available to transitional multifamily properties and to dramatically expand our capacity to originate Interim Program loans. The demand for transitional lending has brought increased competition from lenders, specifically banks, mortgage real estate investment trusts, and life insurance companies. For the third quarter of 2021, we originated $314.9 million of Interim Program JV loans, compared to no originations in the third quarter of 2020. In the third quarter of 2020, we did not originate any new Interim Program loans as a result of the pandemic. Except for one loan that defaulted in early 2019, the loans in our portfolio and in the Interim Program JV continue to perform as agreed. Our Interim Loan Program has similarly rebounded in the third quarter of 2021, with originations of $157.2 million compared to $37.0 million in the third quarter of 2020.

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In the third quarter of 2021, we entered into a purchase agreement to acquire Alliant Capital, Ltd. and certain of its affiliates (“Alliant”), a privately held alternative investment manager focused on the affordable housing sector through low-income housing tax credit (“LIHTC”) syndication, joint venture development, and community preservation fund management. The transaction is expected to close in the fourth quarter of 2021, and we expect the combination of Alliant and our existing strong position in the affordable housing space to generate significant financing and property sales opportunities.

In September 2021, the White House announced plans to increase the affordable housing supply across the country. These plans include the relaunching and expansion of programs designed to increase the available capital for the development of affordable housing projects. In conjunction with the announcement, the FHFA raised the GSEs’ combined LIHTC investment cap to $1.7 billion, up 70% from the previous cap of $1.0 billion. Additionally, as part of FHFA’s 2022 loan origination caps of $156 billion announced in October 2021, at least 50% of the GSEs’ multifamily business is required to be targeted towards affordable housing. We expect these initiatives will create additional growth opportunities for both Alliant and our debt financing and property sales teams focused on affordable housing.

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Results of Operations

The following is a discussion of our results of operations for the three and nine months ended September 30, 2021 and 2020. The financial results are not necessarily indicative of future results. Our quarterly results have fluctuated in the past and are expected to fluctuate in the future, reflecting the interest-rate environment, the volume of transactions, business acquisitions, regulatory actions, industry trends, and general economic conditions. The table below provides supplemental data regarding our financial performance.

SUPPLEMENTAL OPERATING DATA


	For the three months ended						For the nine months ended
	September 30,						September 30,
(in thousands; except per share data)	2021			2020			2021			2020
Transaction Volume:
Components of Debt Financing Volume
Fannie Mae	$	3,271,765		$	1,977,607		$	6,716,765		$	8,911,397
Freddie Mac		2,591,906			3,136,313			4,607,945			5,903,389
Ginnie Mae ̶ HUD		522,093			373,480			1,816,800			1,368,317
Brokered⁽¹⁾		6,402,862			1,711,541			16,985,932			7,200,926
Principal Lending and Investing⁽²⁾		472,142			105,488			968,629			227,529
Total Debt Financing Volume	$	13,260,768		$	7,304,429		$	31,096,071		$	23,611,558
Property Sales Volume		5,230,093			1,106,162			9,967,385			3,283,463
Total Transaction Volume	$	18,490,861		$	8,410,591		$	41,063,456		$	26,895,021

Key Performance Metrics:
Operating margin		27	%		28	%		28	%		29	%
Return on equity		22			20			20			21
Walker & Dunlop net income	$	71,721		$	53,190		$	185,831		$	163,078
Adjusted EBITDA⁽³⁾		72,430			45,165			199,611			157,687
Diluted EPS		2.21			1.66			5.73			5.11

Key Expense Metrics (as a percentage of total revenues):
Personnel expenses		49	%		46	%		48	%		42	%
Other operating expenses		7			7			7			6

Key Revenue Metrics (as a percentage of debt financing volume):
Origination related fees⁽⁴⁾		0.95	%		1.15	%		1.00	%		1.01	%
MSR income⁽⁵⁾		0.70			1.08			0.69			1.01
MSR income, as a percentage of Agency debt financing volume⁽⁶⁾		1.40			1.42			1.59			1.46


(dollars in thousands)	As of September 30,
Managed Portfolio:	2021		2020
Components of Servicing Portfolio
Fannie Mae	$	52,317,953	$	46,224,549
Freddie Mac		38,039,014		35,726,109
Ginnie Mae - HUD		9,894,893		9,639,820
Brokered ⁽⁷⁾		13,429,801		11,513,521
Principal Lending and Investing ⁽⁸⁾		238,713		273,754
Total Servicing Portfolio	$	113,920,374	$	103,377,753
Assets under management ⁽⁹⁾		2,309,332		1,936,679
Total Managed Portfolio	$	116,229,706	$	105,314,432

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SUPPLEMENTAL OPERATING DATA (continued)


	As of September 30,
Key Servicing Portfolio Metrics (end of period):	2021		2020
Custodial escrow account balance (in billions)	$	3.0	$	2.8
Weighted-average servicing fee rate (basis points)		24.6		23.4
Weighted-average remaining servicing portfolio term (years)		9.2		9.4

The following tables present WDIP’s AUM as of September 30, 2021 and 2020:


	As of September 30, 2021
	Unfunded		Funded
Components of WDIP assets under management (in thousands)	Commitments		Investments		Total
Fund III	$	37,781	$	65,975	$	103,756
Fund IV		88,827		106,498		195,325
Fund V		273,853		45,064		318,917
Fund VI		30,498		2,478		32,976
Separate accounts		150,000		589,840		739,840
Total assets under management	$	580,959	$	809,855	$	1,390,814


	As of September 30, 2020
	Unfunded		Funded
Components of WDIP assets under management (in thousands)	Commitments		Investments		Total
Fund III	$	56,072	$	123,818	$	179,890
Fund IV		165,294		139,657		304,951
Fund V		192,113		10,036		202,149
Separate accounts		—		610,223		610,223
Total assets under management	$	413,479	$	883,734	$	1,297,213

(1)	Brokered transactions for life insurance companies, commercial banks, and other capital sources.

(2)

For the three months ended September 30, 2021, includes $314.9 million from the Interim Program JV and $157.2 million from the Interim Loan Program. For the nine months ended September 30, 2021, includes $665.9 million from the Interim Program JV, $286.7 million from the Interim Loan Program and $16.0 million from WDIP separate accounts. For the three months ended September 30, 2020, includes $37.0 million from the Interim Program and $68.5 million from WDIP separate accounts. For the nine months ended September 30, 2020, includes $37.0 million from the Interim Program, $86.2 million from the Interim Program JV and $104.4 million from WDIP separate accounts.

(3)	This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measures.”

(4)	Excludes the income and debt financing volume from Principal Lending and Investing.

(5)	The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty obligations retained. Excludes the income and debt financing volume from Principal Lending and Investing.

(6)	The fair value of the expected net cash flows associated with the servicing of the loan, net of any guaranty obligations retained, as a percentage of Agency volume.

(7)	Brokered loans serviced primarily for life insurance companies.

(8)	Consists of interim loans not managed for the Interim Program JV.

(9)

As of September 30, 2021, includes $918.5 million of Interim Program JV managed loans and WDIP assets under management of $1.4 billion. As of September 30, 2020, includes $566.1 million of Interim Program JV managed loans, $73.3 million of loans serviced directly for the Interim Program JV partner, and WDIP assets under management of $1.3 billion.

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The following tables present a period-to-period comparison of our financial results for the three and nine months ended September 30, 2021 and 2020.

FINANCIAL RESULTS – THREE MONTHS


	For the three months ended
	September 30,				Dollar		Percentage
(dollars in thousands)	2021		2020		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	123,242	$	83,825	$	39,417	47	%
Fair value of expected net cash flows from servicing, net		89,482		78,065		11,417	15
Servicing fees		70,628		60,265		10,363	17
Property sales broker fees		33,677		6,756		26,921	398
Net warehouse interest income		5,583		7,558		(1,975)	(26)
Escrow earnings and other interest income		2,032		2,275		(243)	(11)
Other revenues		21,646		8,272		13,374	162
Total revenues	$	346,290	$	247,016	$	99,274	40

Expenses
Personnel	$	170,181	$	114,548	$	55,633	49	%
Amortization and depreciation		53,498		41,919		11,579	28
Provision (benefit) for credit losses		1,266		3,483		(2,217)	(64)
Interest expense on corporate debt		1,766		1,786		(20)	(1)
Other operating expenses		24,836		16,165		8,671	54
Total expenses	$	251,547	$	177,901	$	73,646	41
Income from operations	$	94,743	$	69,115	$	25,628	37
Income tax expense		22,953		15,925		7,028	44
Net income before noncontrolling interests	$	71,790	$	53,190	$	18,600	35
Less: net income (loss) from noncontrolling interests		69		—		69	N/A
Walker & Dunlop net income	$	71,721	$	53,190	$	18,531	35

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FINANCIAL RESULTS – NINE MONTHS


	For the nine months ended
	September 30,				Dollar		Percentage
(dollars in thousands)	2021		2020		Change		Change
Revenues
Loan origination and debt brokerage fees, net	$	306,593	$	238,105	$	68,488	29	%
Fair value of expected net cash flows from servicing, net		209,266		236,434		(27,168)	(11)
Servicing fees		205,658		172,561		33,097	19
Property sales broker fees		65,173		19,928		45,245	227
Net warehouse interest income		14,768		22,454		(7,686)	(34)
Escrow earnings and other interest income		5,972		15,689		(9,717)	(62)
Other revenues		44,559		28,827		15,732	55
Total revenues	$	851,989	$	733,998	$	117,991	16

Expenses
Personnel	$	407,817	$	310,993	$	96,824	31	%
Amortization and depreciation		148,879		123,998		24,881	20
Provision (benefit) for credit losses		(14,380)		32,029		(46,409)	(145)
Interest expense on corporate debt		5,291		6,724		(1,433)	(21)
Other operating expenses		62,171		47,324		14,847	31
Total expenses	$	609,778	$	521,068	$	88,710	17
Income from operations	$	242,211	$	212,930	$	29,281	14
Income tax expense		56,311		50,076		6,235	12
Net income before noncontrolling interests	$	185,900	$	162,854	$	23,046	14
Less: net income (loss) from noncontrolling interests		69		(224)		293	(131)
Walker & Dunlop net income	$	185,831	$	163,078	$	22,753	14

Overview

Three months ended September 30, 2021 compared to three months ended September 30, 2020

The increase in revenues was primarily driven by increases in loan origination and debt brokerage fees, net (“origination fees”), fair value of expected net cash flows from servicing, net (“MSR Income”), servicing fees, property sales broker fees and other revenues. The increase in origination fees was primarily related to an overall increase in debt financing volume, particularly in our Fannie Mae and brokered debt financing volumes. MSR Income increased as a result of an overall increase in Agency debt financing volume. Servicing fees increased largely from an increase in the average servicing portfolio outstanding. The increase in property sales broker fees was a result of a substantial increase in property sales volume. Other revenues increased primarily as a result of increases in prepayment fees and research subscription fees.

The increase in expenses was largely attributable to increases in personnel expenses, amortization and depreciation, and other operating expenses. The increase in personnel expenses was primarily a result of increases in (i) commission costs due to the increases in origination fees and property sales brokers fees, (ii) salaries and benefits costs driven by an increase in the average headcount, and (iii) stock compensation expense due to increases in costs for our 2020 broad-based employee stock grant and costs associated with our performance plan for executives. Amortization and depreciation expense increased due to an increase in the average MSR balance. Other operating expenses increased largely as a result of the overall growth of the Company over the past year and acquisition activity.

Nine months ended September 30, 2021 compared to nine months ended September 30, 2020

The increase in revenues was driven by increases in origination fees, servicing fees, property sales broker fees and other revenues, partially offset by decreases in MSR Income, net warehouse interest income, and escrow earnings and other interest income. The increase in

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origination fees was primarily related to an overall increase in debt financing volume, particularly in our brokered and HUD loan origination volumes. Servicing fees increased largely from an increase in the average servicing portfolio outstanding. The increase in property sales broker fees was a result of the significant increase in property sales volume. Other revenues increased primarily due to increases in prepayment fees and research subscription fees. MSR Income decreased as a result of a decrease in Agency debt financing volume. Net warehouse interest income decreased due to decreases in the average balances and net spreads for both LHFS and LHFI. Escrow earnings and other interest income decreased largely due to a substantial decrease in the average earnings rate.

The increase in expenses was mainly driven by increases in personnel expenses, amortization and depreciation, and other operating expenses, partially offset by a change in provision (benefit) for credit losses. The increase in personnel expenses was primarily due to increases in (i) commission costs due to the increases in origination fees and property sales broker fees, (ii) salaries and benefits costs due primarily to an increase in the average headcount, and (iii) stock-based compensation expense due to increases in costs for our 2020 broad-based employee stock grant and costs associated with our performance plan for executives. Amortization and depreciation expense increased due to an increase in the average MSR balance. Other operating expenses increased as a result of the overall growth of the Company over the past year and acquisition activity. The change to a benefit for credit losses in 2021 from a provision for credit losses in 2020 was driven primarily by a decrease in our CECL reserve.

Revenues

Loan origination and debt brokerage fees, net and Fair value of expected net cash flows from servicing, net. The following tables provide additional information that helps explain changes in origination fees and MSR Income period over period:


	For the three months ended				For the nine months ended
	September 30,				September 30,
Debt Financing Volume by Product Type	2021		2020		2021		2020
Fannie Mae	25	%	27	%	22	%	38	%
Freddie Mac	20		43		15		25
Ginnie Mae ̶ HUD	4		5		6		6
Brokered	47		24		54		30
Principal Lending and Investing	4		1		3		1


	For the three months ended					For the nine months ended
	September 30,					September 30,
Mortgage Banking Details (basis points)	2021			2020		2021			2020
Origination Fee Rate ⁽¹⁾		95			115		100			101
Basis Point Change		(20)					(1)
Percentage Change		(17)	%				(1)	%
MSR Rate ⁽²⁾		70			108		69			101
Basis Point Change		(38)					(32)
Percentage Change		(35)	%				(32)	%
Agency MSR Rate ⁽³⁾		140			142		159			146
Basis Point Change		(2)					13
Percentage Change		(1)	%				9	%

(1)	Loan origination and debt brokerage fees, net as a percentage of total mortgage banking volume.

(2)	MSR Income as a percentage of total debt financing volume, excluding the income and debt financing volume from principal lending and investing.

(3)	MSR Income as a percentage of Agency debt financing volume.

For the three months ended September 30, 2021, the increase in origination fees was driven by the increase in overall debt financing volume, particularly the substantial growth in our Fannie Mae and brokered debt financing volume, which grew by 65% and 274%, respectively, from the three months ended September 30, 2020. The increase in origination fees due to the increase in volume was partially offset by a decrease in the origination fee rate resulting from the shift in transaction mix from 75% Agency loans in 2020 to 49% Agency loans in 2021. We typically earn higher origination fees on Agency loans than brokered loans.

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MSR Income increased for the three months ended September 30, 2021, primarily as a result of a 16% increase in Agency debt financing volume. The decrease in the MSR Rate was attributable to the same shift in transaction mix noted above.

For the nine months ended September 30, 2021, the increase in origination fees was driven by the increase in overall debt financing volume from the nine months ended September 30, 2020, partially offset by a small decline in the Origination Fee Rate.

MSR Income declined for the nine months ended September 30, 2021, as a result of a 19% decrease in Agency debt financing volumes, particularly our Fannie Mae debt financing volume, which decreased 25%. Partially offsetting the decline due to volume was an increase in the Agency MSR Rate. The decline in Fannie Mae debt financing volume was primarily the result of a portfolio of loans originated in 2020 with over $2 billion in volume, with no comparable large portfolio transaction in 2021. The Agency MSR Rate increased year over year due primarily to this large portfolio, which had a lower than average servicing fee.

See the “Overview of Current Business Environment” section above for a detailed discussion of the factors driving the changes in debt financing volumes.

Servicing Fees. For both the three and nine months ended September 30, 2021, the increases were primarily attributable to increases in the average servicing portfolio period over period as shown below, primarily due to higher loan originations and relatively few payoffs over the last 12 months, coupled with increases in the servicing portfolio’s average servicing fee rates as shown below. The increases in the average servicing fee are the result of the large volume of Fannie Mae debt financing volume with high servicing fees over the past year.


	For the three months ended					For the nine months ended
	September 30,					September 30,
Servicing Fees Details (dollars in thousands)	2021			2020		2021			2020
Average Servicing Portfolio	$	112,308,470		$	101,551,127	$	110,516,000		$	97,914,210
Dollar Change		10,757,343					12,601,790
Percentage Change		11	%				13	%
Average Servicing Fee (basis points)		24.6			23.4		24.4			23.3
Basis Point Change		1.2					1.1
Percentage Change		5.1	%				4.7	%

Property sales broker fees. For the three and nine months ended September 30, 2021, the increases in property sales broker fees were driven by significant increases in the property sales volumes year over year. See the “Overview of Current Business Environment” section above for a detailed discussion of the factors driving the changes in property sales volumes.

Net Warehouse Interest Income. For the three and nine months ended September 30, 2021, the decreases in net warehouse interest income were the result of decreases in net warehouse interest income from both LHFS and LHFI. The decreases in net warehouse interest income from LHFS were primarily due to the decreases in the net spreads shown below, as the short-term interest rates upon which we incur interest expense decreased at a slower rate than the mortgage rates upon which we earn interest income. Additionally, the average balances of loans outstanding were lower in 2021 than in 2020 as seen below.

The decreases in net warehouse interest income from LHFI were primarily due to decreases in the average outstanding balances and the net spreads shown below. The average outstanding balances decreased due to low origination activity during the year ended December 31, 2020, as the market for interim loans was interrupted due to the pandemic. The payoffs we had in 2020 were not fully replaced with new originations, resulting in a lower starting balance in 2021 than in 2020. We have seen an increase in our interim loan volume in 2021; however, payoffs continue to outpace originations as more production volume is going to our Interim Program JV, contributing to the lower average outstanding balances in LHFI. The decreases in net spreads were the result of having a larger balance of LHFI funded with corporate cash in 2020 than 2021.

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	For the three months ended					For the nine months ended
	September 30,					September 30,
Net Warehouse Interest Income Details (dollars in thousands)	2021			2020		2021			2020
Average LHFS Outstanding Balance	$	1,780,594		$	1,845,687	$	1,458,110		$	1,759,594
Dollar Change	$	(65,093)				$	(301,484)
Percentage Change		(4)	%				(17)	%
LHFS Net Spread (basis points)		84			106		83			96
Basis Point Change		(22)					(13)
Percentage Change		(21)	%				(14)	%
Average LHFI Outstanding Balance	$	274,338		$	329,559	$	278,181		$	379,249
Dollar Change	$	(55,221)				$	(101,068)
Percentage Change		(17)	%				(27)	%
LHFI Net Spread (basis points)		271			326		273			344
Basis Point Change		(55)					(71)
Percentage Change		(17)	%				(21)	%

Escrow Earnings and Other Interest Income. For the nine months ended September 30, 2021, the decrease was primarily due to a significant decrease in average earnings rate on our escrow accounts resulting from a decrease in short-term interest rates in the broader market, slightly offset by an increase in the average balance of escrow accounts due to an increase in the average servicing portfolio.

Other Revenues. For the three and nine months ended September 30, 2021, the increases were driven primarily by increases in prepayment fees and research subscription fees. Prepayment fees increased $6.6 million and $4.1 million for the three and nine months ended September 30, 2021, respectively. We acquired Zelman in July 2021, which resulted in the addition of $4.5 million in new revenues for both the three and nine months ended September 30, 2021.

Expenses

Personnel. For the three months ended September 30, 2021, the increase was primarily the result of (i) a $40.9 million increase in commission costs due to higher origination fees and property sales broker fees, (ii) a $6.9 million increase in salaries and benefits due to a 22% increase in average headcount to support our growth efforts, (iii) a $3.6 million increase in the accrual for subjective bonuses due to the increase in average headcount and the Company’s financial performance, and (iv) a $3.8 million increase in stock-based compensation expense due to a higher expense associated with a stock grant provided to the vast majority of our non-executive employee base in the fourth quarter of 2020 and stock-based compensation expense associated with our performance share plans due to the Company’s improved financial performance for the third quarter of 2021 compared to the same period in 2020.

For the nine months ended September 30, 2021, the increase was primarily the result of (i) a $66.0 million increase in commission costs due to higher origination fees and property sales broker fees, (ii) an $18.4 million increase in salaries and benefits due to a 16% increase in average headcount to support our growth efforts, and (iii) an $8.7 million increase in stock-based compensation expense due to higher expense associated with a stock grant provided to the vast majority of our non-executive employee base in the fourth quarter of 2020 and stock-based compensation expense associated with our performance share plans due to the Company’s improved financial performance in 2021 compared to 2020.

Amortization and Depreciation. For the three and nine months ended September 30, 2021, the increase was primarily attributed to loan origination activity and the resulting growth in the average MSR balance. Over the past 12 months, we have added $124.2 million of MSRs, net of amortization and write offs due to prepayment.

Provision (Benefit) for Credit Losses. For the three months ended September 30, 2021, the decrease in the provision for credit losses was primarily attributable to $2.4 million in additional reserves recorded in the third quarter of 2020 for a loan that defaulted in 2019, with no comparable activity in the third quarter of 2021.

For the nine months ended September 30, 2021, the change in the provision (benefit) for credit losses was due to improvements in the forecasted unemployment rate and sustained strength in multifamily operating fundamentals. The forecasted loss rate for our March 31, 2020 CECL reserve calculation was seven basis points compared to one basis point upon implementation at January 1, 2020 as a result of the expected

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negative economic impacts of the COVID-19 pandemic, resulting in a significant provision expense for the nine months ended September 30, 2020, primarily during the first quarter of 2020. With the economic improvements noted above, we lowered our forecast-period loss rate from six basis points at December 31, 2020 to three basis points for our June 30, 2021 CECL reserve calculation, resulting in a large benefit for the first six months of 2021. We maintained the loss rate at September 30, 2021, resulting in a small provision for credit losses in the third quarter of 2021, but an overall benefit for credit losses for the nine months ended September 30, 2021.

We have not experienced any defaults and minimal delinquencies in our at-risk servicing portfolio since the onset of the pandemic.

Other Operating Expenses. The increase for the three months ended September 30, 2021, primarily stemmed from a $3.8 million increase in professional fees largely due to $2.9 million of due diligence costs for our pending acquisition of Alliant, a $1.4 million increase in travel and entertainment costs as our bankers and brokers resumed traveling for in person meetings, and a $1.4 million increase in marketing costs to support our growth initiatives.

The increase for the nine months ended September 30, 2021 was largely attributable to a $6.1 million increase in professional fees largely due to $2.9 million of due diligence costs for our pending acquisition of Alliant, a $2.1 million increase in marketing costs to support our growth initiatives, a $1.8 million increase in office expenses due to the increased average headcount year over year and increased technology costs to support our growth, and a $3.3 million increase in miscellaneous expenses.

Income Tax Expense. For the three months ended September 30, 2021, the increase in income tax expense relates primarily to the 37% increase in income from operations and a decrease in the absolute and relative realizable excess tax benefits recognized year over year as the number of stock options exercised decreased year over year.

For the nine months ended September 30, 2021, the increase in income tax expense relates primarily to a 14% increase in income from operations and a $1.2 million absolute increase in realizable excess tax benefits recognized year over year due to a substantial increase in the number of shares of restricted stock vested and an increase in the price at which these awards vested.

We do not expect our annual estimated effective tax rate to differ significantly from the 26.3% rate estimated for the three months ended September 30, 2021 as we do not have significant permanent differences. Accordingly, we expect an estimated effective tax rate of between approximately 25.5% and 26.5% for the remainder of the year. The effective tax rate decreased year over year from 23.5% in 2020 to 23.2% in 2021 due to the aforementioned decreases in the absolute and relative realizable excess tax benefits, partially offset by a slightly lower estimated annual effective tax rate in 2021 compared to 2020.

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP, we use adjusted EBITDA, a non-GAAP financial measure. The presentation of adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. When analyzing our operating performance, readers should use adjusted EBITDA in addition to, and not as an alternative for, net income. Adjusted EBITDA represents net income before income taxes, interest expense on our term loan facility, and amortization and depreciation, adjusted for provision for credit losses net of write-offs, stock-based incentive compensation charges, and the fair value of expected net cash flows from servicing, net. Because not all companies use identical calculations, our presentation of adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, adjusted EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not reflect certain cash requirements such as tax and debt service payments. The amounts shown for adjusted EBITDA may also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges that are used to determine compliance with financial covenants.

We use adjusted EBITDA to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. We believe that this non-GAAP measure, when read in conjunction with our GAAP financials, provides useful information to investors by offering:

●

the ability to make more meaningful period-to-period comparisons of our ongoing operating results;

●

the ability to better identify trends in our underlying business and perform related trend analyses; and

●

a better understanding of how management plans and measures our underlying business.

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We believe that adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that adjusted EBITDA should only be used to evaluate our results of operations in conjunction with net income. Adjusted EBITDA is reconciled to net income as follows:

ADJUSTED FINANCIAL METRIC RECONCILIATION TO GAAP


	For the three months ended				For the nine months ended
	September 30,				September 30,
(in thousands)	2021		2020		2021		2020
Reconciliation of Walker & Dunlop Net Income to Adjusted EBITDA
Walker & Dunlop Net Income	$	71,721	$	53,190	$	185,831	$	163,078
Income tax expense		22,953		15,925		56,311		50,076
Interest expense on corporate debt		1,766		1,786		5,291		6,724
Amortization and depreciation		53,498		41,919		148,879		123,998
Provision (benefit) for credit losses		1,266		3,483		(14,380)		32,029
Net write-offs		—		—		—		—
Stock-based compensation expense		10,708		6,927		26,945		18,216
Fair value of expected net cash flows from servicing, net		(89,482)		(78,065)		(209,266)		(236,434)
Adjusted EBITDA	$	72,430	$	45,165	$	199,611	$	157,687

The following table presents a period-to-period comparison of the components of adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020.

ADJUSTED EBITDA – THREE MONTHS


	For the three months ended
	September 30,				Dollar		Percentage
(dollars in thousands)	2021		2020		Change		Change
Loan origination and debt brokerage fees, net	$	123,242	$	83,825	$	39,417	47	%
Servicing fees		70,628		60,265		10,363	17
Property sales broker fees		33,677		6,756		26,921	398
Net warehouse interest income		5,583		7,558		(1,975)	(26)
Escrow earnings and other interest income		2,032		2,275		(243)	(11)
Other revenues		21,577		8,272		13,305	161
Personnel		(159,473)		(107,621)		(51,852)	48
Net write-offs		—		—		—	N/A
Other operating expenses		(24,836)		(16,165)		(8,671)	54
Adjusted EBITDA	$	72,430	$	45,165	$	27,265	60

ADJUSTED EBITDA – NINE MONTHS


	For the nine months ended
	September 30,				Dollar		Percentage
(dollars in thousands)	2021		2020		Change		Change
Loan origination and debt brokerage fees, net	$	306,593	$	238,105	$	68,488	29	%
Servicing fees		205,658		172,561		33,097	19
Property sales broker fees		65,173		19,928		45,245	227
Net warehouse interest income		14,768		22,454		(7,686)	(34)
Escrow earnings and other interest income		5,972		15,689		(9,717)	(62)
Other revenues		44,490		29,051		15,439	53
Personnel		(380,872)		(292,777)		(88,095)	30
Net write-offs		—		—		—	N/A

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Other operating expenses		(62,171)			(47,324)			(14,847)		31
Adjusted EBITDA	$	199,611		$	157,687		$	41,924		27

Three and nine months ended September 30, 2021 compared to three and nine months ended September 30, 2020

Loan origination and debt brokerage fees, net increased due to significant increases in overall debt financing volumes. Servicing fees increased due to increases in the average servicing portfolio period over period as a result of the substantial loan originations and relatively few payoffs over the last 12 months and increases in the average servicing fee. Property sales broker fees increased as a result of the increases in property sales volumes. Net warehouse interest income decreased primarily due to decreases in the net spreads and average outstanding balances. Escrow earnings and other interest income decreased primarily as a result of declines in the average earnings rates. The increases in personnel expense were primarily due to increased commission costs due to the increases in total transaction volumes and salaries and benefits resulting from increases in average headcount. Other operating expenses increased as a result of the overall growth of the Company over the past year and from increased costs associated with due diligence for acquisitions.

Financial Condition

Cash Flows from Operating Activities

Our cash flows from operating activities are generated from loan sales, servicing fees, escrow earnings, net warehouse interest income, property sales broker fees, research subscription fees, investment banking advisory fees, and other income, net of loan originations and operating costs. Our cash flows from operations are impacted by the fees generated by our loan originations, the timing of loan closings, and the period of time loans are held for sale in the warehouse loan facility prior to delivery to the investor.

Cash Flows from Investing Activities

We usually lease facilities and equipment for our operations. Our cash flows from investing activities also include the funding and repayment of loans held for investment, contributions to and distributions from joint ventures, purchases of equity-method investments, and the purchase of AFS securities pledged to Fannie Mae. We opportunistically invest cash for acquisitions and MSR portfolio purchases.

Cash Flows from Financing Activities

We use our warehouse loan facilities and, when necessary, our corporate cash to fund loan closings, both for loans held for sale and loans held for investment. We believe that our current warehouse loan facilities are adequate to meet our increasing loan origination needs. Historically, we have used a combination of long-term debt and cash on hand to fund large acquisitions. Additionally, we repurchase shares, pay cash dividends, make long-term debt principal payments, and repay short-term borrowings on a regular basis. We issue stock primarily for exercise of stock options (cash inflow) and for acquisitions (non-cash transactions).

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

The following table presents a period-to-period comparison of the significant components of cash flows for the nine months ended September 30, 2021 and 2020.

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SIGNIFICANT COMPONENTS OF CASH FLOWS


	For the nine months ended September 30,				Dollar		Percentage
(dollars in thousands)	2021		2020		Change		Change
Net cash provided by (used in) operating activities	$	(196,979)	$	(2,296,868)	$	2,099,889	(91)	%
Net cash provided by (used in) investing activities		49,325		147,624		(98,299)	(67)
Net cash provided by (used in) financing activities		194,265		2,341,258		(2,146,993)	(92)
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period ("Total cash")		404,613		328,580		76,033	23

Cash flows from (used in) operating activities
Net receipt (use) of cash for loan origination activity	$	(301,921)	$	(2,406,414)	$	2,104,493	(87)	%
Net cash provided by (used in) operating activities, excluding loan origination activity		104,942		109,546		(4,604)	(4)

Cash flows from (used in) investing activities
Purchases of pledged AFS securities	$	(7,250)	$	(14,130)	$	6,880	(49)	%
Proceeds from the prepayment/sale of pledged AFS securities		28,781		15,531		13,250	85
Purchase of equity-method investments		(8,029)		(974)		(7,055)	724
Acquisitions, net of cash received		(62,208)		(46,784)		(15,424)	33
Net payoff of (investment in) loans held for investment		127,591		199,569		(71,978)	(36)
Net distributions from (investments in) joint ventures	$	(24,053)	$	(3,538)	$	(20,515)	580

Cash flows from (used in) financing activities
Borrowings (repayments) of warehouse notes payable, net	$	333,887	$	2,497,627	$	(2,163,740)	(87)	%
Borrowings of interim warehouse notes payable		154,661		34,028		120,633	355
Repayments of interim warehouse notes payable		(157,277)		(109,860)		(47,417)	43
Repurchase of common stock		(15,686)		(42,525)		26,839	(63)
Repayment of secured borrowings		(73,312)		—		(73,312)	N/A
Cash dividends paid		(48,268)		(33,984)		(14,284)	42

The change in cash flows from operating activities was driven primarily by loans originated and sold. Such loans are held for short periods of time, generally less than 60 days, and impact cash flows presented as of a point in time. The decrease in cash flows used in loan origination activities is primarily attributable to a decrease in originations outpacing sales of loans held for sale (net cash used) by $301.9 million in 2021 compared to $2.4 billion in 2020. Our Agency debt financing activity decreased year over year, which resulted in less cash used in originations during the first nine months of 2021. Excluding cash used for the origination and sale of loans, cash flows provided by operations were $104.9 million in 2021, down from $109.5 million in 2020. The decrease is primarily the result of a $64.6 million higher adjustment for other operating activities, net, partially offset by a lower adjustment for gains attributable to the fair value of future servicing rights, net of guaranty obligation of $27.2 million and a lower adjustment for change in the fair value of premiums and origination fees of $31.3 million.

The decrease in cash provided by investing activities is primarily attributable to (i) a greater increase in the originations of loans held for investments than the payoffs of these loans as our origination volume for 2020 was low due to the COVID-19 pandemic, (ii) an increase in the cash used in acquisitions due to an increase in the average size of acquisitions in 2021 than 2020, (iii) an increase in net investments in joint ventures as our joint ventures have been growing in 2021, and (iv) an increase in the purchase of equity-method investments, partially offset by (i) an increase in the prepayment of pledged AFS securities and (ii) a reduction in the purchases of pledged AFS securities. Pledged AFS securities prepay at unpredictable times. Our purchases were less in 2021 as several prepayments occurred close to the end of the third quarter of 2021, resulting in little time to reinvest prior to September 30, 2021. We have increased our investments in equity-method investments as we continue to invest in small strategic investments.

The decrease in cash provided by financing activity was primarily attributable to a decrease in the net warehouse borrowings, the repayment of our secured borrowings, and an increase in cash dividends paid, partially offset by an increase in net borrowings of interim warehouse notes payables and a decrease in cash paid for stock repurchases. The decrease in net borrowings of warehouse notes payable during 2021 was largely due to the decrease in cash used for loan origination activity, as noted above. The repayment of secured borrowings was the

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result of the repayment of the secured borrowing in the second quarter of 2021, a unique transaction. Cash dividends paid increased as a result of the increase in our dividend to $0.50 per share in 2021 compared to $0.36 per share in 2020. Net borrowings of interim warehouse notes payable increased due to the increase in originations of loans held for investments noted above. The decrease in cash paid for repurchases of common stock was related to repurchases under approved stock repurchase programs. In 2021, we did not repurchase any shares under approved repurchase programs, while in 2020 we repurchased $23.7 million of shares under such programs.

Liquidity and Capital Resources

Uses of Liquidity, Cash and Cash Equivalents

Our significant recurring cash flow requirements consist of liquidity to (i) fund loans held for sale; (ii) fund loans held for investment under the Interim Loan Program; (iii) pay cash dividends; (iv) fund our portion of the equity necessary for the operations of the Interim Program JV, the Appraisal JV, and other equity-method investments; (v) meet working capital needs to support our day-to-day operations, including debt service payments, servicing advances and payments for salaries, commissions, and income taxes; and (vi) meet working capital needs to satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and to meet the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.

Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate our servicing authority for all or some of the portfolio if, at any time, it determines that our financial condition is not adequate to support our obligations under the DUS agreement. We are required to maintain acceptable net worth as defined in the standards, and we satisfied the requirements as of September 30, 2021. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk-sharing. As of September 30, 2021, the net worth requirement was $250.2 million, and our net worth was $1.1 billion, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of September 30, 2021, we were required to maintain at least $49.5 million of liquid assets to meet our operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, Ginnie Mae and our warehouse facility lenders. As of September 30, 2021, we had operational liquidity of $254.7 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.

We paid a cash dividend of $0.50 per share in each of the first three quarters of 2021, which is 39% higher than the quarterly dividend paid in each of the first three quarters of 2020. On November 3, 2021, our Board of Directors declared a dividend of $0.50 per share for the fourth quarter of 2021. The dividend will be paid on November 29, 2021 to all holders of record of the Company’s restricted and unrestricted common stock as of November 19, 2021.

Over the past three years, we have returned $210.7 million to investors in the form of the repurchase of 1.5 million shares of our common stock under share repurchase programs for a cost of $72.0 million and cash dividend payments of $138.7 million. Additionally, we have invested $179.0 million in acquisitions. On occasion, we may use cash to fully fund some loans held for investment or loans held for sale instead of using our warehouse lines. As of September 30, 2021, we used corporate cash to fully fund loans held for investment with an unpaid principal balance of $53.0 million. We continually seek opportunities to complete additional acquisitions if we believe the economics are favorable.

In February 2021, our Board of Directors approved a stock repurchase program that permits the repurchase of up to $75 million of shares of our common stock over a 12-month period beginning February 12, 2021. Through September 30, 2021 we have not repurchased any shares under the 2021 repurchase program and have $75.0 million of remaining capacity under that program.

Historically, our cash flows from operations and warehouse facilities have been sufficient to enable us to meet our short-term liquidity needs and other funding requirements. We believe that cash flows from operations will continue to be sufficient for us to meet our current obligations for the foreseeable future.

Restricted Cash and Pledged Securities

Restricted cash consists primarily of good faith deposits held on behalf of borrowers between the time we enter into a loan commitment with the borrower and the investor purchases the loan. We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program, our only off-balance sheet arrangement. We are required to secure this obligation by assigning collateral to Fannie Mae. We meet this obligation by assigning pledged securities to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires collateral for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery

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of the loan to Fannie Mae. Collateral held in the form of money market funds holding U.S. Treasuries is discounted 5%, and Agency MBS are discounted 4% for purposes of calculating compliance with the collateral requirements. As of September 30, 2021, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $97.2 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans. We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital.

We are in compliance with the September 30, 2021 collateral requirements as outlined above. As of September 30, 2021, reserve requirements for the September 30, 2021 DUS loan portfolio will require us to fund $64.2 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae has assessed the DUS Capital Standards in the past and may make changes to these standards in the future. We generate sufficient cash flows from our operations to meet these capital standards and do not expect any future changes to have a material impact on our future operations; however, any future changes to collateral requirements may adversely impact our available cash.

Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and unrestricted portions of the required reserves each year. We satisfied these requirements as of September 30, 2021.

Sources of Liquidity: Warehouse Facilities

The following table provides information related to our warehouse facilities as of September 30, 2021.


	September 30, 2021
(dollars in thousands)	Committed		Uncommitted		Total Facility		Outstanding
Facility⁽¹⁾	Amount		Amount		Capacity		Balance		Interest rate⁽²⁾
Agency Warehouse Facility #1	$	425,000	$	—	$	425,000	$	277,872	30-day LIBOR plus 1.30%
Agency Warehouse Facility #2		700,000		300,000		1,000,000		346,047	30-day LIBOR plus 1.30%
Agency Warehouse Facility #3		600,000		265,000		865,000		378,624	30-day LIBOR plus 1.30%
Agency Warehouse Facility #4		350,000		—		350,000		136,616	30-day LIBOR plus 1.30%
Agency Warehouse Facility #5		—		1,000,000		1,000,000		885,308	30-day LIBOR plus 1.45%
Agency Warehouse Facility #6		150,000		100,000		250,000		118,124	30-day LIBOR plus 1.40%
Agency Warehouse Facility #7		150,000		50,000		200,000		92,293	30-day LIBOR plus 1.30%
Total National Bank Agency Warehouse Facilities	$	2,375,000	$	1,715,000	$	4,090,000	$	2,234,884
Fannie Mae repurchase agreement, uncommitted line and open maturity	$	—	$	1,500,000	$	1,500,000	$	482,861
Total Agency Warehouse Facilities		2,375,000		3,215,000		5,590,000		2,717,745
Interim Warehouse Facility #1	$	135,000	$	—	$	135,000	$	—	30-day LIBOR plus 1.90%
Interim Warehouse Facility #2		100,000		—		100,000		—	30-day LIBOR plus 1.65% to 2.00%
Interim Warehouse Facility #3		200,000		—		200,000		111,817	30-day LIBOR plus 1.75% to 3.25%
Interim Warehouse Facility #4		19,810		—		19,810		19,810	30-day LIBOR plus 3.00%
Total National Bank Interim Warehouse Facilities		454,810		—		454,810		131,627
Total warehouse facilities	$	2,829,810	$	3,215,000	$	6,044,810	$	2,849,372

(1)	Agency Warehouse Facilities, including the Fannie Mae repurchase agreement are used to fund loans held for sale, while Interim Warehouse Facilities are used to fund loans held for investment.

(2)	Interest rate presented does not include the effect of interest rate floors.

Agency Warehouse Facilities

As of September 30, 2021, we had seven warehouse lines of credit in the aggregate amount of $4.1 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”) that we use to fund substantially all of our loan originations. The seven warehouse facilities are revolving commitments we expect to renew annually (consistent with industry practice), and the Fannie Mae facility is provided on an uncommitted basis without a specific maturity date. Our ability to originate mortgage loans depends upon our ability to secure and maintain these types of short-term financing agreements on acceptable terms.

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Agency Warehouse Facility #1:

We have a warehousing credit and security agreement with a national bank for a $425.0 million committed warehouse line that is scheduled to mature on December 24, 2021. The agreement provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance and borrowings under this line bear interest at the 30-day London Interbank Offered Rate (“LIBOR”) plus 130 basis points. During the second quarter of 2021, we executed an amendment that decreased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 140 basis points and decreased the 30-day LIBOR floor to zero from 25 basis points. In October 2021, we executed an amendment to the agreement that extended the maturity date to December 24, 2021. No other material modifications have been made to the agreement in 2021.

Agency Warehouse Facility #2:

We have a warehousing credit and security agreement with a national bank for a $700.0 million committed warehouse line that is scheduled to mature on April 14, 2022. The committed warehouse facility provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and borrowings under this line bear interest at the 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $300.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. During the second quarter of 2021, we executed amendments that extended the maturity date thereunder until April 14, 2022 and decreased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 140 basis points. No other material modifications have been made to the agreement during 2021.

Agency Warehouse Facility #3:

We have a $600.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on May 14, 2022. The committed warehouse facility provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. During the second quarter of 2021, we executed amendments that extended the maturity date to May 14, 2022 for the committed borrowing capacity. Additionally, the amendments increased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 115 basis points and decreased the 30-day LIBOR floor to zero basis points from 50 basis points. No other material modifications have been made to the agreement during 2021.

Agency Warehouse Facility #4:

We have a $350.0 million committed warehouse credit and security agreement with a national bank that is scheduled to mature on June 22, 2022. The warehouse facility provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, FHA, and defaulted HUD and FHA loans and has a sublimit of $75.0 million to fund defaulted HUD and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. During the second quarter of 2021, we executed an amendment that extended the maturity date thereunder until June 22, 2022, decreased the borrowing rate to 30-day LIBOR plus 130 basis points from 30-day LIBOR plus 140 basis points, and decreased the 30-day LIBOR floor to five basis points from 25 basis points. No other material modifications have been made to the agreement during 2021.

Agency Warehouse Facility #5:

We have a master repurchase agreement with a national bank for a $1.0 billion uncommitted advance credit facility that is scheduled to mature on September 15, 2022. The facility provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans. Advances are made at 100% of the loan balance, and the borrowings under the repurchase agreement bear interest at a rate of 30-day LIBOR plus 145 basis points. During the third quarter of 2021, we executed amendments to the agreement related to Agency Warehouse Facility #5 that extended the maturity date to September 15, 2022. No other material modifications have been made to the agreement during 2021.

Agency Warehouse Facility #6:

During the first quarter of 2021, we entered into an agreement with a national bank to establish Agency Warehouse Facility #6. The facility has a $150.0 million committed borrowing capacity and provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans under the facility. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a

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rate of LIBOR plus 140 basis points. The agreement also provides $100.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. The negative and financial covenants of the warehouse agreement substantially conform to those of the warehouse agreement for Agency Warehouse Facility #1, as described in our 2020 Form 10-K. No material modifications have been made to the agreement during 2021.

Agency Warehouse Facility #7:

During the third quarter of 2021, we entered into an agreement to establish Agency Warehouse Facility #7. The warehouse facility has a $150.0 million maximum committed borrowing capacity, provides us with the ability to fund Fannie Mae, Freddie Mac, HUD, and FHA loans, and matures on August 24, 2022. Advances are made at 100% of the loan balance, and the borrowings under the warehouse agreement bear interest at a rate of 30-day LIBOR plus 130 basis points. In addition to the committed borrowing capacity, the agreement provides $50.0 million of uncommitted borrowing capacity that bears interest at the same rate as the committed facility. The negative and financial covenants of the warehouse agreement substantially conform to those of the warehouse agreement for Agency Warehouse Facility #1, as described in our 2020 Form 10-K. No material modifications have been made to the agreement during 2021.

Uncommitted Agency Warehouse Facility:

We have a $1.5 billion uncommitted facility with Fannie Mae under its ASAP funding program. After approval of certain loan documents, Fannie Mae will fund loans after closing, and the advances are used to repay the primary warehouse line. Fannie Mae will advance 99% of the loan balance. There is no expiration date for this facility. The uncommitted facility has no specific negative or financial covenants.

Interim Warehouse Facilities

To assist in funding loans held for investment under the Interim Loan Program, we have four warehouse facilities with certain national banks in the aggregate amount of $454.8 million as of September 30, 2021 (“Interim Warehouse Facilities”). Consistent with industry practice, three of these facilities are revolving commitments we expect to renew annually or bi-annually, and one is a commitment that matures according to the maturity date of the underlying loan it finances. Our ability to originate loans held for investment depends upon our ability to secure and maintain these types of short-term financings on acceptable terms.

Interim Warehouse Facility #1:

We have a $135.0 million committed warehouse line agreement that is scheduled to mature on May 14, 2022. The facility provides us with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years, using available cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company and bear interest at 30-day LIBOR plus 190 basis points. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. During the second quarter of 2021, we executed amendments that extended the maturity date to May 14, 2022 and decreased the 30-day LIBOR floor to zero basis points from 50 basis points. No other material modifications have been made to the agreement during 2021.

Interim Warehouse Facility #2:

We have a $100.0 million committed warehouse line agreement that is scheduled to mature on December 13, 2021. The agreement provides us with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years, using available cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company. All borrowings originally bear interest at 30-day LIBOR plus 165 to 200 basis points (“the spread”). The spread varies according to the type of asset the borrowing finances. The lender retains a first priority security interest in all mortgages funded by such advances on a cross-collateralized basis. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. No material modifications have been made to the agreement during 2021.

Interim Warehouse Facility #3:

We have a $200.0 million repurchase agreement with a national bank that is scheduled to mature on September 29, 2022. The agreement provides us with the ability to fund first mortgage loans on multifamily real estate properties for periods of up to three years, using available

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cash in combination with advances under the facility. Borrowings under the facility are full recourse to the Company. The borrowings under the agreement bear interest at a rate of 30-day LIBOR plus 175 to 325 basis points. The spread varies according to the type of asset the borrowing finances. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. During the third quarter of 2021, we executed amendments to the agreement related to Interim Warehouse Facility #3 that extended the maturity date to September 29, 2022, increased the committed borrowing capacity to $200.0 million, and eliminated the uncommitted borrowing capacity. No other material modifications have been made to the agreement during 2021.

Interim Warehouse Facility #4:

We have a $19.8 million committed warehouse loan and security agreement with a national bank that funds one specific loan. The agreement provides for a maturity date to coincide with the earlier of the maturity date for the underlying loan or the stated maturity date of October 1, 2022. Borrowings under the facility are full recourse and bear interest at 30-day LIBOR plus 300 basis points, with a floor of 450 basis points. Repayments under the credit agreement are interest-only, with principal repayments made upon the earlier of the refinancing of an underlying mortgage or the maturity of an advance under the credit agreement. The committed warehouse loan and security agreement has only two financial covenants, both of which are similar to the other Interim Warehouse Facilities. We may request additional capacity under the agreement to fund specific loans. In October 2021, we executed an amendment related to Interim Warehouse Facility #4 that extended the stated maturity date to October 1, 2022. No other material modifications have been made to the agreement during 2021.

The warehouse agreements above contain cross-default provisions, such that if a default occurs under any of our warehouse agreements, generally the lenders under our other warehouse agreements could also declare a default. As of September 30, 2021, we were in compliance with all of our warehouse line covenants.

We believe that the combination of our capital and warehouse facilities is adequate to meet our loan origination needs.

Note Payable

On November 7, 2018, we entered into a senior secured credit agreement (the “Credit Agreement”) that amended and restated our prior credit agreement and provided for a $300.0 million term loan (the “Term Loan”). The Term Loan was issued at a 0.5% discount, has a stated maturity date of November 7, 2025, and bears interest at 30-day LIBOR plus 200 basis points. At any time, we may also elect to request one or more incremental term loan commitments not to exceed $150.0 million, provided that the total indebtedness would not cause the leverage ratio (as defined in the Credit Agreement) to exceed 2.00 to 1.00.

We are obligated to repay the aggregate outstanding principal amount of the Term Loan in consecutive quarterly installments equal to $0.7 million on the last business day of each of March, June, September, and December. The Term Loan also requires certain other prepayments in certain circumstances pursuant to the terms of the Credit Agreement. The final principal installment of the Term Loan is required to be paid in full on November 7, 2025 (or, if earlier, the date of acceleration of the Term Loan pursuant to the terms of the Credit Agreement) and will be in an amount equal to the aggregate outstanding principal of the Term Loan on such date (together with all accrued interest thereon).

Our obligations under the Credit Agreement are guaranteed by Walker & Dunlop Multifamily, Inc., Walker & Dunlop, LLC, Walker & Dunlop Capital, LLC, and W&D BE, Inc., each of which is a direct or indirect wholly owned subsidiary of the Company (together with the Company, the “Loan Parties”), pursuant to the Amended and Restated Guarantee and Collateral Agreement entered into on November 7, 2018 among the Loan Parties and Wells Fargo Bank, National Association, as administrative agent (the “Guarantee and Collateral Agreement”). Subject to certain exceptions and qualifications contained in the Credit Agreement, the Company is required to cause any newly created or acquired subsidiary, unless such subsidiary has been designated as an Excluded Subsidiary (as defined in the Credit Agreement) by the Company in accordance with the terms of the Credit Agreement, to guarantee the obligations of the Company under the Credit Agreement and become a party to the Guarantee and Collateral Agreement. The Company may designate a newly created or acquired subsidiary as an Excluded Subsidiary, so long as certain conditions and requirements provided for in the Credit Agreement are met. As of September 30, 2021, the outstanding unpaid principal balance of the Term Loan was $292.5 million.

The note payable and the warehouse facilities are senior obligations of the Company. As of September 30, 2021, we were in compliance with all such covenants related to the Credit Agreement.

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To allow us to fund the acquisition of Alliant, we are currently in the process of refinancing and upsizing our Note payable (“existing term loan”) to $600 million. We have received commitments well in excess of the $600 million targeted amount. The new term loan is expected to close during the fourth quarter of 2021 simultaneously with the closing of the acquisition of Alliant. The proceeds from the new term loan will be used to repay the existing term loan and to fund a significant amount of the $361 million cash due at the closing of the acquisition of Alliant. The new term loan is expected to have a term of seven years.

Credit Quality and Allowance for Risk-Sharing Obligations

The following table sets forth certain information useful in evaluating our credit performance.


	September 30,
(dollars in thousands)	2021			2020
Key Credit Metrics
Risk-sharing servicing portfolio:
Fannie Mae Full Risk	$	44,069,885		$	37,018,792
Fannie Mae Modified Risk		8,235,475			9,165,490
Freddie Mac Modified Risk		36,883			52,685
Total risk-sharing servicing portfolio	$	52,342,243		$	46,236,967

Non-risk-sharing servicing portfolio:
Fannie Mae No Risk	$	12,593		$	40,267
Freddie Mac No Risk		38,002,131			35,673,424
GNMA - HUD No Risk		9,894,893			9,639,820
Brokered		13,429,801			11,513,521
Total non-risk-sharing servicing portfolio	$	61,339,418		$	56,867,032
Total loans serviced for others	$	113,681,661		$	103,103,999
Interim loans (full risk) servicing portfolio		238,713			273,754
Total servicing portfolio unpaid principal balance	$	113,920,374		$	103,377,753

Interim Program JV Managed Loans ⁽¹⁾		918,518			639,466

At risk servicing portfolio ⁽²⁾	$	48,209,532		$	41,848,548
Maximum exposure to at risk portfolio ⁽³⁾		9,784,054			8,497,807
Defaulted loans		48,481			48,481

Defaulted loans as a percentage of the at-risk portfolio		0.10	%		0.12	%
Allowance for risk-sharing as a percentage of the at-risk portfolio		0.13			0.17
Allowance for risk-sharing as a percentage of maximum exposure		0.63			0.83

(1)

As of September 30, 2021, this balance consists entirely of Interim Program JV managed loans. As of September 30, 2020, this balance consists of $73.3 million of loans serviced directly for the Interim Program JV partner and $566.1 million of Interim Program JV managed loans. We indirectly share in a portion of the risk of loss associated with Interim Program JV managed loans through our 15% equity ownership in the Interim Program JV. We have no exposure to risk of loss for the loans serviced directly for the Interim Program JV partner. The balance of this line is included as a component of assets under management in the Supplemental Operating Data table above.

(2)

At-risk servicing portfolio is defined as the balance of Fannie Mae DUS loans subject to the risk-sharing formula described below, as well as a small number of Freddie Mac loans on which we share in the risk of loss. Use of the at-risk portfolio provides for comparability of the full risk-sharing and modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at-risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at-risk portfolio.

For example, a $15 million loan with 50% risk-sharing has the same potential risk exposure as a $7.5 million loan with full DUS risk sharing. Accordingly, if the $15 million loan with 50% risk-sharing were to default, we would view the overall loss as a percentage of the at-risk balance, or $7.5 million, to ensure comparability between all risk-sharing obligations. To date, substantially all of the risk-sharing obligations that we have settled have been from full risk-sharing loans.

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(3)

Represents the maximum loss we would incur under our risk-sharing obligations if all of the loans we service, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. The maximum exposure is not representative of the actual loss we would incur.

Fannie Mae DUS risk-sharing obligations are based on a tiered formula and represent substantially all of our risk-sharing activities. The risk-sharing tiers and the amount of the risk-sharing obligations we absorb under full risk-sharing are provided below. Except as described in the following paragraph, the maximum amount of risk-sharing obligations we absorb at the time of default is generally 20% of the origination unpaid principal balance (“UPB”) of the loan.


Risk-Sharing Losses		Percentage Absorbed by Us
First 5% of UPB at the time of loss settlement		100%
Next 20% of UPB at the time of loss settlement		25%
Losses above 25% of UPB at the time of loss settlement		10%
Maximum loss		20% of origination UPB

Fannie Mae can double or triple our risk-sharing obligation if the loan does not meet specific underwriting criteria or if a loan defaults within 12 months of its sale to Fannie Mae. We may request modified risk-sharing at the time of origination, which reduces our potential risk-sharing obligation from the levels described above.

We use several techniques to manage our risk exposure under the Fannie Mae DUS risk-sharing program. These techniques include maintaining a strong underwriting and approval process, evaluating and modifying our underwriting criteria given the underlying multifamily housing market fundamentals, limiting our geographic market and borrower exposures, and electing the modified risk-sharing option under the Fannie Mae DUS program.

The “Business” section of “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains a discussion of the risk-sharing caps we have with Fannie Mae.

We regularly monitor the credit quality of all loans for which we have a risk-sharing obligation. Loans with indicators of underperforming credit are placed on a watch list, assigned a numerical risk rating based on our assessment of the relative credit weakness, and subjected to additional evaluation or loss mitigation. Indicators of underperforming credit include poor financial performance, poor physical condition, poor management, and delinquency. A collateral-based reserve is recorded when it is probable that a risk-sharing loan will foreclose or has foreclosed, and a reserve for estimated credit losses and a guaranty obligation are recorded for all other risk-sharing loans.

As a result of the onset of the pandemic and the resulting forecasts for significant unemployment rates for the remainder of 2020, we adjusted the loss rate for the forecast period CECL reserve, resulting in a total allowance for risk-sharing obligation of $70.5 million as of September 30, 2020, or 17 basis points of the at-risk balance. During the first three quarters of 2021, economic conditions improved significantly, with reported unemployment rates and forecasts for future unemployment rates at improved rates compared to both December 31, 2020 and September 30, 2020. In response to the improving unemployment statistics, we adjusted the loss rate for the forecast period downwards during 2021, contributing $13.0 million of the $13.7 million benefit for risk-sharing obligations and a decrease in the allowance for risk-sharing obligations to $61.6 million as of September 30, 2021 from $75.3 million as of December 31, 2020, or 13 basis points and 17 basis points of the at-risk balance as of September 30, 2021 and December 31, 2020, respectively.

As of September 30, 2021, and 2020, two loans with an aggregate UPB of $48.5 million in our at-risk portfolio were in default. We had a provision for risk-sharing obligations of $1.3 million for both the three months ended September 30, 2021 and 2020. For the three months ended September 30, 2021 and 2020, the provision was entirely the result of increases in the balance of the at-risk servicing portfolio. We had a benefit for risk-sharing obligations of $13.7 million for the nine months ended September 30, 2021 compared to a provision for risk-sharing obligations of $28.9 million for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, the majority of the benefit for risk-sharing obligations was the result of a decrease in the CECL reserve due to improved unemployment forecasts partially offset by increases in the balance of the at-risk servicing portfolio. For the nine months ended September 30, 2020, the majority of the provision was the result of an increase in the forecasted losses resulting from the pandemic.

We have never been required to repurchase a loan.

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New/Recent Accounting Pronouncements

As seen in NOTE 2 in the financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q, there are no accounting pronouncements that the Financial Accounting Standards Board has issued and that have the potential to impact us but have not yet been adopted by us as of September 30, 2021.

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Item 3. Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

For loans held for sale to Fannie Mae, Freddie Mac, and HUD, we are not currently exposed to unhedged interest rate risk during the loan commitment, closing, and delivery processes. The sale or placement of each loan to an investor is negotiated prior to closing on the loan with the borrower, and the sale or placement is typically effectuated within 60 days of closing. The coupon rate for the loan is set at the same time we establish the interest rate with the investor.

Some of our assets and liabilities are subject to changes in interest rates. Earnings from escrows generally track LIBOR. 30-day LIBOR as of September 30, 2021 and 2020 was eight basis points and 15 basis points, respectively. The following table shows the impact on our annual escrow earnings due to a 100-basis point increase and decrease in 30-day LIBOR based on our escrow balances outstanding at each period end. A portion of these changes in earnings as a result of a 100-basis point increase in the 30-day LIBOR would be delayed several months due to the negotiated nature of some of our escrow arrangements.


	As of September 30,
Change in annual escrow earnings due to: (in thousands)	2021		2020
100 basis point increase in 30-day LIBOR	$	29,824	$	27,521
100 basis point decrease in 30-day LIBOR⁽¹⁾		(2,357)		(3,500)

The borrowing cost of our warehouse facilities used to fund loans held for sale and loans held for investment is based on LIBOR. The interest income on our loans held for investment is based on LIBOR. The LIBOR reset date for loans held for investment is the same date as the LIBOR reset date for the corresponding warehouse facility. The following table shows the impact on our annual net warehouse interest income due to a 100-basis point increase and decrease in 30-day LIBOR, based on our warehouse borrowings outstanding at each period end. The changes shown below do not reflect an increase or decrease in the interest rate earned on our loans held for sale.


	As of September 30,
Change in annual net warehouse interest income due to: (in thousands)	2021		2020
100 basis point increase in 30-day LIBOR	$	(26,212)	$	(29,530)
100 basis point decrease in 30-day LIBOR ⁽¹⁾		1,684		3,695

All of our corporate debt is based on 30-day LIBOR. The following table shows the impact on our annual earnings due to a 100-basis point increase and decrease in 30-day LIBOR based on our note payable balance outstanding at each period end.


	As of September 30,
Change in annual income from operations due to: (in thousands)	2021		2020
100 basis point increase in 30-day LIBOR	$	(2,925)	$	(2,955)
100 basis point decrease in 30-day LIBOR ⁽¹⁾		235		433

(1)

The decrease is limited to the 30-day LIBOR rate as of period end as 30-day LIBOR was less than 100 basis points.

LIBOR Transition

In the first quarter of 2021, the United Kingdom’s Financial Conduct Authority, the regulator for the administration of LIBOR, announced specific dates for its intention to stop publishing LIBOR rates, including the 30-day LIBOR (our primary reference rate) which is scheduled for June 30, 2023. It is expected that legacy LIBOR-based loans will transition to Secured Overnight Financing Rate (“SOFR”) before June 30, 2023. We continue to monitor our LIBOR exposure, review legal contracts and assess fallback language impacts, engage with our clients and other stakeholders, and monitor developments associated with LIBOR alternatives.

Market Value Risk

The fair value of our MSRs is subject to market risk. A 100-basis point increase or decrease in the weighted-average discount rate would decrease or increase, respectively, the fair value of our MSRs by approximately $37.2 million as of September 30, 2021, compared to $29.1

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million as of September 30, 2020. Our Fannie Mae and Freddie Mac servicing engagements provide for prepayment fees in the event of a voluntary prepayment prior to the expiration of the prepayment protection period. Our servicing contracts with institutional investors and HUD do not require them to provide us with prepayment fees. As of September 30, 2021, 89% of the servicing fees are protected from the risk of prepayment through prepayment provisions compared to 87% as of September 30, 2020. Given this significant level of prepayment protection, we do not hedge our servicing portfolio for prepayment risk.

Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.

Based on that evaluation, the principal executive officer and principal financial officer concluded that the design and operation of these disclosure controls and procedures as of the end of the period covered by this report were effective to provide reasonable assurance that information required to be disclosed in our reports under the Securities and Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may be party to various claims and litigation, none of which we believe is material. We cannot predict the outcome of any pending litigation and may be subject to consequences that could include fines, penalties and other costs, and our reputation and business may be impacted. Our management believes that any liability that could be imposed on us in connection with the disposition of any pending lawsuits would not have a material adverse effect on our business, results of operations, liquidity, or financial condition.

Item 1A. Risk Factors

We have included in Part I, Item 1A of our 2020 Form 10-K and in Part II, Item 1A of our Form 10-Q for the quarterly period ended June 30, 2021, descriptions of certain risks and uncertainties that could affect our business, future performance, or financial condition (the “Risk Factors”). Except as described below, there have been no material changes from the disclosures provided in the 2020 Form 10-K or our Form 10-Q for the quarterly period ended June 30, 2021 with respect to the Risk Factors. Investors should consider the Risk Factors prior to making an investment decision with respect to the Company’s stock.

Our acquisition of Alliant may not be completed on the terms or timeline currently contemplated, or at all.

On August 30, 2021, we entered into a Purchase Agreement to acquire Alliant and certain of its affiliates (the “Acquisition”). The closing of the Acquisition is subject to certain conditions, including required regulatory approvals and consents of Alliant’s investor and lender partners. It is not certain that these conditions will be met or waived, that the required approvals will be obtained, or that we will be able to successfully consummate the Acquisition as provided for in the Purchase Agreement, or at all. We face risks and uncertainties due both to the pendency of the Acquisition as well as the potential failure to consummate the Acquisition, including:

●

We may not realize any or all of the potential benefits of the Acquisition that could result from acquiring Alliant’s businesses;

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●

We will remain liable for significant transaction costs, including legal, financial advisory, accounting, and other costs relating to the Acquisition, even if it is not consummated;

●

If the Purchase Agreement is terminated before we complete the Acquisition, under some circumstances, we may have to pay a termination fee of $20.0 million; and

●

The attention of our management and employees may be diverted from day-to-day operations.

The occurrence of any of these events individually or in combination could have a material adverse effect on our stock price, business and cash flows, results of operations and financial position.

We may not be able to successfully integrate Alliant’s businesses into the Company in a timely fashion or at all and may encounter significant unexpected difficulties in integrating the businesses.

The Company and Alliant are independent organizations, each utilizing different systems, controls, processes and procedures. Following completion of the Acquisition, our ability to fully realize the anticipated benefits of the Acquisition will depend, to a large extent, on our ability to integrate Alliant’s businesses into the Company. The overall integration may result in unanticipated problems, expenses, liabilities, loss of client relationships, expenditure of resources and distraction of management and other employees. The difficulties of combining the operations include:

●

Management’s attention may be diverted to integration matters;

●

We may devote significant resources to integration, including relating to information technology;

●

Alliant is a privately held company and we may have difficulties integrating financial accounting systems, internal controls and standards, procedures and policies;

●

We may have difficulties managing the expanded operations of a larger and more complex company;

●

We may be unable to retain key personnel; and

●

We may have difficulties addressing the differences in the corporate cultures and management philosophies of the two companies while assimilating Alliant’s employees.

Therefore, there can be no assurance that the integration of Alliant’s businesses will result in the realization of the full benefits anticipated from the Acquisition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Under the 2020 Equity Incentive Plan, subject to the Company’s approval, grantees have the option of electing to satisfy minimum tax withholding obligations at the time of vesting or exercise by allowing the Company to withhold and purchase the shares of stock otherwise issuable to the grantee. During the quarter ended September 30, 2021, we purchased 14 thousand shares to satisfy grantee tax withholding obligations on share-vesting events. During the first quarter of 2021, the Company’s Board of Directors approved a stock repurchase program that permits the repurchase of up to $75.0 million of the Company’s common stock over a 12-month period beginning on February 12, 2021. During the quarter ended September 30, 2021 we did not repurchase any shares under this share repurchase program. The Company had $75.0 million of authorized share repurchase capacity remaining as of September 30, 2021. The following table provides information regarding common stock repurchases for the quarter ended September 30, 2021:

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				Total Number of	Approximate
				Shares Purchased as	Dollar Value
	Total Number	Average		Part of Publicly	of Shares that May
	of Shares	Price Paid		Announced Plans	Yet Be Purchased Under
Period	Purchased	per Share		or Programs	the Plans or Programs
July 1-31, 2021	4,447		104.46	—	$	75,000
August 1-31, 2021	661		103.48	—		75,000
September 1-30, 2021	8,605		110.50	—		75,000
3rd Quarter	13,713	$	108.21	—		75,000

On July 13, 2021, we issued 50,219 shares (the “Shares”) of our common stock as partial consideration for our purchase of the controlling interest of Zelman. All of the Shares are prohibited from being transferred until July 13, 2022. The issuance of the Shares was deemed to be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

(a) Exhibits:

2.1		Contribution Agreement, dated as of October 29, 2010, by and among Mallory Walker, Howard W. Smith, William M. Walker, Taylor Walker, Richard C. Warner, Donna Mighty, Michael Yavinsky, Edward B. Hermes, Deborah A. Wilson and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 2.1 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
2.2		Contribution Agreement, dated as of October 29, 2010, between Column Guaranteed LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 2.2 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
2.3		Amendment No. 1 to Contribution Agreement, dated as of December 13, 2010, by and between Walker & Dunlop, Inc. and Column Guaranteed LLC (incorporated by reference to Exhibit 2.3 to Amendment No. 6 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 13, 2010)
2.4		Purchase Agreement, dated June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, CW Financial Services LLC and CWCapital LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on June 15, 2012)
2.5	*†	Purchase Agreement, dated as of August 30, 2021, by and among Walker & Dunlop, Inc., WDAAC, LLC, Alliant Company, LLC, Alliant Capital, Ltd., Alliant Fund Asset Holdings, LLC, Alliant Asset Management Company, LLC, Alliant Strategic Investments II, LLC, ADC Communities, LLC, ADC Communities II, LLC, AFAH Finance, LLC, Alliant Fund Acquisitions, LLC, Vista Ridge 1, LLC, Alliant, Inc., Alliant ADC, Inc., Palm Drive Associates, LLC, and Shawn Horwitz
3.1		Articles of Amendment and Restatement of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 4 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on December 1, 2010)
3.2		Amended and Restated Bylaws of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 8, 2018)
4.1		Specimen Common Stock Certificate of Walker & Dunlop, Inc. (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-168535) filed on September 30, 2010)
4.2		Registration Rights Agreement, dated December 20, 2010, by and among Walker & Dunlop, Inc. and Mallory Walker, Taylor Walker, William M. Walker, Howard W. Smith, III, Richard C. Warner, Donna Mighty, Michael Yavinsky, Ted Hermes, Deborah A. Wilson and Column Guaranteed LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 27, 2010)
4.3		Stockholders Agreement, dated December 20, 2010, by and among William M. Walker, Mallory Walker, Column Guaranteed LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 27, 2010)
4.4		Piggy-Back Registration Rights Agreement, dated June 7, 2012, by and among Column Guaranteed, LLC, William M. Walker, Mallory Walker, Howard W. Smith, III, Deborah A. Wilson, Richard C. Warner, CW Financial Services LLC and Walker & Dunlop, Inc. (incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012 filed on August 9, 2012)
4.5		Voting Agreement, dated as of June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, Mallory Walker, William M. Walker, Richard Warner, Deborah Wilson, Richard M. Lucas, and Howard W. Smith, III, and CW Financial Services LLC (incorporated by reference to Annex C of the Company’s proxy statement filed on July 26, 2012)
4.6		Voting Agreement, dated as of June 7, 2012, by and among Walker & Dunlop, Inc., Walker & Dunlop, LLC, Column Guaranteed, LLC and CW Financial Services LLC (incorporated by reference to Annex D of the Company’s proxy statement filed on July 26, 2012)
10.1		Amendment No. 2 to Master Repurchase Agreement, dated as of August 23, 2021, by and among Walker & Dunlop, LLC, Walker & Dunlop, Inc., and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 26, 2021).
10.2		Amendment No. 3 to Master Repurchase Agreement, dated as of September 30, 2021, by and among Walker & Dunlop, LLC, Walker & Dunlop, Inc., and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 5, 2021).
10.3		Amended and Restated Letter, dated as of September 30, 2021, by and among Walker & Dunlop, LLC, Walker & Dunlop, Inc., and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 5, 2021).
31.1	*	Certification of Walker & Dunlop, Inc.'s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Walker & Dunlop, Inc.'s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	**	Certification of Walker & Dunlop, Inc.'s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	*	Inline XBRL Taxonomy Extension Schema Document
101.CAL	*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained an Exhibit 101)

*: Filed herewith.

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**: Furnished herewith. Information in this Form 10-Q furnished herewith shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

†: Schedules (or similar attachments) have been omitted from this exhibit pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish copies of any such schedules (or similar attachments) to the Securities and Exchange Commission upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Walker & Dunlop, Inc.
Date: November 4, 2021	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer


Date: November 4, 2021	By:	/s/ Stephen P. Theobald
		Stephen P. Theobald
		Executive Vice President and Chief Financial Officer

Exhibit 2.5

Execution Version

PURCHASE AGREEMENT

BY AND AMONG

WALKER & DUNLOP, INC.,

WDAAC, LLC,

THE FIRST TIER ACQUIRED COMPANIES

AND

THE SELLER PARTIES IDENTIFIED HEREIN

August 30, 2021

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			Page
RECITALS			1

AGREEMENT			2

ARTICLE 1 DEFINITIONS			2

ARTICLE 2 THE PURCHASE AND SALE			24
	2.1	The Purchase and Sale.	24
	2.2	Consideration.	24
	2.3	Working Capital Adjustment.	24
	2.4	Certain Restrictions Applicable to the Stock Consideration.	25
	2.5	Earnout Payments	27
	2.6	Withholding.	31

ARTICLE 3 CLOSING			31
	3.1	Time and Place of the Closing.	31
	3.2	Deliveries of the Seller Parties.	32
	3.3	Deliveries of Parent and Purchaser.	34
	3.4	Closing Schedules.	35

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES AND THE ACQUIRED COMPANIES			35
	4.1	Seller Party Capacity, Enforceability and Consents.	36
	4.2	Organization and Good Standing.	37
	4.3	Acquired Company and Non-Controlled Entity Capitalization.	37
	4.4	Authority, Approvals, Enforceability and Consents.	38
	4.5	Financial Statements.	39
	4.6	Absence of Undisclosed Liabilities.	40
	4.7	Absence of Certain Changes.	40
	4.8	Taxes.	42
	4.9	Legal Matters.	45
	4.10	Real Property.	48
	4.11	Condition and Sufficiency of Assets	49
	4.12	Intellectual Property.	49
	4.13	Data Privacy	53
	4.14	Asset Management Portfolio	54
	4.15	Company Agreements.	54
	4.16	Labor Relations.	56
	4.17	Employee Benefit Plans.	58
	4.18	Transactions with Insiders.	60
	4.19	Environmental Matters.	60
	4.20	Bank Accounts, Authorized Signatories.	62
	4.21	Brokers.	62
	4.22	Title to Assets.	62
	4.23	Insurance.	62
	4.24	Seller Parties’ Ownership of Transferred Equity; Title.	63

	4.25	Low Income Housing Tax Credits	63
	4.26	AFAH Finance’s Securitization Assumed Debt (“AFAH Debt”).	64
	4.27	PPP Loans	64
	4.28	Excluded Entities	65
	4.29	Seller Parties Legal Matters.	65
	4.30	Stock Consideration for Investment.	65
	4.31	No Additional Representations.	65

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER			66
	5.1	Organization.	66
	5.2	Authorization.	67
	5.3	Approvals; No Conflicts.	67
	5.4	Capitalization.	68
	5.5	Parent SEC Documents.	68
	5.6	Financial Statements; Internal Controls and Procedures.	69
	5.7	Conduct of Business.	69
	5.8	Financing; Stock Consideration.	69
	5.9	Litigation.	70
	5.10	Compliance with Laws.	70
	5.11	Contracts.	70
	5.12	Investment Purposes.	70
	5.13	Brokers’ or Finders’ Fees.	70
	5.14	Private Placement and Offerings.	70
	5.15	No Other Representation.	71
	5.16	No Reliance.	71

ARTICLE 6 OTHER AGREEMENTS AND COVENANTS			72
	6.1	Conduct of Business.	72
	6.2	Confidentiality	74
	6.3	Access; Books and Records.	74
	6.4	No Solicitation of Other Bids.	75
	6.5	Government Approvals and Consents.	76
	6.6	Notices of Certain Events.	77
	6.7	Tax Matters.	79
	6.8	Interim Financial Statements and Statement of Net Debt.	82
	6.9	Material Letters Regarding Financial Statements.	82
	6.10	Affiliate Transactions.	82
	6.11	Listing of Parent Common Stock.	82
	6.12	Employee Matters.	82
	6.13	Closing Conditions	83
	6.14	Public Announcements	83
	6.15	Cooperation with Financing.	83
	6.16	Mureau Road Lease Agreement	84
	6.17	“Key Man” Substitutions	85
	6.18	Further Assurances	85
	6.19	Director and Officer Liability and Indemnification	85
	6.20	Restrictive Covenants.	86
	6.21	Cash Sweep	87
	6.22	PPP Escrow Amount.	87

ARTICLE 7 CONDITIONS PRECEDENT TO THE CLOSING			89
	7.1	Mutual Conditions Precedent to Obligations of the Parties.	89
	7.2	Conditions Precedent to Obligations of Parent and Purchaser.	89
	7.3	Conditions Precedent to Obligations of the Seller Parties and the Acquired Companies.	91

ARTICLE 8 TERMINATION			92
	8.1	Termination.	92

ARTICLE 9 INDEMNIFICATION			94
	9.1	Indemnification of Purchaser.	94
	9.2	Indemnification of the Seller Parties.	96
	9.3	Fraud	98
	9.4	Indemnification Procedure.	98
	9.5	Materiality Qualifiers.	99
	9.6	Investigation.	99
	9.7	No Right of Contribution	100
	9.8	Payment.	100
	9.9	Adjustment to Consideration.	100
	9.10	Exclusive Remedy.	100

ARTICLE 10 MISCELLANEOUS			100
	10.1	Successors and Assigns; Assignment.	101
	10.2	Notices.	101
	10.3	Modification.	103
	10.4	Time is of the Essence.	103
	10.5	Exhibits and Schedules.	103
	10.6	Entire Agreement.	103
	10.7	Severability.	103
	10.8	Rules of Construction.	103
	10.9	Binding Effect.	104
	10.10	Choice of Law.	104
	10.11	Consent to Jurisdiction.	104
	10.12	WAIVER OF JURY TRIAL.	104
	10.13	Survival of Covenants.	104
	10.14	No Third Party Beneficiaries.	105
	10.15	Counterparts.	105
	10.16	Electronic Execution and Delivery.	105
	10.17	Specific Performance.	105
	10.18	Expenses.	106
	10.19	Adjustments.	106

SCHEDULES

Schedule A	Company Net Working Capital
Schedule B	Illustration of Cash Flow Adjustments to the 2020 and 2019 Audited Financial Statements
Schedule C	Third Party Consents
Schedule D	Permitted Mortgages and Guarantees

iii

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this “Agreement”), is dated as of August 30, 2021, by and among Walker & Dunlop, Inc., a Maryland corporation (“Parent”); WDAAC, LLC, Delaware limited liability company (“Purchaser”); the First Tier Acquired Companies (as defined herein and set forth on the signature pages hereto); Alliant, Inc., a Florida corporation (“Alliant Inc.”); Alliant ADC, Inc., a California corporation (“Alliant ADC”); Palm Drive Associates, LLC, a Delaware limited liability company (“Palm Drive”); and Shawn Horwitz, an individual (“Seller” and collectively with Alliant Inc., Alliant ADC and Palm Drive, “Seller Parties”). Each of the parties hereto is sometimes referred to herein individually as a “Party,” and collectively as the “Parties.”

RECITALS

A.Seller directly or indirectly owns all of the issued and outstanding equity securities of the Acquired Companies, one-hundred percent (100%) of ADC Parramore Member, LLC, a Florida limited liability company, one-hundred percent (100%) of ADC Communities, LLC, a Florida limited liability company (“ADC I”), and ninety-nine percent (99%) of ADC Communities II, LLC, a California limited liability company (“ADC II”) (collectively, the “Seller Transferred Equity”). Seller and Alliant Inc. own Palm Drive, which owns ninety-nine percent (99%) of The Alliant Company, LLC, a Florida limited liability company (“Alliant Company”), seventy percent (70%) of Alliant Strategic Investments II, LLC, a Delaware limited liability company (“Alliant Strategic”), ninety-nine and ninety-nine-hundredths of a percent (99.99%) of Alliant Strategic Investments, LLC (“ASI I”), a Florida limited liability company, ninety-nine and ninety-nine-hundredths of a percent (99.99%) of Alliant Fund Acquisitions, LLC, a Florida limited liability company (“Alliant Fund Acquisitions”), one-hundred percent (100%) of Vista Ridge 1, LLC, a California limited liability company (“Vista Ridge 1”), and one-hundred percent 100% of ASI Member, LLC, a California limited liability company (collectively, the “Palm Drive Transferred Equity”). Alliant Inc. owns one percent (1%) of Alliant Company, one percent (1%) of Alliant Capital, Ltd., a Florida limited liability company (“Alliant Capital”), one-hundredth of a percent (0.01%) of Alliant Credit Facility, Ltd., a Florida limited partnership, one percent (1%) of Alliant V, LLC, a Florida limited liability company, one-hundredth of a percent (0.01%) of ASI I, and one-hundredth of a percent (0.01%) of Alliant Fund Acquisitions (collectively, the “Alliant Inc. Transferred Equity”). Alliant ADC owns one percent (1%) of ADC II (the “Alliant ADC Transferred Equity” and, together with the Seller Transferred Equity, Palm Drive Transferred Equity and Alliant Inc. Transferred Equity, the “Transferred Equity”).

B.On the terms and subject to the conditions set forth in this Agreement, Purchaser desires to purchase from the Seller, and the Seller desires to sell to Purchaser, the Seller Transferred Equity; Purchaser desires to purchase from Palm Drive, and Palm Drive desires to sell to Purchaser, the Palm Drive Transferred Equity; Purchaser desires to purchase from Alliant Inc. and Alliant Inc. desires to sell to Purchaser, the Alliant Inc. Transferred Equity; and Purchaser desires to purchase from Alliant ADC and Alliant ADC desires to sell to Purchaser, the Alliant ADC Transferred Equity.

C.Concurrently with the execution of this Agreement, Purchaser has entered into employment agreements with each of the Persons listed on Section 1.1(a) of the Company

Disclosure Letter (collectively, the “Employment Agreements”) which agreements shall be effective as of the Effective Time.

D.The Parties desire to make certain representations, warranties, covenants and agreements in connection with the transactions contemplated by this Agreement and also to prescribe certain conditions to such transactions.

AGREEMENT

In consideration of the mutual covenants of the Parties as hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the meanings specified in this Article 1.

“Accounting Firm” means an accounting firm of national reputation mutually satisfactory to Purchaser and Seller. In the event that Purchaser and Seller cannot agree on such a mutually acceptable accounting firm, then Purchaser’s and the Seller’s respective regular outside accounting firms shall jointly select an Accounting Firm.

“Acquired Companies” means the First Tier Acquired Companies and their respective Subsidiaries, collectively, and “Acquired Company” means any of them. For the avoidance of doubt, “Acquired Companies” shall not include the Excluded Entities or the Non-Controlled Entities.

“Acquisition Proposal” means any inquiry, proposal or offer from any Person (other than Purchaser or any of its Affiliates) concerning (i) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction involving any Acquired Company; (ii) the issuance or acquisition of shares of capital stock or other equity securities of any Acquired Company; or (iii) the sale, lease, exchange or other disposition of any significant portion of any of the Acquired Company’s properties or assets.

“AFAH Debt” has the meaning set forth in Section 4.26.

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. As used in this definition, the term “control” means the possession, directly or indirectly, of any other power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise.

“Affiliate Assets” has the meaning set forth in Section 4.22.

“Affiliate Transaction” means any Contract between an Acquired Company, on the one hand, and (a) any present officer, director or member of an Acquired Company, or (b) to the Company’s Knowledge, any family member thereof or any trust for the benefit of any such Person, any family members thereof or any entity in which any officer, director, manager employee, member or stockholder of an Acquired Company or any family member thereof is an owner of more than 10% of the voting equity securities of such entity (other than a public company), on the other hand, other than intercompany loans between Acquired Companies.

“Affiliated Group” means a combined, consolidated, unitary or affiliated group as defined in Section 1504 of the Code or Treasury Regulation Section 1.1502-6 (or analogous provisions under U.S. state, local or non-U.S. Tax Law).

“Agency” means a government-sponsored secondary mortgage market enterprise or Governmental Authority acquiring, owning or guaranteeing mortgage loans, including for purposes of this Agreement, Fannie Mae, Freddie Mac, the Government National Mortgage Association, the United States Department of Agriculture (“USDA”), the Department of Housing and Urban Development of the United States of America (“HUD”) and the Federal Housing Administration of HUD.

“Agreement” has the meaning set forth in the preamble.

“Allocation Schedule” has the meaning set forth in Section 6.7(f).

“Annual Period” means each consecutive twelve (12) calendar month period in the Earnout Period, there being four (4) Annual Periods.

“ASI Fund” means Alliant Strategic Preservation Fund II, Ltd., Alliant Strategic Preservation Feeder Fund II, Ltd., Alliant Strategic Preservation Fund III, LP, ASI Multi-Family Impact Fund, LP and Alliant Strategic Opportunity Zone Fund I, LLC.

“Assumed Indebtedness” means (i) the remaining unpaid principal balance of the AFAH Debt as of Closing (such amount, the “AFAH Closing Debt”), (ii) the Warehouse Lines, and (iii) the Permitted Mortgages and Guarantees.

“Audited Financial Statements” has the meaning set forth in Section 4.5(a).

“Base Cash Consideration” has the meaning set forth in Section 2.2.

“Books and Records” means all books and records of the Acquired Companies, including all records, files, papers, sales and purchase correspondence, books of account and financial and employment records, whether in tangible or digital form solely to the extent related to the Business.

“Business” means (i) as to Alliant Company and Alliant Capital, the syndication of Credits by raising Upper Tier Funds and arranging for their investment into Lower Tier Partnerships; (ii) as to ADC I and ADC II, the development and construction of affordable housing that will qualify for Credits; and (iii) as to Alliant Strategic, the investment on behalf of third-party investors in Preservation Projects or Opportunity Zone Projects.

“Business Day” means a day other than Saturday, Sunday or a public holiday on which banks are authorized or required to be closed under the Laws of the State of Maryland, the State of New York, or the State of Florida.

“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act of 2020 (Pub. L. 116–136), as amended and in effect from time to time, together with any rules and regulations promulgated in connection therewith, any rulings or orders issued by any applicable Governmental Authority (including, without limitation, the Small Business Administration) thereunder, or the application or official interpretation of any of the foregoing.

“Cash and Cash Equivalents” means, as of any given time, all cash and cash equivalents determined in accordance with GAAP as of such time, which, for avoidance of doubt, shall include cash on hand, cash in banks, short-term highly liquid investments with original maturities of three months or less, deposits in transit, and issued but uncleared checks and drafts and shall include any restricted cash.

“Cash Consideration” has the meaning set forth in Section 2.2.

“Cash Flow Calculation Statement” has the meaning set forth in Section 2.5(d).

“Cash Flow Objection Notice” has the meaning set forth in Section 2.5(d)(i).

“Cash Flow Review Period” has the meaning set forth in Section 2.5(d)(i).

“Change of Control” means any event (including any merger, recapitalization or other sale or business combination, in one transaction or a series of related transactions) which results in, immediately after giving effect thereto, any Person (or group of Persons acting in concert) other than Parent or an Affiliate thereof immediately prior to such event directly owning: (a) a majority of the voting power of the equity of Purchaser or the Acquired Companies (taken as a whole) after such event, or (b) more than a majority of the assets of the Acquired Companies (taken as a whole).

“Claim” means any claim, action, arbitration, suit, litigation, demand or proceeding.

“Closing” has the meaning set forth in Section 3.1.

“Closing Adjustment” has the meaning set forth in Section 2.3(c).

“Closing Adjustment Resolution Period” has the meaning set forth in Section 2.3(e).

“Closing Cash Payment” has the meaning set forth in Section 3.3(a).

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Indebtedness” means the aggregate amount of Indebtedness of the Acquired Companies as of the Closing, excluding (i) the Assumed Indebtedness, (ii) any Indebtedness of Parent, Purchaser or their respective Subsidiaries, (iii) the Outstanding PPP Loan, and (iv) any Indebtedness that is included in the calculation of Closing Net Working Capital.

“Closing Net Working Capital” shall be calculated in accordance with Schedule A as of the Closing Date; provided, however, to the extent any Transaction Costs are not paid prior to the Closing or at Closing pursuant to Section 3.3(a), such unpaid Transaction Costs shall be treated as liabilities for purposes of calculating Closing Net Working Capital.

“Closing Net Working Capital Statement” has the meaning set forth in Section 2.3(c).

“Closing Share Value” means the quotient of (a) the sum of all Trade Values over (b) the aggregate number of shares of Parent Common Stock traded during the twenty-five (25) consecutive trading days immediately preceding the third trading day prior to the Closing Date.

“COBRA” has the meaning set forth in Section 4.17(b).

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Company Agreements” means all Contracts to which any Acquired Company is a party or by which any Acquired Company is bound.

“Company Closing Schedule” has the meaning set forth in Section 3.4.

“Company Data” means all data in any medium, including confidential information and Protected Information, in the possession, custody or control of an Acquired Company, or otherwise held or processed on an Acquired Company’s behalf.

“Company Disclosure Letter” means the Company Disclosure Letter attached hereto, dated as of the date hereof, delivered by the Acquired Companies and the Seller Parties to Purchaser in connection with this Agreement.

“Company Employee” means all employees of the Acquired Companies, in each case immediately prior to the Closing, including, without limitation, any such employees on approved leave of absence, sick leave, or short- or long-term disability leave.

“Company Intellectual Property” means (i) all Company Owned Intellectual Property; and (ii) Company Licensed Intellectual Property.

“Company IP Agreement” means any Contract concerning rights in Intellectual Property to which an Acquired Company is a party or by which the Intellectual Property of an Acquired Company is bound, including any (i) license, sale, assignment or conveyance of Intellectual Property by an Acquired Company or to an Acquired Company by any Person, including any authorizations, permissions to access or exploit any Intellectual Property, options, or covenants not to sue or similar non-assertion covenants, and (ii) Contract between an Acquired Company and any Person relating to the transfer, development, maintenance or use of Intellectual Property, or the development or transmission of any data related thereto.

“Company IT Systems” means any and all electronic data processing, information, recordkeeping, communications, telecommunications, operating, account management, inventory management, and all other computer or information technology systems, equipment and assets,

including related documentation, materials, media and specifications, that are owned, purported to be owned, contracted for, licensed, leased, used or held for use by an Acquired Company, including any and all such (i) computers, hardware, servers, peripherals, routers, hubs, switches, circuits, networks, data communications lines, telecommunications equipment and infrastructure and other technology-related plants and equipment, including databases, workstations, switches, and communication facilities; (ii) Software; and (iii) websites and web pages, social media sites and social media pages, applications (including mobile applications), and application programming interfaces (APIs), including all related content of the foregoing, including data, data files, programs, scripts, design, layout, text, graphics, images, animation and sound; and (iv) cloud services and infrastructure, such as software as a service (SaaS), platform as a service (PaaS) or infrastructure as a service (IaaS).

“Company Licensed Intellectual Property” means all Intellectual Property which is licensed or purported to be licensed (or otherwise used or purported to be used with authorization from the rightsholder) by an Acquired Company.

“Company Owned Intellectual Property” means all Intellectual Property which is owned or purported to be owned, in whole or in part, by any Acquired Company.

“Company Registered Intellectual Property” means all Company Owned Intellectual Property that is subject to any issuance, registration, pending application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction, including all patents, registered copyrights, registered mask works, registered domain names, registered social media accounts and registered trademarks and all applications for any of the foregoing.

“Company Services” means all services and other Intellectual Property offered, marketed, distributed, performed, or otherwise commercialized by or on behalf of any Acquired Company on or immediately prior to the Closing Date.

“Company Material Agreements” has the meaning set forth in Section 4.15(a).

“Competing Business” has the meaning set forth in Section 6.20(a)(i).

“Competitive Services” has the meaning set forth in Section 6.20(a)(i).

“Consent” means any waiver, authorization, consent or approval.

“Contracts” means any written contracts, commitments, purchase orders, mortgages, instruments, indentures, sales orders, licenses, leases and other agreements or arrangements, in each case which are legally binding, and to which any of the Acquired Companies or any of their respective assets are bound or subject.

“Covered Person” means (A) for each Rule 506 Issuer, (i) such Rule 506 Issuer, (ii) its general partner or managing member, (iii) its investment adviser, (iii) any director or executive officer of such Rule 506 Issuer or its general partner, managing member or investment adviser and (iv) any other officer of such Rule 506 Issuer or its general partner, managing member or investment adviser participating in the offering of limited partnership interests or membership

interests in such Rule 506 Issuer, and (B) for each Rule 506 Issuer with respect to which Alliant Equity was or is entitled to receive any remuneration for the sale of limited partnership interests or membership interests, (i) Alliant Equity, (ii) its managing member, (iii) any director or executive officer of Alliant Equity or its managing member, and (iv) any other officer of Alliant Equity or its managing member participating in the offering of securities by such Rule 506 Issuer.

“Covered Taxes” has the meaning set forth in Section 9.1(a)(iii).

“Credits” means LIHTCs, issued pursuant to section 42 of the Code, other state housing tax credits, whether certificated or allocated, that are issued by certain U.S. states, and historic tax credits, issued pursuant to section 47 of the Code and by certain U.S. states and energy credits issued under the Code or by any U.S. state.

“Debt Financing” has the meaning set forth in Section 6.15(a).

“Deductible” means $4,500,000.

“Deferral Restrictions” has the meaning set forth in Section 2.4.

“Deferred Stock Consideration” has the meaning set forth in Section 2.4(a).

“Dispute Resolution Procedure” means the procedure pursuant to which the items in dispute under Section 2.3(e) or Section 2.5(d) are referred by either Purchaser or Seller Parties for determination as promptly as practicable to the Accounting Firm. Purchaser and Seller Parties will jointly engage the Accounting Firm pursuant to a reasonable engagement letter with respect to the determination to be made by the Accounting Firm. All fees and expenses relating to the work, if any, to be performed by the Accounting Firm will be borne by Purchaser, on the one hand and Seller Parties, on the other hand, respectively, in the proportion that the aggregate dollar amount of the disputed items submitted to the Accounting Firm by such party that are unsuccessfully disputed by such party (as finally determined by the Accounting Firm) bears to the aggregate dollar amount of disputed items submitted by Purchaser and Seller Parties. By way of example and not by way of limitation, if Seller Parties seek a Seventy Thousand Dollar ($70,000) upward adjustment and the Accounting Firm determines that there should be a Forty Thousand Dollar ($40,000) upward adjustment, then Seller Parties will be responsible for three-sevenths (3/7ths) of the fees and expenses and Purchaser will be responsible for four-sevenths (4/7ths) of the fees and expenses. Except as provided in the preceding sentence, all other costs and expenses incurred by the parties in connection with resolving any dispute hereunder before the Accounting Firm will be borne by the party incurring such cost and expense. The Accounting Firm will determine only those issues still in dispute at the end of the Closing Adjustment Resolution Period or Earnout Resolution Period, as applicable, and the Accounting Firm’s determination will be based upon and consistent with the terms and conditions of this Agreement. The determination by the Accounting Firm will be based solely on presentations made, with respect to such disputed items, by Purchaser and Seller Parties to the Accounting Firm and not on the Accounting Firm’s independent review. Purchaser and Seller Parties will use their respective reasonable best efforts to make their respective presentations as promptly as practicable following submission to the Accounting Firm of the disputed items, and in any event within thirty (30) Business Days thereof and each such

party will be entitled, as part of its presentation, to respond to the presentation of the other party and any questions and requests of the Accounting Firm. In deciding any matter, the Accounting Firm (A) will be bound by the provisions herein and the definitions contained herein and (B) may not assign a value to any item greater than the greatest value for such item claimed by Purchaser or Seller Parties or less than the smallest value for such item claimed by Purchaser or Seller Parties. The Accounting Firm’s determination will be instructed by the parties to be made within forty-five (45) days after its engagement (which engagement will be made no later than five (5) Business Days after the end of the Closing Adjustment Resolution Period or Earnout Resolution Period, as applicable,), or as soon thereafter as possible, will be set forth in a written statement delivered to Seller Parties and Purchaser and will be final, conclusive, non-appealable and binding for all purposes hereunder; provided that such determination may be reviewed, corrected or set aside by a court of competent jurisdiction but only in the event of fraud in connection with such determination or upon a finding that the Accounting Firm committed manifest error with respect to its determination.

“Earnout Payment” has the meaning set forth in Section 2.5(b).

“Earnout Period” has the meaning set forth in Section 2.5.

“Earnout Resolution Period” has the meaning set forth in Section 2.5(d)(iii).

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System.

“Effective Time” has the meaning set forth in Section 3.1.

“Employee Benefit Plan” means (i) all employee benefit plans as defined in Section 3(3) of ERISA; (ii) all other pension, retirement, group insurance, severance pay, deferred compensation, excess or supplemental benefit, vacation, stock, stock option, equity-based compensation, phantom stock, fringe benefit and incentive plans, contracts, schemes, programs, funds, commitments, or arrangements of any kind; and (iii) all other plans, contracts, schemes, programs, funds, commitments, or arrangements providing money, services, property, or other benefits, whether written or oral, formal or informal, qualified or nonqualified, funded or unfunded, and including any that have been frozen or terminated, which pertain to any employee, former employee, director, officer, shareholder, member, manager, consultant, or independent contractor of an Acquired Company and (i) to which an Acquired Company is or has been a party or by which any of them is or has been bound or (ii) with respect to which an Acquired Company has made any payments or contributions since December 31, 2015 or (iii) to which an Acquired Company may otherwise have any liability (including any such plan or arrangement formerly maintained by an Acquired Company or any current or former ERISA Affiliate of an Acquired Company).

“Employment Agreements” has the meaning set forth in Recital C.

“Enforceability Exceptions” means, with respect to enforcement of the terms and provisions of this Agreement or any Transaction Document, (i) the effect of any applicable Law of general application relating to bankruptcy, reorganization, insolvency, moratorium or similar

Law affecting creditors’ rights or relief of debtors generally and (ii) the effect of general principles of equity, including general principles of equity governing specific performance, injunctive relief and other equitable remedies (regardless of whether enforceability is considered in a proceeding in equity or at law).

“Environmental Requirements” means any Law that is related to (i) pollution, contamination, cleanup, preservation, protection, reclamation or remediation of the environment, (ii) health or safety as contemplated by the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) (“OSHA”) or (iii) any Hazardous Material, including (A) the investigation, study, assessment, testing, monitoring, containment, removal, remediation, response, cleanup, abatement, prevention, control or regulation of any Release or threatened Release of any Hazardous Material or (B) the management of any Hazardous Material, including the manufacture, generation, formulation, processing, labeling, use, treatment, handling, storage, disposal, transportation, distribution, re-use, recycling or reclamation of any Hazardous Material; and includes but is not limited to the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6091 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Clean Water Act (33 U.S.C. § 7401 et seq.), OSHA, the Toxic Substance Control Act (15 U.S.C. § 2601 et seq.), and the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. § 6901 et seq.).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means the any corporation or other entity that is included in a controlled group of corporations within which the Acquired Companies are also included, as provided in Section 414(b) of the Code; or which is a trade or business under common control with the Acquired Companies, as provided in Section 414(c) of the Code; or which constitutes a member of an affiliated service group within which the Acquired Companies are also included, as provided in Section 414(m) of the Code.

“Estimated Adjustment” has the meaning set forth in Section 2.3(a).

“Estimated Working Capital” means the Seller’s good faith estimate of the Closing Net Working Capital as of the Closing Date.

“Estimated Working Capital Deficit” means the amount, if any, by which the Target Working Capital exceeds the Estimated Working Capital.

“Estimated Working Capital Surplus” means the amount, if any, by which the Estimated Working Capital exceeds the Target Working Capital.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Entities” means Alliant Equity Investments, LLC, a California limited liability company (“Alliant Equity”), Key Vista Investments Fund, LLC, a Florida limited liability

company, Alliant II, Inc., a Florida corporation, Alliant Tax Credit Fund IID, L.P., a Delaware limited partnership, Alliant Strategic Fund I GP, LLC, a Florida limited liability company, Alliant Strategic Preservation Fund I, Ltd., a Florida limited company, Alliant Management, LLC, a Florida limited liability company, Alliant Mortgage Company, Inc., a Florida corporation, 888 Tower Apartments, LLC, a Delaware limited liability company, 888 Tower SPE Equity Owner, LLC, a Delaware limited liability company, ASI 888 Tower Investor, LLC, a California limited liability company, ASI 888 Tower Manager, LLC, a Delaware limited liability company.

“First Tier Acquired Companies” means Alliant Company, Alliant Capital; Alliant Fund Asset Holdings, LLC, a Delaware limited liability company (“Alliant Fund Holdings”); Alliant Asset Management Company, LLC a California limited liability company (“Alliant Asset Management”); Alliant Strategic; ADC I, ADC II, AFAH Finance, LLC, a Delaware limited liability company (“AFAH Finance”); Alliant Fund Acquisitions, Vista Ridge 1, collectively, and a “First Tier Acquired Company” means any of them.

“Financial Statements” has the meaning set forth in Section 4.5(b).

“Fraud” means actual and intentional fraud (and not constructive fraud, equitable fraud, negligent misrepresentation or omission, or fraud premised on recklessness or negligence) committed by a Person in the making of the representations and warranties in this Agreement (as modified by the Schedules), with the intent of deceiving the other Person, and on which the other Person reasonably relies. For the avoidance of doubt, giving a representation or warranty without knowledge of whether the representation or warranty is true shall not, by itself, constitute Fraud.

“GAAP” means U.S. generally accepted accounting principles, consistently applied.

“Governmental Approvals” has the meaning set forth in Section 6.5(a).

“Governmental Authority” means any court, tribunal, arbitrator, authority, Agency, commission, official or other instrumentality of the United States, any foreign country, or any domestic or foreign state, province, county, city, other political subdivision, FINRA or any applicable SRO, or any other similar body or organization exercising similar powers or authority.

“Governing Body” means (i) with respect to a corporation, the board of directors of such corporation, (ii) with respect to a limited liability company, the manager(s), board of managers, or managing member(s) of such limited liability company, (iii) with respect to a limited partnership, the board, committee or other body of the general partner of such partnership that serves a similar function or the general partner itself (or if any such general partner is itself a limited partnership, the board, committee or other body of such general partner’s general partner that serves a similar function or such general partner’s partner) and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in the case of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such body has delegated any power or authority, including any officer and managing director.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

“Gross Fee Income” means with respect to the Parent and its Affiliates during any specified period following the Closing, the sum of (i) (a) origination fees, net of co-broker fees, correspondent fees, unreimbursed closing costs, discount points, lender fees (e.g., FNMA large loan fees), placement fees, referral fees and any other types of fees or consideration received for such period, (b) net premiums actually received for such period by Parent from closed loans that the Parent and its Affiliates originates directly or through a correspondent or broker; and (ii) 100% of the gross transaction fees from investment sales transactions that Parent or its Affiliates receive consideration in respect thereof.

“Hazardous Material” means (i) hazardous substances, as defined by the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.); (ii) hazardous wastes, as defined by the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.); (iii) petroleum, including crude oil or any fraction thereof which is liquid at standard conditions of temperature and pressure; (iv) radioactive material, including any source, special nuclear, or by-product material as defined in (42 U.S.C. §2011 et seq.); (v) asbestos that is friable or reasonably likely to become friable; (vi) polychlorinated biphenyls; and (vii) other material, substance or waste to which liability or standards of conduct may be imposed, or which requires or may require investigation, in each case under any applicable Environmental Requirements.

“Holdback Shortfall Amount” has the meaning set forth in Section 2.3(f).

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations under such Act.

“Income Tax” means any U.S. federal, state, local, or non-U.S. income Tax and any other Tax (i) imposed on, measured by or determined with reference to, net income, gross receipts, gains or profits, or (ii) imposed on, or with reference to, multiple bases including net income, gross receipts, gains or profits, including any interest, penalty, or addition thereto, whether disputed or not.

“Income Tax Return” means any Tax Return relating to Income Taxes.

“Indebtedness” means, with respect to any Person, without duplication, (i) the current and long-term portions (whether current or funded, secured or unsecured) of any amount owed by such Person in respect of (a) borrowed money, (b) capitalized lease obligations and (c) bankers’ acceptances or letters of credit, but solely to the extent amounts have been drawn thereunder, and any promissory note related thereto, (ii) all obligations of such Person for the deferred purchase price of any property or services, including payments under non-compete agreements and seller notes (other than trade accounts payable and accrued employee related expenses, in each case as should be reflected on the most recent balance sheet of such Person as current liabilities arising in the Ordinary Course), (iii) all obligations of such Person created or arising under any conditional sale or other title retention agreement, (iv) all obligations of such Person secured by a purchase money mortgage or other Lien, (v) any obligations secured by Liens on property acquired by such Person, whether or not such obligations were assumed by such Person at the time of acquisition of such property, (vi) all obligations of other Persons of a type referred to in clauses (i) through (v) above which are directly or indirectly guaranteed by such Person or which such Person has agreed

(contingently or otherwise) to purchase or otherwise acquire or in respect of which such Person has otherwise assured a credit against loss, (vii) interest, principal, prepayment penalty, premiums, fees or expenses, to the extent due or owing in respect of those items listed in clauses (i) through (vi) above, whether resulting from their payment or discharge or otherwise, and (viii) any refinancings of any of the foregoing obligations; provided, however, that Indebtedness of the Acquired Companies shall not include (w) the Outstanding PPP Loan, (x) the Assumed Indebtedness, (y) intercompany loans between Acquired Companies or (z) any amounts taken into account (but solely taken into account) in determining Transaction Costs.

“Indemnified Party” has the meaning set forth in Section 9.2(a).

“Indemnifying Party” has the meaning set forth in Section 9.4(a).

“Indemnity Escrow Agent” means the Person designated by mutual agreement of the Parties to serve as escrow agent under the Indemnity Escrow Agreement.

“Indemnity Escrow Agreement” means the Indemnity Escrow Agreement among the Parties and the Indemnity Escrow Agent, to be executed and delivered at the Closing in a form mutually agreeable among the parties thereto.

“Indemnity Escrow Amount” means $8,000,000 to be deposited with the Indemnity Escrow Agent and held in escrow for a period of twelve (12) months pursuant to the Indemnity Escrow Agreement.

“Indemnity Share Sale Proceeds” has the meaning set forth in Section 9.1(d).

“Indemnity Share Value” means the quotient of (a) the sum of all Trade Values over (b) the aggregate number of shares of Parent Common Stock traded during the twenty (20) consecutive trading days immediately preceding the third trading day prior to the date on which the Losses resulting from the applicable indemnifiable claim are finally determined to be due and payable pursuant to Article 9.

“Inside Date” has the meaning set forth in Section 3.1.

“Insider” means the Seller, any director, manager, officer or employee of Seller or of any Acquired Company, and any Affiliate or Relative of any of the foregoing Persons.

“Intellectual Property” means all intellectual property, confidential information and proprietary rights, whether registered or unregistered including all (i) patents (including all reissues, divisionals, provisionals, continuations and continuations-in-part, renewals, substitutions, extensions and reexaminations thereof) and patent applications (including all provisional applications), foreign counterparts thereof, inventions, discoveries and ideas (whether or not patentable and whether or not reduced to practice), indicia of invention ownership (including certificates of invention, petty patents and patent utility models) issued by any Governmental Authority and invention disclosure associated with any of the foregoing (collectively, “Patents”); (ii) trademarks, service marks, trade dress, assumed, fictional, business and trade names, logos, brand names, certification marks and other similar designations of source, association or origins,

in each case, whether or not registered, together with the goodwill of the business associated therewith and common law rights thereto (collectively, “Trademarks”); (iii) published and unpublished works of authorship and expressions, whether copyrightable or not, including all statutory and common law copyrights associated therewith; (iv) all registrations, applications, extensions and renewals for any of the items listed in clauses (ii) and (iii); (v) know-how, trade secrets, confidential or proprietary information and materials (including customer lists, business and technical information, data, databases, data compilations and collections, tools, process technology, plans and drawings) and all rights therein, whether or not patentable (collectively, “Trade Secrets”); (vi) internet websites, internet domain names, web addresses, URLs, web pages, social media accounts and keywords, any content and data thereon or relating thereto and registrations and applications for registration of any of the foregoing; (vii) all (a) software (including firmware and other software embedded in hardware devices), software code (including source code and executable or object code), programs, operating systems, subroutines, files, records, schematics, interfaces, APIs, data files, protocols, algorithms, models, methodologies and implementation thereof; (b) development tools, descriptions and flow charts; (c) data, meta data, databases and compilations of data, whether machine readable or otherwise; and (d) programmer’s annotations, notes, documentation, product user manuals, training materials and other specifications and work product therefor used to design, plan, organize, maintain, support or develop any of the foregoing, irrespective of the media on which it is recorded ((a) through (d) collectively, “Software”); and (e) other technology, formulae, procedures, processes, methods, techniques, systems, specifications, designs, models, devices, prototypes, schematics, manuals and development tools; and (viii) all proprietary rights relating to and tangible embodiments of any of the foregoing (i) to (viii), including all claims and causes of action, damages and remedies related thereto, whether accruing before, on or after the date hereof, including all rights to and claims for damages, restitution and injunctive and other legal and equitable relief for past, present and future infringement, dilution, misappropriation, violation, misuse, breach or default, with the right but no obligation to sue for such legal and equitable relief and to collect, or otherwise recover and retain, any such damages.

“Investment Advisers Act” means the Investment Advisers Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“Investment Company Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“IP Assignment Agreement” means a written agreement that includes (i) confidentiality obligations in favor of an Acquired Company, (ii) a present assignment to an Acquired Company of all right, title and interest in and to all Intellectual Property created or developed by such Person in the scope of such Person’s employment by or engagement with such Acquired Company (including the rights to transfer, license, amend and modify such Intellectual Property) and (iii) a waiver of any and all moral rights (to the extent possible under applicable Law) such Person may possess in such Intellectual Property.

“IRS” means the U.S. Internal Revenue Service.

“Knowledge of the Company” or “to the Company’s Knowledge” or any similar phrase, means the actual knowledge of any of the following individuals: Shawn Horwitz, Brian Goldberg, Kathleen Balderrama and Charles Allen.

“Law” means the common law of any jurisdiction, or any provision of any foreign, federal, state or local law, statute, rule, regulation, order, Permit, judgment, injunction, decree or other decision of any court or other tribunal or Governmental Authority legally binding on the relevant Person or its properties.

“Leased Real Property” has the meaning set forth in Section 4.10(b).

“Liabilities” means any indebtedness (including any Indebtedness), liabilities or obligations of any nature (whether accrued, absolute, contingent, direct, indirect, known, unknown, perfected, inchoate, unliquidated or otherwise, due or to become due).

“Liens” means any liens, charges, rights, restrictions, options, preemptive rights, mortgages, deeds of trust, hypothecations, assessments, pledges, encumbrances, claims of equitable interest or security interests of any kind or nature whatsoever, excluding restrictions on transfer under applicable securities Laws.

“LIHTC” means the federal low income housing tax credits for qualified multifamily rental housing projects under Section 42 of the Code.

“Litigation” means any suit, Claim, action, arbitration or proceeding.

“Losses” means any and all Liabilities, obligations, assessments, losses, costs, damages, deficiencies, judgments, Taxes, fines or expenses (whether or not arising out of third party claims), including interest, penalties, reasonable fees and expenses of attorneys, accountants and other consultants and experts but excluding any punitive, special or consequential damages, except to the extent such damages are payable to a third party, but net of any insurance proceeds or recoveries actually received by Purchaser from any third party with respect to such Losses.

“Lower Tier Partnership” means the limited liability company or limited partnership that owns a multifamily rental housing project that provides the Upper Tier Fund, investing in it as a non-managing member or limited partner, with Credits.

“Material Adverse Effect” means, with respect to any Person, any event, occurrence, fact, condition or change that (taking into account all other related events, occurrences, facts, conditions or changes) is, has been, or would reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, financial condition or assets of such Person and its Subsidiaries, or (b) the ability of such Person to consummate the transactions contemplated hereby on a timely basis; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition, or change, directly or indirectly, arising out of or attributable to: (i) any changes, conditions or effects in the United States or foreign economies or securities, financial or credit markets in general, including interest rates or the price of commodities or raw materials; (ii) any changes, conditions or effects that generally affect the industries in which such Person and its Subsidiaries operates; (iii) conditions caused by acts of

terrorism or war (whether or not declared) or any natural or man-made disaster or acts of God; (iv) any failure by such Person or its Subsidiaries to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending on or after the date of this Agreement (it being understood that the underlying causes of any such failures or changes may be taken into account in determining whether there has been a Material Adverse Effect); (v) pandemics, epidemics, or outbreaks (including, without limitation, the COVID-19 pandemic and any Governmental Orders enacted in connection therewith or in response thereto, any actions required to be taken pursuant to such Governmental Orders, any conditions arising as a result thereof and any other actions taken by such Person and its Subsidiaries in response to the COVID-19 pandemic that are of a nature and scale consistent with the types of actions taken by other participants in the industries in which the Business operates in response to the COVID-19 pandemic); and (vi) compliance with the terms of, or the taking of (or omitting to take) any action required by, this Agreement; provided, that any change, event, development, or effect in clauses (i), (ii), (iii) or (v) above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on such Person and its Subsidiaries compared to other participants in the industry in which the such Person and its Subsidiaries operates.

“Measurement Period” has the meaning set forth in Section 2.5(a).

“Monthly Financial Statements” has the meaning set forth in Section 6.8.

“Mureau Road Lease Agreement” has the meaning set forth in Section 6.16.

“Non-Controlled Entities” means (i) the Lower Tier Partnerships and (ii) the entities set forth on Section 1.1(b) of the Company Disclosure Letter.

“NYSE” means the New York Stock Exchange.

“Open Source Software” means any software, database, libraries, or other code that is licensed under or is otherwise subject to terms and conditions governing the licensing or distribution of “open source software”, “free software” or “copyleft” software, or other software under a Contract that requires as a condition of its use, modification or distribution that it, or other software into which such software is incorporated, integrated or with which such software is combined or distributed, or that is derived from or linked to such software, be disclosed or distributed in source code form, or be licensed, distributed or conveyed under the same terms as such Contract (including software licensed under the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, Microsoft Shared Source License, Common Public License, Artistic License, Netscape Public License, Sun Community Source License (SCSL), Sun Industry Standards License (SISL), Apache License and any license listed at www.opensource.org).

“Opportunity Zone Projects” means multifamily housing projects that qualify for investment in real estate within qualified “opportunity zones” created pursuant to the 2017 Tax Cuts and Jobs Act.

“Ordinary Course” means, with respect to an action taken by a Person: (a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person; and (b) such action is not required to be authorized by the Governing Body or equity holders of such Person (or by any Person or group of Persons exercising similar authority) and is not required to be specifically authorized by the parent company (if any) of such Person.

“Organizational Documents” means (i) in the case of any Person organized as a corporation, the certificate or articles of incorporation of such corporation (or, if applicable, the memorandum and articles of association of such corporation) and the bylaws of such corporation; (ii) in the case of any Person organized as a limited liability company, the certificate or articles of formation or organization and the limited liability company agreement, operating agreement or regulations of such limited liability company; (iii) in the case of any Person organized as a limited partnership, the certificate or articles of limited partnership and partnership agreement of such limited partnership; (iv) in the case of any other Person, all constitutive or organizational documents of such Person which address matters relating to the business and affairs of such Person similar to the matters addressed by the documents referred to in clauses (i) through (iii) above in the case of Persons organized as corporations, limited liability companies or limited partnerships and (v) any amendment to any of the foregoing.

“Outside Date” means three months after the date hereof (the “initial outside date”), which may be extended to six months after the date hereof, by either Purchaser or Seller in the event that the only conditions not satisfied as of the initial outside date are (i) the failure to receive one or more of the Consents set forth on Schedule C and (ii) those conditions with respect to actions the Parties will take at the Closing; provided, however, no Party shall have the right to so extend the Outside Date if such Party is then in material breach of this Agreement.

“Outbound License” has the meaning set forth in Section 4.12(d).

“Outstanding PPP Loan” has the meaning set forth in Section 4.27(a).

“Palm Drive Transferred Equity” has the meaning set forth in the recitals.

“Parent” has the meaning set forth in the preamble.

“Parent Common Stock” means common stock, par value $0.01 per share, of Parent.

“Parent Board” means the Board of Directors of Parent.

“Parent Contract” has the meaning set forth in Section 5.11(a).

“Parent Disclosure Letter” means the Parent Disclosure Letter attached hereto, dated as of the date hereof, delivered by Parent to the Seller Parties in connection with this Agreement.

“Parent Employee Benefit Plan” has the meaning set forth in Section 6.12(b).

“Parent Options” means options, warrants or other rights exercisable or exchangeable for Parent Common Stock.

“Parent Preferred Stock” means preferred stock, par value $0.01 per share, of Parent.

“Parent Restricted Stock” means shares of restricted Parent Common Stock issued to certain directors, officers and employees of Parent and its Subsidiaries in accordance with the Walker & Dunlop, Inc. 2010 Equity Incentive Plan, as amended.

“Parent SEC Report Date” has the meaning set forth in the introductory paragraph of Article 5.

“Parent SEC Reports” has the meaning set forth in the introductory paragraph of Article 5.

“Parent’s Knowledge” or any similar phrase, means the actual knowledge of any of the following individuals: William Walker, Stephen Theobald, Richard Lucas and, solely for purposes for Section 9.6, Greg Florkowski.

“Partnership Companies” has the meaning set forth in Section 6.7(c)(iii).

“Party” has the meaning set forth in the preamble.

“Pending Indemnification Claim” has the meaning set forth in Section 9.1(d).

“Pension Plan” has the meaning set forth in Section 4.17(b).

“Permit” or “Permits” means all permits, licenses, certifications, approvals, consents, notices, waivers, qualifications, filings, exemptions and authorizations by or of, or registrations with, any Governmental Authority (including HUD, or Fannie Mae, Freddie Mac or Ginnie Mae, the SEC, and the USDA), FINRA or any other applicable SRO, and including vehicle and business licenses.

“Permitted Liens” means any (a) inchoate mechanics’, carriers’, workers’, materialmen’s; repairmen’s, landlords’ and other similar Liens arising in the Ordinary Course and that in the aggregate are not material and do not interfere with the present use of the assets to which they apply; (b) inchoate Liens for Taxes, assessments or other charges by Governmental Authorities, in each case that are not yet due and payable or that are being contested in the ordinary course of business and, in each case, for which adequate reserves are being maintained in accordance with GAAP; (c) statutory Liens arising by operation of Law with respect to a Liability incurred in the Ordinary Course which is not delinquent, and for which appropriate reserves have been established in accordance with GAAP (to the extent GAAP requires the establishment of such reserves); (d) with respect to property other than real property, such other Liens, encumbrances or imperfections that are not material in amount or do not materially detract from the value of or materially impair the existing use of the property affected by such Lien, encumbrance or imperfection; (e) Liens on any Acquired Company or an Acquired Company’s assets related to the Assumed Indebtedness, in each case as set forth on Section 1.1(e) of the Company Disclosure Letter; (f) Liens securing an Upper Tier Fund’s contingent obligations to make capital

contributions to a Lower Tier Partnership, and (g) with respect to any parcel of real property, (i) Liens, easements, rights-of-way, encroachments, restrictions, conditions, matters of record, survey exceptions and other similar encumbrances which, individually or in the aggregate, (x) are not material in character, amount or extent in relation to the applicable real property and (y) do not and would not reasonably be expected to materially impair the use (or contemplated use), utility or value of the applicable real property or otherwise materially impair the present or contemplated business operations at such location by an Acquired Company, Purchaser or any of their respective Subsidiaries, as applicable, and (ii) zoning, entitlement, building and other land use regulations imposed by Governmental Authorities having jurisdiction over such real property.

“Permitted Mortgages and Guarantees” means (a) the mortgages or guarantees listed on Schedule D and (b) such other mortgages and guarantees entered into with the prior written consent of the Purchaser during the Pre-Closing Period by an Acquired Company in support of the Acquired Companies’ joint venture partnerships with affordable housing developers.

“Person” means any individual, sole proprietorship, general partnership, limited partnership, limited liability company, joint venture, trust, unincorporated association, corporation, Governmental Authority or other entity.

“PPP Denied Amount” has the meaning set forth in Section 6.22(a)(i).

“PPP Escrow Account” means the account established pursuant to the PPP Escrow Agreement.

“PPP Escrow Agreement” means that certain escrow agreement by and between Alliant Asset Management and the PPP Lender for the purpose of holding the PPP Escrow Amount.

“PPP Escrow Amount” means an amount equal to the amount outstanding and unforgiven under the Outstanding PPP Loan as of the Closing Date.

“PPP Forgivable Uses” means uses of proceeds of a PPP Loan that are eligible for forgiveness under Section 1106 of the CARES Act (including, without limitation, PPP Payroll Costs) and otherwise in compliance with all other provisions or requirements of the CARES Act applicable in order for the PPP Loan to be eligible for forgiveness.

“PPP Forgiven Amount” has the meaning set forth in Section 6.22(a)(ii).

“PPP Lender” means the bank set forth on Section 4.27 of the Company Disclosure Letter.

“PPP Loan” means a small business loan under the federal Paycheck Protection Program as provided in Section 7(a) of the Small Business Act of 1953, as amended by the CARES Act.

“PPP Payroll Costs” shall mean “payroll costs” as defined in 15 U.S.C. 636(a)(36)(A)(viii) (as added to the Small Business Act by Section 1102 of the CARES Act).

“PPP Permitted Uses” means uses of proceeds of a PPP Loan that are permitted by 15 U.S.C. 636(a)(36)(F)(i) (as added to the Small Business Act by Section 1102 of the CARES Act).

“Pre-Closing Tax Period” has the meaning set forth in Section 9.1(a)(iii).

“Pre-Closing Period” has the meaning set forth in Section 6.1(a).

“Preservation Projects” means multifamily affordable housing projects that are subject to a land use restriction or other third-party restriction on rents charged that are not currently generating Credits.

“Prior Month End” has the meaning set forth in Section 6.8.

“Privacy and Security Requirements” means (a) all applicable Laws concerning (i) the receipt, confidentiality, privacy, integrity, data protection, processing, transfer, storage, sharing, use, disposal, safeguarding or security of Protected Information, (ii) actions to be taken in the event of a breach in security of Protected Information, (iii) website and mobile application privacy policies and practices, (iv) telephone call or electronic monitoring or recording, (v) text messaging, telemarketing and e-mail marketing; (b) all provisions in Contracts to which an Acquired Company is a party or is otherwise bound that relate to Protected Information or protecting the security or privacy of information or Company IT Systems; and (c) an Acquired Company’s internal and publicly posted policies, procedures, statements and notices relating to Protected Information and/or the privacy and security of Company Services, Company IT Systems and Company Data.

“Protected Information” means any information, in any form, that (a) is personally identifying (i.e., data that identifies an individual or, in combination with any other information or data available to an Acquired Company, is capable of identifying an individual); or (b) is considered personal data or otherwise governed, regulated or protected by one or more Privacy and Security Requirements.

“Proprietary Rights Agreement” has the meaning set forth in Section 4.16(d).

“Purchaser” has the meaning set forth in the preamble.

“Purchaser Earnout Revenue” means for each Annual Period the sum of: (a) fifty percent (50%) of the first ten million dollars ($10,000,000) of cumulative Gross Fee Income for such Annual Period generated by Parent and its Affiliates’ investment sales and debt financing teams on debt transactions, equity placements, and investment sales transactions sourced as a direct result of the Business; (b) one hundred percent (100%) of the cumulative Gross Fee Income for such Annual Period in excess of ten million dollars ($10,000,000) generated by Parent and its Affiliates’ investment sales and debt financing teams on debt transactions, equity placements, and investment sales transactions sourced primarily as a result of the Business; and (c) twenty percent (20%) of the cumulative Gross Fee Income for such Annual Period generated by Parent and Affiliates’ investment sales and debt financing teams on debt transactions, equity placements, and investment sales transactions referred to Parent and Affiliates’ investment sales and debt financing teams by Seller Employees, and such customers referred being new customers not already actively doing business with Parent and Affiliates’ investment sales and debt financing teams.

“Purchaser Fundamental Representations” has the meaning set forth in Section 9.2(b).

“Purchaser Indemnified Parties” has the meaning set forth in Section 9.1.

“Purchaser Termination Fee” has the meaning set forth in Section 8.1(b)(i).

“Quarterly Financial Statements” has the meaning set forth in Section 6.8.

“Real Property Leases” has the meaning set forth in Section 4.10(b).

“Relative” of a Person means such Person’s spouse, such Person’s parents, sisters, brothers, children and the spouses of the foregoing, and any member of the immediate household of such Person.

“Release” shall mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping into the indoor or outdoor environment.

“Remedial Action” means all action required under applicable Laws: (x) to cleanup, remove, treat or in any other way remediate any chemical, Hazardous Material or waste containing any chemical or Hazardous Material in the environment; (y) to prevent the release of any chemical, Hazardous Material or waste containing any chemical or Hazardous Material so that they do not endanger or otherwise adversely affect the environment or public health or welfare; or (z) to perform pre-remedial studies, investigations or monitoring, in or under any real property, assets or facilities.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Rule 506 Issuer” means each Rule 506(b) Issuer and each Rule 506(c) Issuer.

“Rule 506(b) Issuer” means Alliant Strategic Preservation Fund II, Ltd. and Alliant Strategic Preservation Feeder Fund II, Ltd.

“Rule 506(c) Issuer” means ASI Multi-Family Impact Fund, LP and Alliant Strategic Opportunity Zone Fund I, LLC.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Security Incident” means (a) any unauthorized access, acquisition, alteration or modification, loss, theft, corruption or other unauthorized processing of Protected Information or other Company Data, or (b) any breach of the security of or other unauthorized access to or use of or other compromise to the integrity or availability of the Company IT Systems.

“Seller Parties” has the meaning set forth in the preamble.

“Seller Consideration” means the Cash Consideration and the Stock Consideration.

“Seller Fundamental Representations” has the meaning set forth in Section 9.1(b).

“Seller Indemnified Parties” has the meaning set forth in Section 9.2.

“Seller Transferred Equity” has the meaning set forth in the recitals.

“SRO” means (i) any “self regulatory organization,” as defined in Section 3(a)(26) of the Exchange Act (including, without limitation, the Financial Industry Regulatory Authority, Inc. (“FINRA”)), and (ii) any other United States or foreign securities exchange, futures exchange, commodities exchange or contract market.

“Stock Consideration” means the number of shares of Parent Common Stock equal to $90,000,000 divided by the Closing Share Value; provided, that (a) if the Closing Share Value is greater than $111.29 (the “Collar Ceiling”), then the Stock Consideration shall mean the number of shares of Parent Common Stock equal to $90,000,000 divided by the Collar Ceiling, and (b) if the Closing Share Value is less than $91.06 (the “Collar Floor”), then the Stock Consideration shall mean the number of shares of Parent Common Stock equal to $90,000,000 divided by the Collar Floor.

“Straddle Period” means any taxable period that includes (but does not end on) the Closing Date.

“Straddle Period Tax Returns” has the meaning set forth in Section 6.7(b).

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote generally in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons receives a majority of limited liability company, partnership, association, or other business entity cash gains or losses or shall be or control any managing director, manager, managing member or general partner of such limited liability company, partnership, association, or other business entity. For the avoidance of doubt, each Upper Tier Fund and the general partner or managing member of such fund is a Subsidiary and is included within the definition of “Acquired Companies”. Notwithstanding anything to the contrary, the Parties agree that the Non-Controlled Entities are excluded from the definition of “Subsidiary”.

“Tail Policies” has the meaning set forth in Section 3.2(l).

“Target Working Capital” means $1,000,000, provided that, in all cases each Acquired Company shall retain sufficient Cash and Cash Equivalents on hand to comply with all regulations applicable to such Acquired Company.

“Tax” means (a) any and all U.S. federal, state, local or non-U.S. or other taxes imposed by any Governmental Authority, including taxes, fees or assessments with respect to income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, parking, unclaimed property/escheatment, natural resources, severance, stamp, occupation, occupancy, ad valorem, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other charge in the nature of tax, whether disputed or not, imposed by any Governmental Authority, (b) any liability for the payment of amounts of the type described in clause (a) hereof as a result of being at any time a transferee of, or a successor in interest to, any Person, as a result of being a member of any Affiliated Group, as a result of any Tax Sharing agreement or obligation to indemnify any Person against such amounts, or as otherwise provided by operation of applicable Law; and (c) any interest, penalties or additions to tax or additional amounts (whether disputed or not) in respect of any of the foregoing.

“Tax Audit” means any audit, assessment, or other examination relating to Taxes by any Tax Authority or any judicial or administrative proceedings relating to Taxes.

“Tax Authority” means the IRS and any other U.S. domestic or non-U.S. Governmental Authority responsible for the administration of any Taxes.

“Tax Return” means any return, declaration, report, claim for refund, information return, statement or other written information or document (including elections and estimated taxes) relating to Taxes, the determination, assessment or collection of any Taxes or otherwise filed or required to be filed with any Tax Authority, and including any supplement, schedule, statement or attachment thereto, and any amendment to any of the foregoing.

“Tax Sharing Agreements” has the meaning set forth in Section 4.8(e).

“Third-Party Claim” has the meaning set forth in Section 9.4(b).

“Total Closing Consideration” has the meaning set forth in Section 2.2.

“Trade Value” means for each trade of Parent Common Stock during the twenty-five (25) consecutive trading days immediately preceding the third trading day prior to the Closing Date, the product of the number of shares of Parent Common Stock sold in such trade multiplied by the price per share of Parent Common Stock paid in such trade.

“Transaction Costs” means (i) any accounting, legal, investment banking or other advisor fees or costs of the Acquired Companies or the Seller Parties in connection with the transactions contemplated by this Agreement and (ii) all transaction related bonuses, change-in-control

payments, severance payments, termination payments, retention payments or similar payments or benefits that become payable or due to any current or former director, officer, employee, independent contractor, consultant or other service providers of any Acquired Company or any of their Affiliates as a result of the consummation of the transactions contemplated by this Agreement, and the aggregate amount of the employer share of any payroll, social security, unemployment, excise or similar Taxes related thereto, but, in each case, solely to extent not paid by the Acquired Companies or the Seller Parties prior to the Closing Date.

“Transactions” means the various transactions contemplated under this Agreement and/or the Transaction Documents.

“Transaction Documents” means the agreements, documents, certificates and instruments to be delivered pursuant to or in connection with this Agreement, including the Indemnity Escrow Agreement.

“Transferred Equity” has the meaning set forth in the recitals.

“Transfer Taxes” has the meaning set forth in Section 6.7(d).

“Treasury Regulations” means the regulations promulgated under the Code by the U.S. Department of the Treasury.

“Unaudited Financial Statements” has the meaning set forth in Section 4.5(b).

“Upper Tier Fund” means any limited liability company or limited partnership in which Alliant Capital, directly or indirectly, owns one hundred percent (100%) of the managing member or general partner interest and whose purpose is to invest in the Lower Tier Partnerships, including but not limited to the entities set forth on Section 1.1(c) of the Company Disclosure Letter.

“Warehouse Lines” means, (i) with respect to Purchaser, Indebtedness used in the Ordinary Course to fund lending activities and (ii) with respect to any Acquired Company, Indebtedness set forth on Section 1.1(d) of the Company Disclosure Letter.

“WARN” means the Worker Adjustment and Retraining Notification Act, as amended, and any similar state or local Law.

“Working Capital Holdback Amount” means $500,000.

ARTICLE 2

THE PURCHASE AND SALE

2.1The Purchase and Sale. On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser shall purchase, acquire and accept from the Seller Parties, and the Seller Parties shall sell, transfer, assign and deliver to Purchaser, the Transferred Equity, in each case free and clear of all Liens (other than Liens created by Purchaser or Permitted Liens).

2.2Consideration. On the terms and subject to the conditions set forth in this Agreement, the consideration to the Seller Parties for the sale, transfer, assignment and delivery to Purchaser of the Transferred Equity shall be equal to $596,000,000.00 (the “Total Closing Consideration”), which consists of (i) cash consideration (“Base Cash Consideration”), as adjusted pursuant to Section 2.3 (such adjusted amount, the “Cash Consideration”), (ii) the dollar value of the Stock Consideration, and (iii) the dollar value of the AFAH Closing Debt.

2.3Working Capital Adjustment.

(a)The Base Cash Consideration shall be reduced by the amount of the Estimated Working Capital Deficit, if any, or increased by the amount of the Estimated Working Capital Surplus, if any, as set forth in the Company Closing Schedule. Such adjustments shall be referred to herein collectively as the “Estimated Adjustment.”

(b)At least two (2) Business Days prior to the anticipated Closing Date, the Seller Parties shall prepare and deliver to the Purchaser a flow of funds memorandum which shall set forth all payments required to be made by or on behalf of all Parties at the Closing, including for each such payment an identification of the payor, the payee, the amount and the wire transfer information.

(c)Within ninety (90) days following the Closing Date, the Purchaser shall prepare and deliver to the Seller Parties a statement setting forth a consolidated balance sheet of the Acquired Companies as of the Closing Date (without giving effect to the transactions contemplated herein) and the Purchaser’s calculation of Closing Net Working Capital prepared in accordance with the historical practices of the Acquired Companies using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of its audited consolidated financial statements (the “Closing Net Working Capital Statement”), and a schedule based upon the Closing Net Working Capital Statement setting forth any adjustments to the Estimated Adjustment based on variances between the Estimated Working Capital and the Closing Net Working Capital (collectively, the “Closing Adjustment”). The Seller Parties shall reasonably assist Purchaser in the preparation of the Closing Net Working Capital Statement if reasonably requested by the Purchaser and the Seller Parties shall promptly respond to any reasonable requests for information from Purchaser regarding the preparation of the Closing Net Working Capital Statement.

(d)Seller Parties shall have a period of forty-five (45) days after receipt of the Closing Net Working Capital Statement and Closing Adjustment to notify the Purchaser of its election to accept or reject the Closing Net Working Capital Statement and/or the Closing

Adjustment. In the case of a rejection, such notice must contain the reasons for such rejection in reasonable detail and must set forth the amount of the requested adjustment. In the event no notice is received by the Purchaser during such forty-five (45)-day period, the Closing Net Working Capital Statement and the Closing Adjustment shall be deemed accepted by Seller Parties and final and binding on the Parties hereto for purposes of this Section 2.3. In the event that Seller Parties timely reject the Closing Net Working Capital Statement and/or the Closing Adjustment, Purchaser and the Seller Parties shall promptly (and in any event within thirty (30) days following the date upon which the Seller Parties reject the Closing Net Working Capital Statement and/or Closing Adjustment), attempt to make a joint determination of the Closing Adjustment and such determination and any required adjustments resulting therefrom shall be final and binding on the Parties hereto for purposes of this Section 2.3.

(e)In the event that the Purchaser and Seller Parties are unable to agree upon a joint determination of the Closing Adjustment within the thirty (30) day period for making a joint determination as provided in the last sentence of Section 2.3(d) (the “Closing Adjustment Resolution Period”), then Purchaser or Seller Parties may require the other Party to resolve any amounts remaining in dispute by way of the Dispute Resolution Procedure by providing notice to the other Party of such demand.

(f)If the Closing Adjustment as finally determined in accordance with the provisions of this Section 2.3 is in Purchaser’s favor, then within three (3) Business Days after such final determination, (i) Purchaser shall retain from the Working Capital Holdback Amount an amount in cash equal to the Closing Adjustment (or, if the Closing Adjustment exceeds the Working Capital Holdback Amount, an amount equal to all of the Working Capital Holdback Amount), (ii) disburse to the Seller Parties the Working Capital Holdback Amount, if any, that remains following the retention of the Closing Adjustment by Purchaser, and (iii) to the extent the Closing Adjustment exceeds the Working Capital Holdback Amount (the amount of such excess being referred to herein as the “Holdback Shortfall Amount”), the Seller Parties shall pay an amount in cash equal to the Holdback Shortfall Amount to an account designated in writing by Purchaser. If the Closing Adjustment as finally determined in accordance with the provisions of this Section 2.3 is in Seller Parties’ favor, then within three (3) Business Days after such final determination, Purchaser shall pay to the Seller Parties an amount in cash equal to the Working Capital Holdback Amount plus the Closing Adjustment; provided, however, that any Closing Adjustment payment required to be made by the Seller Parties to Purchaser may, at the option of Purchaser exercised in its sole discretion in accordance with the terms of the Indemnity Escrow Agreement, first be paid by the Indemnity Escrow Agent from the Indemnity Escrow Amount in accordance with the terms of the Indemnity Escrow Agreement prior to being satisfied out of any other funds of the Seller Parties. If the Closing Adjustment is zero (0), there shall be no adjustment pursuant to this Section 2.3, and in such event, Purchaser shall disburse the entire amount of the Working Capital Holdback Amount to the Seller Parties. If applicable, payment instructions shall be provided in writing by the Seller Parties to Purchaser, and none of Purchaser nor its Affiliates shall have any liability to the Seller Parties or their Affiliates with respect to any payment made in accordance with such payment instructions.

2.4Certain Restrictions Applicable to the Stock Consideration.

(a)Deferred Stock Consideration. The Stock Consideration shall be issued in book-entry form to, and owned beneficially and of record by, Seller as of the Closing, subject to the restrictions set forth in this Section 2.4. From and after the Closing, Seller shall not sell, assign, offer to sell, contract or agree to sell, pledge or otherwise dispose of (“Transfer”) the Stock Consideration (and Purchaser shall cause such Stock Consideration to be treated as subject to a stop-transfer order) as set forth herein until and to the extent that the Stock Consideration is no longer the subject to Deferral Restrictions (as defined below) pursuant to this Section 2.4 (the entirety or portion of Stock Consideration subject to the Deferral Restrictions shall be referred to herein as “Deferred Stock Consideration”). For the avoidance of doubt, Seller shall at all times be entitled to vote the shares of Parent Common Stock constituting the Deferred Stock Consideration and to receive any and all distributions, dividends or other payments made in respect of such shares.

(b)Notwithstanding the provisions set forth in this Section 2.4, Transfers of the Stock Consideration are permitted: (i) by gift to a member of Seller’ immediate family, to a trust, the beneficiary of which is a member of Seller’s immediate family or an Affiliate of such Person; (ii) by virtue of laws of descent and distribution upon death; (iii) pursuant to a qualified domestic relations order; and (iv) in the event of Parent’s liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of Parent’s stockholders having the right to exchange their shares of Parent Common Stock for cash, securities, or other property; provided, however, that in the case of clause (i) through (iii), such permitted transferees must enter into a written agreement agreeing to be bound by the restrictions in this Section 2.4.

(c)Deferral Restrictions. Parent shall cause to be terminated any stop-transfer order applicable to the Deferred Stock Consideration (the “Deferral Restrictions”) on each of the first, second, third and fourth anniversaries of the Closing Date, subject to the following terms and conditions:

(i)On the later of the first anniversary of the Closing Date or January 1, 2023, the Deferral Restrictions shall lapse with respect to that number of shares of Parent Common Stock (in book-entry form) equal to one-fourth (1/4) of such Deferred Stock Consideration.

(ii)On the later of the second anniversary of the Closing Date or January 1, 2024, the Deferral Restrictions shall lapse with respect to that number of shares of Parent Common Stock (in book-entry form) equal to one-half (1/2) of such Deferred Stock Consideration.

(iii)On the later of the third anniversary of the Closing Date or January 1, 2025, the Deferral Restrictions shall lapse with respect to that number of shares of Parent Common Stock (in book-entry form) equal to three-fourths (3/4) of such Deferred Stock Consideration.

(iv)On the later of the fourth anniversary of the Closing Date or January 1, 2026, and subject to Section 2.4(e) below, the Deferral Restrictions shall lapse with respect to any remaining Deferred Stock Consideration.

(d)

Legends. For so long as and to the extent any Deferred Stock Consideration remains subject to Deferral Restrictions as provided above, Seller understands that the book-entry notation representing such shares of Deferred Stock Consideration may contain one or more of the following legends:

(i)

“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(ii)

“THESE SHARES ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN A PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE RECORD HOLDER THAT RESTRICT THE RIGHT TO TRANSFER, SELL OR OTHERWISE DISPOSE OF THESE SHARES. A COPY OF SUCH PURCHASE AGREEMENT IS AVAILABLE FOR REVIEW BY THE RECORD HOLDER OF THESE SHARES AT THE PRINCIPAL OFFICES OF THE ISSUER.”

(iii)

Any legend required by the securities laws of any state to the extent such laws are applicable to such shares of Stock Consideration.

(e)From and after the date of release of any shares of Stock Consideration from the Deferral Restrictions set forth herein, Parent shall cause the legend identified in clause (ii) above to be removed from the book-entry notation representing such shares, whereupon such shares shall become freely tradeable by Seller, subject only to restrictions under applicable securities Laws. Parent shall cause the legends identified in clauses (i) and (iii) above to be removed from the book-entry notation representing any shares of Stock Consideration if such restrictions are no longer required by the Securities Act or any applicable state securities laws, including if such shares are covered by an effective registration statement under the Securities Act.

2.5Earnout Payments. As part of the Consideration for the Transferred Equity, the Seller Parties shall also be entitled to receive up to $100,000,000 in the aggregate in contingent payments based on the achievement of certain Cash Flow milestones during the four-year period commencing on the Closing Date (the “Earnout Period”) as set forth in this Section 2.5.

(a)Calculation of Cash Flow. Beginning on the Closing Date and for each completed six (6)-month period thereafter, Purchaser will prepare a calculation of Cash Flow within forty-five (45) days of the end of each completed six (6)-month period (each a

“Measurement Period”), for a total of eight (8) Measurement Periods during the Earnout Period; provided, that the first Measurement Period shall begin on the Closing Date and end on June 30, 2022. For purposes of this Section 2.5, “Cash Flow” will be measured as the following: (i) consolidated GAAP net income of the Acquired Companies following the Closing Date for each Measurement Period; plus (ii) (A) any net reduction in “Syndication Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies resulting from the net receipt of previously deferred syndication fee revenues; (B) any net reduction in “Asset Management Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies; (C) any net reduction in “Sales Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies; (D) consolidated federal, state and local income tax expense of the Acquired Companies; (E) the difference between the incentive compensation actually paid to any employee of any Acquired Company and any such incentive compensation accrued related to any employee of any Acquired Company (including on the Alliant Strategic business); (F) Purchaser Earnout Revenue; (G) any “Depreciation and Amortization” shown on the Acquired Companies’ statement of operations (to the extent not captured in the preceding items); (H) any net reduction in “Investment in Tax Credit Funds” shown on the consolidated balance sheet of the Acquired Companies; (I) any “Impairment Loss” shown on the statement of operations of the Acquired Companies; (J) any non-cash “Accretion Expense” recognized as a consequence of advances to and shown on the statement of operations of the Acquired Companies; and (K) any net reduction of any other types or categories of fees or income not separately listed in the Audited Financial Statements as of December 31, 2020; minus (iii) (A) any net increase in “Syndication Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies resulting from the net deferral of otherwise earned syndication fee revenue; (B) any net increase of “Asset Management Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies resulting from the net deferral of otherwise earned asset management fees payable by the Upper Tier Funds; (C) any net increase in “Sales Fees Receivable” shown on the consolidated balance sheet of the Acquired Companies; (D) consolidated federal, state and local income tax benefits of the Acquired Companies; (E) any non-cash “Accretion Income” recognized as a consequence of advances to Upper Tier Funds and shown on the statement of operations of the Acquired Companies; (F) any commercially reasonable information technology costs directly attributable to the correction of deficiencies or implementation of any upgrades reasonably necessary to improve the operation of the Business that are not directly recorded to the Business’ accounting books and records; and (G) any net increase of any other types or categories of fees or income not separately listed in the Audited Financial Statements as of December 31, 2020. Capitalized terms used in this Section 2.5(a) but not defined in this Agreement are references to line items on the Audited Financial Statements as of December 31, 2020; provided, however, the Parties acknowledge that Parent will account for the activities of the Acquired Companies in accordance with GAAP, and Parent’s accounting methodology may differ from the historical Audited Financial Statements of the Acquired Companies; provided, further, the adjustments to Parent’s GAAP Net Income to determine Cash Flow during the Earnout Period shall be applied in a manner that would generate results consistent with the adjustments to the Acquired Companies’ Audited Financial Statements for 2020 and 2019, as illustrated in Schedule B. No partnership or similar arrangement between the Purchaser and Seller Parties is intended or implied by the Cash Flow measurement or milestones used to calculate any Earnout Payments.

(b)Earnout Payments. For each Measurement Period, the Purchaser shall pay the Seller Parties a payment (each, an “Earnout Payment”) equal to fifty percent (50%) of the Cash Flow generated during such Measurement Period, provided that if the fifty percent (50%) of Cash Flow generated during such Measurement Period retained by the Purchaser is not sufficient to pay the principal on the AFAH Debt due for such Measurement Period (regardless of when such principal payment is actually made), then for such Measurement Period the Earnout Payment due to the Seller Parties will be reduced (but not less than zero) for that Measurement Period by an amount sufficient to allow Purchaser to pay such principal payment (with such reduced amount to be accrued and paid in any subsequent Measurement Period with sufficient Cash Flow).

(c)Timing of Earnout Payments. Each Earnout Payment, if earned, shall be due and payable on the date that is five (5) Business Days following the determination of the applicable final and binding Cash Flow Calculation Statement in accordance with Section 2.5(d). Payment instructions shall be provided in writing by the Seller Parties to Purchaser, and none of Purchaser nor its Affiliates shall have any liability to the Seller Parties or their Affiliates with respect to any payment made in accordance with such payment instructions.

(d)Review of Cash Flow Calculations. Within sixty (60) calendar days after the end of an Measurement Period, Purchaser will prepare and deliver to Seller Parties a written statement (in each case, a “Cash Flow Calculation Statement”) setting forth in reasonable detail, its determination and calculation of the (A) Cash Flow during such Measurement Period and (2) the applicable Earnout Payment with respect to such Measurement Period, together with copies of supporting documentation relating to such determinations and calculations.

(i)Seller Parties shall have thirty (30) days after receipt of each Cash Flow Calculation Statement (the “Cash Flow Review Period”) to review and object to such Cash Flow Calculation Statement. Prior to the expiration of the Cash Flow Review Period, Seller Parties may object to the applicable Cash Flow Calculation Statement by delivering a written notice of objection (the “Cash Flow Objection Notice”) to Purchaser. Any Cash Flow Calculation Objection Notice shall specify the items in the Cash Flow Calculation Statement in dispute and shall describe in reasonable detail the basis for such objection. If Seller Parties do not deliver a Cash Flow Calculation Objection Notice prior to the expiration of the applicable Cash Flow Review Period, then the applicable Cash Flow Calculation Statement shall be final and binding on Purchaser and Seller Parties. If Seller Parties timely deliver a Cash Flow Calculation Objection Notice, then Purchaser and Seller Parties shall attempt in good faith to resolve the disputed items and agree upon the resulting amount of the applicable Earnout Payment, for the applicable Cash Flow Calculation Period, and a joint resolution resulting from such discussions and any required adjustments resulting therefrom shall be final, conclusive and binding on the Purchaser and Seller Parties.

(ii)In connection with Seller Parties’ right to review the Cash Flow Calculation Statement in accordance with Section 2.5(d)(i), from the commencement of a Cash Flow Review Period until the date the applicable Cash Flow Calculation Statement corresponding to such Cash Flow Review Period has become final and binding in accordance with the terms hereof, upon reasonable advance written notice and without

unreasonable disruption to the business, Purchaser shall, and shall cause the Business and its respective officers, employees, agents, independent accountants and advisors to, use commercially reasonable efforts to furnish to Seller Parties and their Representatives, at reasonable times and places, (i) such access to the assets, books and records of the Business as Seller Parties may from time to time reasonably request and (ii) such access to financial and operating data and other information regarding the Business and related to the calculation of Cash Flow or the Earnout Payment for the applicable Cash Flow Calculation Period, as Seller Parties may from time to time reasonably request. During Purchaser’s review of any Cash Flow Calculation Objection Notice, Purchaser and its Representatives shall be provided reasonable access during normal business hours to any records and work papers of Seller Parties and their Representatives used in preparing such Cash Flow Calculation Objection Notice, to the extent access is reasonably required for Purchaser and its Representatives to assess the accuracy and acceptability of the calculations set forth therein.

(iii)If Seller Parties and Purchaser fail to reach an agreement with respect to the Cash Flow Calculation Statement within fifteen (15) days after such Cash Flow Calculation Objection Notice has been delivered (the “Earnout Resolution Period”), then Purchaser or Seller Parties may require the other party to resolve any amounts remaining in dispute by way of the Dispute Resolution Procedure by providing notice to the other party of such demand.

(e)Operation of Business during Measurement Periods. Following the Closing, Purchaser and its Affiliates shall have full discretion to cause the Business to operate in whatever manner and by whatever decisions Purchaser and its Affiliates determine; provided, that during the Measurement Periods, Purchaser shall (i) operate the Business in good faith and in a commercially reasonable manner and (ii) not (and shall cause its Affiliates not to) take any action that is intended to reduce or avoid the Earnout Payments. In no event shall any adjustments to the calculation of Cash Flow or Earnout Payments be made on the basis that the Business could have or should have been operated in any other manner or by any other decisions.

(f)Adjustment for Tax Purposes. Any payments made pursuant to this Section 2.5 shall be treated as additional Consideration by the parties for Tax purposes, unless otherwise required by Law.

(g)Earnout Setoff. Purchaser shall be entitled to set-off any amounts payable to the Seller Parties under this Section 2.5 against any amounts payable to the Purchaser pursuant to Section 6.22(c)(iii) or a Purchaser Indemnified Party pursuant to Article 9, as described in and subject to the limitations set forth therein.

(h)Earnout Acceleration or Adjustment. Notwithstanding anything in this Section 2.5 to the contrary, in the event that (i) (A) there is a Change of Control prior to the end of the Earnout Period, (B) the employment of Seller and two of the other six Persons listed on Section 1.1(a) of the Company Disclosure Letter are terminated by the Purchaser other than for “Cause” (as such term is defined in the applicable Employment Agreement) prior to the second anniversary of the Closing Date, or (C) the employment of three of the six Persons listed on Section 1.1(a) of

the Company Disclosure Letter other than Seller are terminated by the Purchaser other than for “Cause” (as such term is defined in the applicable Employment Agreement) prior to the end of the Earnout Period and without Seller’s prior consent, then any remaining Earnout Payments shall be deemed fully earned and become immediately due and payable and the Purchaser shall pay, or cause to be paid, to the Seller Parties the maximum remaining Earnout Payments consistent with the terms and conditions of this Section 2.5; or (ii) Purchaser discontinues or abandons a material but less than a majority portion of the Business, then the calculation of Purchaser Earnout Revenue for any remaining Measurement Period shall be adjusted to take into account the historical Cash Flows for such impacted operations of the Business.

2.6Withholding. Notwithstanding anything to the contrary in this Agreement, Parent, Purchaser and each of their Affiliates shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to the making of such payment under any provision of U.S. federal, state, local or non-U.S. Tax Law. In the event that the Parent, Purchaser, or any of their Affiliates determines that such withholding is required, it shall, except in the case of any compensatory payments, use reasonable efforts to notify the Seller Parties of such determination prior to making such withholding, and shall reasonably cooperate with any reasonable efforts the Seller Parties may make to provide any applicable forms, certifications or other information to reduce or eliminate any such deduction or withholding. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. To the extent applicable, the withholding party shall remit such withheld amounts to the appropriate Governmental Authority.

ARTICLE 3

CLOSING

3.1Time and Place of the Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place at the offices of Arnold & Porter Kaye Scholer LLP, 601 Massachusetts Ave., NW, Washington, District of Columbia, as soon as practicable following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the Parties will take at the Closing) and in any event within three (3) Business Days thereafter, or on such other date as Purchaser and the Seller Parties may mutually determine; provided that unless otherwise agreed in writing by Purchaser and the Seller Parties, the Closing shall in no event be earlier than sixty (60) days after the date of this Agreement (the “Inside Date), and if the Closing would otherwise be required to occur prior to the Inside Date pursuant to this Section 3.1 without giving effect to this proviso, the Closing shall instead occur within three (3) Business Days following the first day on or after the Inside Date on which the last of the conditions set forth in Article 7 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing) have been satisfied (or, to the extent permitted, waived by the Party entitled to the benefits thereof) or at such other date, time and place as Purchaser and the Seller Parties may agree in writing. The Closing shall be deemed to have occurred and become effective at 11:59 p.m. (Eastern time) (the “Effective Time”) on the date of

the Closing (the “Closing Date”). The Parties may participate in the Closing remotely by the use of telephone, email and facsimile transmission.

3.2Deliveries of the Seller Parties. At or prior to the Closing, the Seller Parties shall deliver or cause to be delivered to Parent and Purchaser:

(a)Assignment of Transferred Equity. An assignment of the Transferred Equity to Purchaser in form and substance reasonably satisfactory to Purchaser.

(b)Corporate Documents. Certificate of formation or certificate of incorporation (or comparable entity charter documents) of each First Tier Acquired Company as in effect at the Closing, certified by the Secretary of State of such First Tier Acquired Company’s state of formation as of a date not more than ten (10) calendar days prior to the Closing Date, and the limited liability company agreement or bylaws (or comparable entity governance documents) of such First Tier Acquired Company as in effect at the Closing, all of which shall be certified by the Secretary (or Person performing a similar function) thereof.

(c)Certificates of Good Standing. Certificates of Good Standing, dated not more than ten (10) calendar days prior to the Closing Date, with respect to each First Tier Acquired Company, Alliant Inc., Alliant ADC and Palm Drive, issued by the Secretary of State of such Person’s state of formation and by the Secretary of State of each jurisdiction in which such Person is qualified to do business as a foreign entity.

(d)Resolutions. A copy of the resolutions of the respective Governing Bodies of the First Tier Acquired Companies, Alliant Inc., Alliant ADC and Palm Drive, each as certified by the Secretary (or Person performing a similar function) thereof as having been duly and validly adopted and in full force and effect, authorizing the execution and delivery of this Agreement and the Transaction Documents to which each such First Tier Acquired Company or Alliant Inc., Alliant ADC or Palm Drive, as applicable, is a party and the performance of the transactions contemplated hereby and thereby.

(e)Bring Down Certificate. A certificate, dated as of the Closing Date, duly executed on behalf of the First Tier Acquired Companies and Seller Parties, certifying the fulfillment of the conditions set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c).

(f)Tax Certificate. A duly completed and properly executed IRS Form W-9 from each Seller Party as well as for any other party receiving or entitled to receive any payment under this Agreement.

(g)Payoff Letters and Lien Releases. Payoff letters for each instrument of Indebtedness of the Acquired Companies (other than the Assumed Indebtedness or Indebtedness of the Acquired Companies with respect to which such Acquired Company shall have been fully released from its obligations thereunder and all Liabilities with respect thereto from and after the Closing Date) from the obligees thereunder setting forth the amounts necessary to pay off all Indebtedness under such instrument as of the Closing Date along with the per diem interest amount with respect thereto and otherwise in form and substance reasonably satisfactory to the Purchaser,

and providing for the release of all Liens held against the property of the applicable Acquired Company upon the payoff of such Indebtedness.

(h)Resignations. Except as otherwise specified in writing by Purchaser no fewer than five (5) Business Days prior to the Closing Date, either (i) resignations of all of the members of the Governing Body of each First Tier Acquired Company and the officers of such First Tier Acquired Company, (ii) a certificate executed by an officer of each First Tier Acquired Company that all members of the Governing Body of such First Tier Acquired Company and the officers of such First Tier Acquired Company have been removed from their respective positions or (iii) a combination of (i) or (ii), in each case, effective as of the Closing.

(i)Substitutions. For each Acquired Company, Subsidiary of an Acquired Company and Non-Controlled Entity, evidence reasonably satisfactory to the Purchaser that any Seller Party or Excluded Entity that serves as a general partner, manager, managing member or in a similar capacity has been replaced by an Acquired Company or other party acceptable to the Purchaser.

(j)Company Records. All company minute books, stock ledgers and stock records of each Acquired Company.

(k)Company Closing Schedule. The Company Closing Schedule.

(l)Tail Policies. Evidence that the Seller Parties have purchased tail insurance coverage with coverage for six (6) years following Closing for the Insurance Policies listed on Section 3.2(l)(i) of the Company Disclosure Letter and for the longest period commercially available following Closing for the Insurance Policies listed on Section 3.2(l)(ii) of the Company Disclosure Letter, in each case naming Purchaser as loss payee on such coverages (the “Tail Policies”); provided that the premiums and expenses for the Tail Policies shall be borne by the Purchaser.

(m)Insurance Policies. With respect to Insurance Policies, the Seller Parties shall replace each Seller Party as a named insured, beneficiary or loss payee (to the extent a Seller Party is so named) with the Purchaser (or an Affiliate thereof) effective from and after Closing as reasonably requested by the Purchaser.

(n)Employment Agreements. Each of the Employment Agreements, duly executed by the parties thereto, each of which shall be in full force and effect as of the Effective Time.

(o)Mureau Road. Evidence reasonably satisfactory to Purchaser that Alliant Company’s ownership of Mureau Road, LLC has been distributed out of Alliant Company, and the Mureau Road Lease Agreement, duly executed by Mureau Road, LLC.

(p)PPP Escrow Agreement. If and to the extent the Outstanding PPP Loan is not forgiven prior to Closing, a PPP Escrow Agreement, duly executed by Alliant Asset Management and the PPP Lender, effective as of the Closing Date, in form and substance reasonably acceptable to Purchaser.

(q)Auditor Consent. Consent from the Acquired Companies’ auditor(s), whereby such auditor permits Parent to include such auditor’s audit report on the financial statements of the Acquired Companies in filings made by Parent with the SEC, to the extent required by applicable Law.

(r)Transaction Documents. Execute and deliver to Purchaser the Transaction Documents to which the Seller Parties are party.

3.3Deliveries of Parent and Purchaser. At or prior to the Closing, Parent or Purchaser, as applicable, shall:

(a)Cash Payment. Pay to the Seller Parties the Total Closing Consideration, less the dollar value of the Stock Consideration, less the dollar value of the AFAH Closing Debt, less Closing Indebtedness, if any, less Transaction Costs, if any, less the Working Capital Holdback Amount, less the Indemnity Escrow Amount, and less the PPP Escrow Amount (such adjusted payment, as adjusted pursuant to Section 2.3(a), the “Closing Cash Payment”). Purchaser shall (i) pay or cause to be paid on behalf of the Acquired Companies and/or the Seller Parties the Closing Indebtedness, if any, in the amounts and to the payees set forth in the payoff letters delivered pursuant to Section 3.2(g), (ii) pay or cause to be paid on behalf of the Acquired Companies and/or the Seller Parties the Transaction Costs, if any, (iii) deliver the Indemnity Escrow Amount by wire transfer of immediately available funds to the account designated by the Indemnity Escrow Agent for holding and distribution in accordance with the terms of the Indemnity Escrow Agreement in order to satisfy (A) in accordance with the proviso at the end of the second sentence of Section 2.3(f), any adjustments to the Cash Consideration in favor of Purchaser pursuant to Section 2.3, and (B) any and all claims made by Purchaser or any other Purchaser Indemnified Party against Seller Parties and pursuant to Article 9, and (iv) deliver or cause to be delivered by wire transfer of immediately available funds, for further deposit into the PPP Escrow Account pursuant to the PPP Escrow Agreement, the PPP Escrow Amount (unless the Outstanding PPP Loan is fully forgiven prior to Closing).

(b)Issuance of Stock Consideration. Duly issue and deliver to the Seller an original certificate representing the Stock Consideration.

(c)Corporate Documents. Deliver to the Seller Parties copies of (i) the Articles of Incorporation of Parent, certified by the Secretary of State of the State of Maryland, and the Certificate of Formation of the Purchaser, certified by the Secretary of State of the State of Delaware, in each case as in effect at the Closing and so certified as of not more than ten (10) calendar days prior to the Closing Date, and (ii) the by-laws of Parent and the limited liability company agreement of the Purchaser, in each case as in effect at the Closing and certified by the Secretary thereof.

(d)Certificates of Good Standing. Certificate of Good Standing, dated not more than ten (10) calendar days prior to the Closing Date, with respect to Parent and the Purchaser, issued by the Secretary of State of the states of Maryland and Delaware, respectively.

(e)Resolutions. A copy of the resolutions of the Parent Board, certified by the Secretary (or Person performing similar functions) thereof as having been duly and validly adopted and in full force and effect, authorizing the execution and delivery of this Agreement and the Transaction Documents to which Parent is a party and the performance of the transactions contemplated hereby and thereby.

(f)Bring Down Certificate. Deliver to the Seller a certificate, dated as of the Closing Date, duly executed by an officer of each of Parent and the Purchaser, certifying the fulfillment of the conditions set forth in Section 7.3(a), Section 7.3(b) and Section 7.3(c).

(g)Mureau Road. The Mureau Road Lease Agreement, duly executed by the Purchaser or its Affiliate.

(h)Transaction Documents. Execute and deliver to Seller the Transaction Documents to which Parent or Purchaser is (or both are) a party.

3.4Closing Schedules. Three (3) Business Days prior to the Closing Date, the Seller shall deliver to Purchaser a closing schedule (the “Company Closing Schedule”), which shall be certified by the Seller as having been prepared in accordance with the historical practices of the Acquired Companies using the same accounting methods, practices, principles, policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies that were used in the preparation of the Acquired Companies’ audited consolidated financial statements, setting forth in reasonable detail: (i) the estimated consolidated balance sheet of the Acquired Companies and the Estimated Working Capital, as well as the Estimated Working Capital Surplus or Estimated Working Capital Deficit, as applicable (without giving effect to the transactions contemplated herein), (ii) the Acquired Companies’ good faith estimate of the Closing Indebtedness and (iii) the Acquired Companies’ good faith estimate of the Transaction Costs.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES AND THE ACQUIRED COMPANIES

Except as expressly set forth in the Company Disclosure Letter; provided that, (x) any facts, items or exceptions disclosed in any section of the Company Disclosure Letter shall be deemed to be disclosed on another section of the Company Disclosure Letter if the applicability of such fact, item or exception to such other section would be reasonably apparent and (y) any listing of any fact, item or exception in any section of the Company Disclosure Letter shall not be construed as an admission of liability under any applicable Law or for any other purpose and shall not be construed as an admission that such fact, item or exception is in fact material or create a measure of materiality for purposes of this Agreement or otherwise, the Acquired Companies and the Seller Parties hereby jointly and severally represent and warrant as follows (it being understood and agreed that the Acquired Companies shall only be liable for the misrepresentation or breach of any representations and warranties in this Article 4 if the Closing is not consummated) (it being understood and agreed that all representations and warranties being made in this Article 4 with respect to “Non-Controlled Entities” are being made to the Knowledge of the Company):

4.1Seller Party Capacity, Enforceability and Consents.

(a)Each Seller Party that is an entity is an entity duly organized, validly existing and in good standing under the laws of its State of organization. The execution, delivery and performance by each Seller Party that is an entity of this Agreement and the other Transaction Documents to be executed and delivered by such Seller Party and the consummation by such Seller Party of the transactions contemplated hereby and thereby have been duly authorized and approved by the Governing Body of such Seller Party and no other entity proceedings on the part of such Seller Party are necessary to authorize and approve this Agreement and the other Transaction Documents to be executed and delivered by such Seller Party and the transactions contemplated hereby and thereby.

(b)Each Seller Party has the absolute and unrestricted entity right, power and authority to enter into this Agreement and the other Transaction Documents to be executed and delivered by such Seller Party and to perform its obligations hereunder and thereunder.

(c)This Agreement has been, and the other Transaction Documents to be executed and delivered by the Seller Parties at the Closing will, at the Closing, have been, duly executed and delivered by the Seller Parties and, assuming the due execution and delivery thereof by Purchaser, constitute (or will constitute at the Closing, as applicable) the legal, valid and binding obligations of the Seller Parties, enforceable against the Seller Parties in accordance with their respective terms, except as enforceability may be limited by the Enforceability Exceptions.

(d)Except as disclosed on Schedule C, the execution, delivery and performance of this Agreement and the other Transaction Documents to be executed by the Seller Parties and the consummation by the Seller Parties of the transactions contemplated hereby and thereby does not and will not:

(i)contravene any provisions of the Organizational Documents of any Seller Party that is an entity;

(ii)after notice or lapse of time or both, violate, conflict with, result in a breach of any provision of, constitute a default under, result in or permit the modification, revocation, cancellation, termination or acceleration of, any Contract to which any Seller Party is a party to or by which any Seller Party’s properties or assets are bound or otherwise subject, or require any consent or waiver of any party to any such Contract that will not have been obtained prior to the Closing;

(iii)violate or conflict with any Law applicable to any Seller Party or any Seller Party’s Affiliates, businesses or properties;

(iv)result in the creation or imposition of any Lien on any of the Transferred Equity; or

(v)require any authorization, consent, license, order, permit or approval of, or notice to, or filing, registration or qualification with, any Governmental Authority, except

in connection, or in compliance, with the notification and waiting period requirements of the HSR Act;

except, in each case of (ii), (iii), (iv) or (v), as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of the Seller Parties to perform their obligations hereunder or under any Transaction Document.

4.2Organization and Good Standing. Except as set forth on Section 4.2 of the Company Disclosure Letter, each of the Acquired Companies and the Non-Controlled Entities, is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite entity power and authority to own, lease and operate the properties used in its business and to carry on its business as it has been and is currently conducted except, solely with respect to a Non-Controlled Entity, as would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Acquired Companies, taken as a whole. Each of the Acquired Companies and the Non-Controlled Entities is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where qualification as such is required, except for such failures to be qualified and in good standing that, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on such Person (or, solely with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole). Prior to the date of this Agreement, the Seller Parties made available to Purchaser complete and correct copies of the Organizational Documents of each Acquired Company, each as presently in effect.

4.3Acquired Company and Non-Controlled Entity Capitalization.

(a)Section 4.3(a) of the Company Disclosure Letter sets forth the ownership of the Acquired Companies (except for any inaccuracy that does not implicate any ownership by a party outside the Acquired Companies), including the number and type of issued and outstanding equity interests of each Acquired Company and the holders thereof, which equity interests constitute the Transferred Equity hereunder. All of the Transferred Equity have been duly and validly authorized and issued, are fully paid and nonassessable and have not been issued in violation of any preemptive right or of any federal or state securities Law. As of the Closing, the Transferred Equity shall constitute all the issued and outstanding equity interests of the Acquired Companies and, upon consummation of the transactions contemplated by this Agreement, Purchaser shall own, directly and indirectly, all of the Transferred Equity, free and clear of all Liens (other than Liens created by Purchaser or Permitted Liens).

(b)Except in connection with the Assumed Indebtedness, there is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, redemption, sale, pledge or other disposition of any Transferred Equity or any securities convertible into, or other rights to acquire, any Transferred Equity, (ii) obligates any Acquired Company to grant, offer or enter into any of the foregoing or (iii) relates to the voting or control of such Transferred Equity, securities or rights (other than such Acquired Company’s or Non-Controlled Entity’s Organizational Documents). Except as set forth on Section 4.3(b) of the Company Disclosure Letter, no Acquired Company or Non-Controlled Entity has created any “phantom stock,” interest

appreciation rights or other similar rights, the value of which is related to or based upon the price or value of any class or series of Transferred Equity, except, solely with respect a Non-Controlled Entity, for any such rights that, individually or in the aggregate, do not have and would not be reasonably likely to have a Material Adverse Effect on the Acquired Companies, taken as a whole. No Acquired Company or Non-Controlled Entity has outstanding debt or debt instruments providing for voting rights, except, solely with respect a Non-Controlled Entity, for any such debt or debt instruments that, individually or in the aggregate, do not have and would not be reasonably likely to have a Material Adverse Effect on the Acquired Companies, taken as a whole. No Person is entitled to any preemptive or similar rights to subscribe for limited liability Transferred Equity. No Acquired Company has granted to any Person the right to demand or request that such Acquired Company effect a registration under the Securities Act of any securities held by such Person or to include any securities of such Person in any such registration by such Acquired Company.

(c)Section 4.3(c) of the Company Disclosure Letter sets forth all equity interests in any Person and joint venture interests owned directly by any Acquired Company. With the exception of the equity interests of Alliant Company (which is owned 99% by Palm Drive and 1% by Alliant Inc. and will be owned 99% owned by Palm Drive and 1% owned by Alliant Inc. immediately prior to the Closing), Alliant Strategic (which is 70% owned by Palm Drive and 30% owned by a third party as of the date hereof and will be 70% owned by Palm Drive and 30% owned by a third party as of immediately prior to the Closing), ADC I (only to the extent that 1% is owned by Alliant ADC as of the date hereof and that such 1% will be owned solely by Alliant ADC as of immediately prior to the Closing) and ADC II (which is 99% owned by the Seller and 1% is owned by Alliant ADC as of the date hereof and such 99% will be owned by the Seller and 1% will be owned by Alliant ADC as of immediately prior to the Closing), all of the issued and outstanding equity securities of each Acquired Company are owned of record and beneficially by one or more of the Acquired Companies, free and clear of all Liens (other than Liens created by Purchaser or Permitted Liens). All of the issued and outstanding equity securities owned by an Acquired Company in a Non-Controlled Entity are owned of record and beneficially by such Acquired Companies, free and clear of all Liens (other than Liens created by Purchaser or Permitted Liens).

4.4Authority, Approvals, Enforceability and Consents.

(a)Each First Tier Acquired Company has the entity power and authority to enter into this Agreement and the other Transaction Documents to be executed and delivered by them and to perform their respective obligations hereunder and thereunder.

(b)The execution, delivery and performance by each First Tier Acquired Company of this Agreement and the other Transaction Documents to be executed and delivered by them and the consummation by such First Tier Acquired Company of the transactions contemplated hereby and thereby have been duly authorized and approved by the Governing Body of such Person and no other entity proceedings on the part of such Person are necessary to authorize and approve this Agreement and the other Transaction Documents to be executed and delivered by it and the transactions contemplated hereby and thereby.

(c)This Agreement has been, and the other Transaction Documents to be executed and delivered by the First Tier Acquired Companies at the Closing will, at the Closing,

have been, duly executed and delivered by the First Tier Acquired Companies and constitutes (or will constitute at the Closing, as applicable) the legal, valid and binding obligations of the First Tier Acquired Companies enforceable against the First Tier Acquired Companies in accordance with their respective terms, subject to the Enforceability Exceptions.

(d)Except as disclosed on Schedule C, the execution, delivery and performance by the First Tier Acquired Companies and the Seller Parties of this Agreement and the other Transaction Documents to be executed and delivered by the First Tier Acquired Companies and the Seller Parties and the consummation of the transactions contemplated hereby and thereby do not and will not:

(i)contravene any provision of any Organizational Documents of the Acquired Companies;

(ii)after notice or lapse of time or both, violate, conflict with, result in a breach of any provision of, constitute a default under, result in or permit the modification, revocation, cancellation, termination or acceleration of, any Company Material Agreement to which any Acquired Company is a party or by which any of their respective properties or assets are bound or otherwise subject or require any consent or waiver of any party to any such Company Material Agreement;

(iii)result in the creation or imposition of any Lien upon, or any Person obtaining any right to acquire or other interest in, any properties, assets or rights of any Acquired Company;

(iv)violate or conflict with any Law applicable to any Acquired Company or their respective businesses or properties; or

(v)require any authorization, consent, order, license, permit or approval of, or notice to, or filing, registration or qualification with, any Governmental Authority, except in connection, or in compliance, with the notification and waiting period requirements of the HSR Act;

except, in each case of (ii), (iii), (iv) or (v), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Acquired Companies or a material adverse effect on the ability of the Acquired Companies to perform their respective obligations hereunder or under any Transaction Document.

4.5Financial Statements. The Seller Parties have prior to the execution of this Agreement delivered to the Purchaser a true and complete copy of the following:

(a)the audited consolidated balance sheets of each of (i) Alliant Capital, (ii) ADC I and ADC II, (iii) Alliant Strategic and (iv) Alliant Company as of December 31, 2020, December 31, 2019 and December 31, 2018, and the related audited consolidated statements of operations, member’s equity and cash flows for each of the years then ended, together with a true and correct copy of the related notes and schedules thereto (collectively, the “Audited Financial

Statements”) and the report of the applicable Acquired Companies’ auditor on such Audited Financial Statements; and

(b)the unaudited consolidated balance sheets as of June 30, 2021 of each of (i) Alliant Capital, (ii) ADC, (iii) Alliant Strategic and (iv) Alliant Company, and the related unaudited consolidated statement of operations for the six-month period then ended (together, the “Unaudited Financial Statements”, and collectively the Audited Financial Statements and Unaudited Financial Statement shall be referred to as the “Financial Statements”).

The Financial Statements are in accordance with the books and records of the Acquired Companies and, to the Knowledge of the Company, fairly present in all material respects the financial position and results of operations of the Acquired Companies as of the dates and for the periods indicated, in accordance with GAAP consistently applied during such periods (except as may be indicated in the notes to the Financial Statements and except that the notes to the Unaudited Financial Statements, if any, may not be in accordance with GAAP).

4.6Absence of Undisclosed Liabilities. The Acquired Companies do not have any Liabilities of the type required to be disclosed in their balance sheet in accordance with GAAP, except for (a) obligations, liabilities and commitments reflected or reserved against in the Audited Financial Statements as of December 31, 2020 (the “Balance Sheet Date”) or disclosed in the notes thereto, and (b) current liabilities incurred by each Acquired Company in the Ordinary Course after the Balance Sheet Date that, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on such Acquired Company.

4.7Absence of Certain Changes. Between the Balance Sheet Date and the date hereof, each Acquired Company and Non-Controlled Entity has conducted its business only in the Ordinary Course and:

(a)there has been no:

(i)development, change, event or occurrence that, individually or in the aggregate, has had, or would be reasonably likely to have, a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole); or

(ii)physical damage or destruction to the assets of any Acquired Company or Non-Controlled Entity that is not covered by insurance or would be reasonably likely to have a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole); and

(b)except as set forth on Section 4.7(b) of the Company Disclosure Letter, no Acquired Company has (nor any party acting on behalf of or with respect to an Acquired Company), directly or indirectly:

(i)outside of the Ordinary Course of Business, amended or otherwise changed its Organizational Documents;

(ii)outside of the Ordinary Course of Business, (A) issued, granted or sold any equity interests or securities, (B) issued, granted or sold any security, option, warrant, call, subscription or other right of any kind, fixed or contingent, that directly or indirectly calls for the issuance, sale, pledge or other disposition of any membership interests or any other equity security, (C) entered into any agreement, commitment or understanding calling for any transaction referred to in clause (A) or (B) of this paragraph (ii), or (D) made any other changes in its equity capital structure;

(iii)outside of the Ordinary Course of Business, declared, set aside or paid any noncash dividend or other noncash distribution (whether in membership interests, property or any combination thereof) in respect of any membership interests or any other equity security, or purchased, redeemed or otherwise acquired, any membership interests or any other equity security for consideration other than cash;

(iv)other than capital expenditures that do not exceed $50,000 individually or $250,000 in the aggregate or appropriations or commitments with respect thereto of no more than $250,000, made any capital expenditures or appropriations or commitments with respect thereto;

(v)created, incurred or assumed any Indebtedness in excess of $250,000;

(vi)paid, discharged or satisfied claims, liabilities or obligations (absolute, accrued, contingent or otherwise and whether due or to become due) that involve payments or commitments to make payments exceeding $100,000 in the aggregate, other than liabilities or obligations incurred in the Ordinary Course;

(vii)assumed, endorsed, guaranteed or otherwise become liable or responsible for (whether directly, contingently or otherwise) any Indebtedness of any other Person, other than in the Ordinary Course;

(viii)entered into any transaction or series of related transactions involving total payments to or by it of, or involving the acquisition or disposition by it of property, assets or rights having a value of, more than $100,000 in the aggregate except those entered into in the Ordinary Course;

(ix) (i) entered into, adopted, contributed to, or become obligated to contribute to, any Employee Benefit Plan or any other benefit plan, policy or program, (ii) entered into any collective bargaining agreement or other similar agreement with a labor union or works council, (iii) granted to any of its current employees, officers, directors, independent contractors or consultants with total compensation in excess of $200,000 per year any increase in compensation, (iv) caused or instituted any plant closing or mass layoff as defined by WARN, (v) acted to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant of any Acquired Company, or (vi) hired, promoted or terminated the employment of any current or former officer, manager or employee of any Acquired Company that had or would have total compensation in excess of $200,000 per year;

(x)materially changed its accounting methods, principles or practices, except as required by GAAP;

(xi)waived any right or entered into any one or more transactions that, individually or in the aggregate, has had, or would be reasonably likely to have, a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole);

(xii)mortgaged, pledged or subjected to any material Lien (other than Permitted Liens) any of its assets, other than in the Ordinary Course;

(xiii)sold or transferred any of its assets (including, without limitation, any Intellectual Property), other than in the Ordinary Course;

(xiv)settled or compromised any Tax Audit or other proceeding or Tax liability, entered into any closing agreement with respect to Taxes, waived any statute of limitation in respect of Taxes, agreed to any extension of time with respect to a Tax assessment or deficiency (excluding extensions granted automatically under applicable Law), surrendered any right to claim a Tax refund, offset or other reduction in Tax liability, made, revoked or changed any Tax accounting, recording method or election, filed any amended Tax Return, or taken any action outside the ordinary course of business with respect to Tax matters; or

(xv)authorized any of, or committed or agreed to take, whether in writing or otherwise, any of the foregoing actions.

4.8Taxes.

(a)All Tax Returns required to be filed by or with respect to each Acquired Company have been timely filed in accordance with all applicable Laws (taking into account any valid extensions), and such Tax Returns are true, correct and complete in all material respects. All Taxes due and owing by or with respect to each Acquired Company have been duly and timely paid. Each Acquired Company has made adequate provision in the Audited Financial Statements as of December 31, 2020 in accordance with GAAP for the payment of, all material Taxes with respect to each Acquired Company for all open periods (including any portions thereof) and for all such amounts owed or accrued and not otherwise paid. Since the Balance Sheet Date, no material liability for Taxes has been incurred or accrued by or with respect to any Acquired Company outside the Ordinary Course.

(b)Except as set forth on Section 4.8(b) of the Company Disclosure Letter, each of the following has been delivered or made available, as applicable, to Purchaser in a timely manner prior to the date hereof: (1) complete copies of all Income Tax Returns and other material Tax Returns of and with respect to each First Tier Acquired Company and Upper Tier Fund, which have been filed through the date hereof for the three (3) preceding taxable years, have been delivered to the Purchaser prior to the date hereof, (2) all revenue agent’s reports, notices or proposed notices of deficiency or assessment, audit reports, information document requests,

material correspondence and other similar documentation relating to Taxes or Tax Returns of or with respect to any Acquired Company relating to all tax years for which the statute of limitations has not expired; (3) all ruling requests, technical advice memoranda, closing or similar agreements, gain recognition agreements (within the meaning of Treasury Regulations Section 1.367(a)-8 or 8T (as applicable)), or similar agreements or documents relating or attributable to an Acquired Company that could reasonably be expected to affect any period of Purchaser or any of its Affiliates ending after the Closing Date or for which the statute of limitations has not expired or for which Purchaser or its Affiliates has any Tax or other liability; (4) all Tax Sharing Agreements or similar agreements to which any Acquired Company is a party or under which any Acquired Company has any Tax liability (other than any contract entered into in the ordinary course of business no primary purpose of which relates to Taxes)); and (5) all Tax abatement or similar contracts (or any other contracts) with any Governmental Authority to which any Acquired Company is a party (other than any contract entered into in the ordinary course of business no primary purpose of which relates to Taxes.

(c)There are no Liens for Taxes (other than Taxes not yet due) upon any property or assets of any Acquired Company.

(d)There are no Tax Audits currently active or pending with regard to any Taxes or Tax Returns with respect to any Acquired Company or the Seller Parties (with respect to the assets or activities of the Acquired Companies) and no such Tax Audit is threatened in writing (or, to the Knowledge of the Company, otherwise). No Acquired Company or Seller Party has received any written (or, to the Knowledge of the Company, other) notice of any intent to initiate any Tax Audit or to open any other review or any written request for information with respect to Tax matters. Except as set forth on Section 4.8(d) of the Company Disclosure Letter, no written (or, to the Knowledge of the Company, other) claim has ever been made by a Tax Authority in a jurisdiction where an Acquired Company or the Seller Parties (with respect to the assets or activities of the Acquired Companies) does not file Tax Returns that any such party is or may be subject to taxation by, or a requirement to file any Tax Return in, that jurisdiction. There is no litigation or assessment pending or proposed with respect to any liability for Tax that relates to an Acquired Company.

(e)No Acquired Company or Seller Party (with respect to any Acquired Company) is a party to or bound by any agreement providing for the allocation, indemnification, or sharing of Taxes (other than any agreement entered into in the ordinary course of business no primary purpose of which relates to Taxes) (collectively, “Tax Sharing Agreements”), and none of the Acquired Companies, Purchaser, Parent, or any of their respective Affiliates shall have any liability after the Closing Date pursuant to any such agreement.

(f)There are no elections with respect to Taxes affecting any Acquired Company, other than such elections shown on or in the Tax Returns that have been delivered or made available to Purchaser prior to the date of this Agreement.

(g)No Acquired Company or Seller Party (with respect to any Acquired Company) has (i) agreed, or is required, to make any adjustment pursuant to Section 481(a) of the Code (or similar provisions of other Laws), (ii) filed a pending application with any Tax Authority

requesting permission for any change in accounting method, or (iii) received a written (or, to the Knowledge of the Company, other) notice from the IRS or any other Tax Authority proposing any such adjustment or change in accounting method.

(h)Each Acquired Company and Seller Party (with respect the Acquired Companies) (1) has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any present or former employees, agents, independent contractors, creditors or members or any other Person, and (2) has complied with all other withholding Tax provisions and information reporting requirements and has properly maintained any and all certificates, forms, and other documents required by Law for any exemption from withholding and remitting any Taxes or collecting and remitting any Taxes, as applicable.

(i)No extension of time within which to file any Tax Return that relates to an Acquired Company has been requested or granted, which Tax Return has not since been timely filed (other than any automatic extension for which approval of a Tax Authority is not required). There are no waivers or extensions (nor any request for the foregoing) of any applicable statute of limitations for the assessment or collection of Taxes or claim for Taxes which remain in effect (other than any automatic extension for which approval of a Tax Authority is not required).

(j)There are no Tax rulings, requests for rulings, or closing agreements relating to any Acquired Company which could affect its liability (or that of Purchaser, Parent, or any of their respective Affiliates) for Taxes for any period after the Closing Date. Except for powers of attorney granted to the Acquired Company’s accountants and advisors in the Ordinary Course with respect to routine payroll matters, no power of attorney has been granted by or on behalf of an Acquired Company with respect to any matter relating to Taxes which is currently in force.

(k)No Acquired Company or Seller Party has participated in a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) (or any similar provision of U.S. state, local or non-U.S. Law).

(l)No Acquired Company or Seller Party (with respect to an Acquired Company) will be required to include any item of income or gain in, or be required to exclude any item of deduction of loss from, any taxable period ending after the Closing Date as a result of any (i) change in accounting method that is either agreed to on or prior to the Closing Date or required by law for a Pre-Closing Tax Period, (ii) use of an improper method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, (iii) method of accounting that defers the recognition of income to any period ending after the Closing Date, (iv) “closing agreement” as described in Section 7121 of the Code (or similar provision of U.S. state, local or non-U.S. Tax Law) entered into with any Tax Authority on or prior to the Closing Date, (v) installment sale or open transaction disposition made on or prior to the Closing Date, (vi) deferred intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of U.S. state, local or non-U.S. Law) on or prior to the Closing Date, or (vii) prepaid amount or deferred revenue accrued on or prior to the Closing Date.

(m)No Acquired Company has, in the prior three-year period, either distributed stock of another Person or had its stock distributed by another Person in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code.

(n)No Acquired Company owns any equity in any non-U.S. corporation.

(o)No Acquired Company or Seller Party (with respect to an Acquired Company) has taken a reporting position on a Tax Return that, if not sustained, could be reasonably likely to give rise to a penalty for substantial understatement of U.S. federal income Tax under Section 6662 of the Code (or any similar provision of U.S. state, local or non-U.S. Law).

(p)No Acquired Company is or has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the Code.

(q)All Acquired Companies are properly classified as partnerships or disregarded entities for U.S. federal income tax purposes and no Acquired Company nor any Person on behalf of, or with respect to, such Acquired Company has made or filed (or will make or file on or before the Closing Date) an election for such Acquired Company to be treated otherwise.

(r)No Seller Party is a non-U.S. person subject to withholding under Section 1445 of the Code and the regulations promulgated thereunder.

No representations are made concerning the amount of, or limitations on the use of, an Acquired Company’s net operating losses or capital losses that are attributable to a Pre-Closing Tax Period, in each case for Tax periods beginning after the Closing Date.

4.9Legal Matters.

(a)General.

(i)Except as set forth on Section 4.9(a)(i) of the Company Disclosure Letter, (A) there is no Claim, investigation, inquiry, review, demand or request for information, pending against, and to the Knowledge of the Company no Claims, investigations, inquiries, reviews, demands or requests for information threatened against, any Acquired Company, any Non-Controlled Entity or any such Acquired Company’s or Non-Controlled Entity’s properties or rights at law or in equity, before or by any court, arbitrator, panel or other Governmental Authority and (B) no Acquired Company or Non-Controlled Entity is operating under, or subject to, any judgment, decree, writ, injunction, ruling, award, stipulation, determination or order (collectively, “Judgments”) of any Governmental Authority, other than in the case of (A) and (B) any such claims and Judgments that, individually or in the aggregate, do not have and would not be reasonably likely to have, a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole).

(ii)Since January 1, 2019, each Acquired Company and Non-Controlled Entity has complied in all material respects with all applicable Laws, and is not in violation of, and have not received any notices of violation with respect to, any Laws in connection with the conduct of its business or the ownership or operation of its business, assets and properties, including, as applicable:

(A)state usury, consumer lending and insurance Laws, the Truth in Lending Act, the Consumer Credit Protection Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act, the USA PATRIOT Act, the International Money Laundering Abatement and Anti-Terrorist Financing Act, the Home Mortgage Disclosure Act, the Homeowners Protection Act, the Flood Disaster Protection Act, the Federal Trade Commission Act, and other federal, state, local and foreign Laws or Regulations regulating mortgage origination, mortgage banking, mortgage brokerage or agency, other commercial or personal loans, and lending or servicing loans generally; and

(B)any federal, state, local and foreign Laws or Regulations requiring (i) registration, licensing or qualification of or otherwise regulating investment advisers, investment companies or broker-dealers, including the Investment Advisers Act and the Investment Company Act, or (ii) registration of securities, including the Securities Act;

in each case except for noncompliance or violations as, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole).

(iii)Neither any Acquired Company nor any Acquired Company’s officers, key employees or Persons performing management functions similar to officers or directors has received since January 1, 2019 any written claim, demand, notice, complaint, court order or administrative order from any Governmental Authority under, or relating to, any violation or possible violation of any applicable Laws related to the business and operations of such Acquired Company or an Non-Controlled Entity that, with respect an Acquired Company, did or would be reasonably likely to result in fines or penalties of $50,000 or more with respect to any individual violation, or, with respect to a Non-Controlled Entity, did or would be reasonably likely to have a Material Adverse Effect on the Acquired Companies, taken as a whole.

(iv)The Acquired Companies and Non-Controlled Entities (a) own or hold all Permits that are material for the conduct of their respective businesses as presently conducted. The Acquired Companies and Non-Controlled Entities are in all material respects in compliance with all such Permits. Since January 1, 2019, no event has occurred and is continuing which permits, or after notice or lapse of time or both would permit, any modification, revocation, non-renewal or termination of any material Permit of the Acquired Companies or Non-Controlled Entities.

(v)Since January 1, 2019, no Acquired Company nor Non-Controlled Entity has received any written notice asserting any noncompliance in any material respect with any Law or Permit, except for any such noncompliance that, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole). To the Knowledge of the Company, there is no Law proposed or under consideration that, if effective, individually or in the aggregate, would have or would be reasonably likely to have, a Material Adverse Effect such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole). No governmental, administrative or judicial authority has indicated in writing any intention to initiate any investigation, inquiry or review involving an Acquired Company, Non-Controlled Entity or any of its properties or rights, except, with respect to a Non-Controlled Entity, for any such investigation, inquiry or review that, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect on the Acquired Companies, taken as a whole.

(b)Certain Securities Law Matters.

(i)No ASI Fund or Upper Tier Fund has made an investment, directly or indirectly, in any Person that is not a limited partnership or limited liability company owned and controlled by (A) the relevant ASI Fund or Upper Tier Fund and/or (B) the relevant ASI Fund’s or Upper Tier Fund’s general partner or managing member or an Affiliate of its general partner or managing member. For purposes of the foregoing, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the applicable Person.

(ii)Limited partnership interests in Alliant Strategic Preservation Fund II, Ltd. were offered and sold in accordance in all material respects with the requirements and conditions applicable to a private offering made in reliance upon Rule 506(b) under the Securities Act.

(iii)To the Knowledge of the Company, prior to admitting each subscriber for a limited partnership interest or membership interest in a Rule 506(c) Issuer as a limited partner or member of such Rule 506(c) Issuer, the general partner or managing member of such Rule 506(c) Issuer obtained written confirmation from a Person described in clause (1), (2), (3) or (4) of Rule 506(c)(2)(ii)(C) under the Securities Act that such Person had taken reasonable steps to verify that such subscriber was an accredited investor within the three-month period preceding the date of the subscriber’s admission and had determined that such subscriber was an accredited investor as defined in Rule 501 under the Securities Act.

(iv)With respect to each Rule 506 Issuer, to the Knowledge of the Company, no Covered Person was subject to any of the disqualifications described in clauses (i) through (viii) of Rule 506(d)(1) under the Securities Act at the time of the sale of any

limited partnership interest or membership interest in such Rule 506(b) Issuer or Rule 506(c) Issuer.

4.10Real Property.

(a)Except as set forth on Section 4.10(a) of the Company Disclosure Letter, the Acquired Companies do not directly own any real property.

(b)The leases and other agreements and documents listed on Section 4.10(b) of the Company Disclosure Letter (collectively, the “Real Property Leases”) are the only real property leased by the Acquired Companies or which the Acquired Companies have an option to lease (collectively, the “Leased Real Property”).

(c)The Acquired Companies have a good and valid leasehold interest in the Leased Real Property, free and clear of any and all monetary Liens, and do not have and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the applicable Acquired Company, free and clear of any and all other Liens, except for Permitted Liens.

(d)True and correct copies of the Real Property Leases have been delivered or made available for review to Purchaser. Except as set forth on Section 4.10(b) of the Company Disclosure Letter, the Real Property Leases are unmodified and in full force and effect, and there are no other material agreements, written or oral, affecting the use and occupancy of the Leased Real Property. Neither any Acquired Company nor, to the Knowledge of the Company, any landlord or other party, is in material default under any Real Property Leases beyond any applicable notice and cure period, and no defaults by any Acquired Company or any landlord or other party have been alleged in writing thereunder. Since January 1, 2019, no Acquired Company has given or received any written notice of default under any of the Real Property Leases.

(e)Since January 1, 2019, no Acquired Company has received written notice of, and there is no Litigation pending (or, to the Knowledge of the Company, threatened) (a) to take all or any portion of the Leased Real Property, or any interest therein, by eminent domain, or (b) to modify the zoning of, or other governmental rules or restrictions applicable to, the Leased Real Property, or the current use thereof, which, in each case with respect to the items referenced in clauses (a) and (b) above, would have or would be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on any Acquired Company.

(f)There are no material Contracts with any Governmental Authority affecting the use, ownership or occupancy of any Acquired Company’s interest in the Leased Real Property.

(g)Except as set forth in the Real Property Leases, no Acquired Company has made or entered into any Contracts to sell, mortgage, pledge or hypothecate, lease, sublease, convey, alienate, transfer or otherwise dispose of or grant any Liens (other than Permitted Liens) on the Leased Real Property, or any portion thereof. Except as set forth in the Real Property Leases, no Person has any right or option to acquire or lease, or right of first refusal with respect to, any Acquired Company’s interest in the Leased Real Property or any part thereof, and to the

Knowledge of the Company and except as set forth in the Real Property Leases, the Leased Real Property is not subject to any outstanding purchase options.

4.11Condition and Sufficiency of Assets. Except as set forth in Section 4.11 of the Company Disclosure Letter, the buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property used or owned directly by the Acquired Companies are structurally sound, are in good operating condition and repair, and are adequate for the uses to which they are being put by the Acquired Companies, and none of such buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property used or owned by Acquired Companies is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost. The buildings, plants, structures, furniture, fixtures, machinery, equipment, vehicles and other items of tangible personal property currently owned or leased by each Acquired Company, together with all other properties and assets of such Acquired Company, are sufficient for the continued conduct of such Acquired Company’s business after the Closing in substantially the same manner as conducted prior to the Closing and constitute all of the rights, property and assets necessary to conduct the business of such Acquired Company as currently conducted.

4.12Intellectual Property.

(a)Section 4.12(a) of the Company Disclosure Letter sets forth a true, correct and complete list of, and separately identifies, all Company Registered Intellectual Property and all material unregistered Trademarks in the Company Owned Intellectual Property and sets forth, as applicable: (i) for each item, the full legal name of the owner of record, applicable jurisdiction or registrar, status, application or registration number and date of application, registration or issuance, as applicable and (ii) each action, filing and payment that must be taken or made on or before the date that is ninety (90) days after the date of this Agreement in order to maintain such item of Company Registered Intellectual Property. All Company Registered Intellectual Property is subsisting and, to the Company’s Knowledge, valid and enforceable.

(b)The Acquired Companies are the sole and exclusive owner of and have valid and enforceable title (free and clear of all Liens other than Permitted Liens) to all Company Owned Intellectual Property. The Company Owned Intellectual Property is not subject to any judgments or limitations or restrictions on use or otherwise. No Person other than Acquired Companies has any ownership interest in or exclusive rights to any Company Owned Intellectual Property in the Company Services.

(c)Each Acquired Company has valid legally enforceable rights to use all material Company Intellectual Property currently used by such Acquired Company in the Business. The Company Intellectual Property includes all of the material Intellectual Property necessary to enable Purchaser to conduct the Business in the same manner as currently conducted and planned to be conducted, and following the Closing, Purchaser will own or have (pursuant to the Inbound Licenses) the same rights that the Acquired Companies had immediately prior to the Closing with respect to such Intellectual Property. There is no judgment, Contract or other arrangement that prohibits or restricts any Acquired Company from carrying on the Business anywhere in the world or from any use of the Company Owned Intellectual Property.

(d)Section 4.12(d) of the Company Disclosure Letter identifies each Company IP Agreement (i) pursuant to which any right or interest in any Intellectual Property is licensed, sold, assigned, or otherwise conveyed or provided to an Acquired Company, including any authorizations, permissions to access or exploit any other Person’s Intellectual Property, options, covenants not to sue or similar non-assertion covenants (each, an “Inbound License”), other than (a) IP Assignment Agreements, (b) non-disclosure agreements entered into in the Ordinary Course of Business, and (c) non-exclusive licenses to generally available non-custom third-party software incorporated into any Company Intellectual Property and (d) Contracts with an annual license fee of less than $100,000, (ii) pursuant to which any right or interest in any Company Owned Intellectual Property is licensed, sold, assigned, or otherwise conveyed or provided to a third party, including any authorizations, permissions to access or exploit any Company Owned Intellectual Property, options, covenants not to sue or similar non-assertion covenants (each, an “Outbound License”), other than any non-disclosure agreements entered into in the Ordinary Course of Business, (iii) providing for the development of any Software or other Intellectual Property, independently or jointly, in the course of conducting the Business, by any Acquired Company on behalf of a third party or by a third party on behalf of any Acquired Company, and (iv) that is a settlement agreement, consent to use agreement, coexistence agreement, release, permission or covenant not to sue or other similar Contract, in each case relating to Company Owned Intellectual Property. Except with respect to the agreements listed in Section 4.12(d) of the Company Disclosure Letter, or (a) non-exclusive licenses to generally available non-custom third-party software incorporated into any Company Intellectual Property and (b) Contracts with an annual license fee of less than $100,000, no Acquired Company is obligated to make any payments by way of royalties, fees, or otherwise to any owner or licensor of, or other claimant to, any Intellectual Property. The Acquired Companies have provided Purchaser with true and complete copies of all Company IP Agreements required to be listed on Section 4.12(d) of the Company Disclosure Letter. None of the Company IP Agreements grant any third party exclusive rights to or under any Company Owned Intellectual Property. To the Company’s Knowledge, all Company IP Agreements are valid, binding and enforceable by the Acquired Companies against the other parties thereto, and the Acquired Companies and, to Company’s Knowledge, such other parties, are in compliance with the terms and conditions of the Company IP Agreements. No other party to any Company IP Agreement has threatened to terminate any of the rights of the Acquired Companies in such Company IP Agreement.

(e)To the Company’s Knowledge, neither the Company Intellectual Property nor the conduct by any Acquired Company of the Business infringes upon, misappropriates, dilutes or otherwise violates the Intellectual Property of any third Person or constitutes unfair competition or unfair trade practices under the Laws of any jurisdiction. To the Company’s Knowledge, no Person has infringed, misappropriated, or otherwise violated and no Person is currently infringing, misappropriating, or otherwise violating any of the rights of the Acquired Companies in the Company Intellectual Property.

(f)There are no Claims settled, pending or threatened in writing (including in the form of offers to obtain a license), (i) alleging that the conduct of the Business, the Company Intellectual Property or the use by any Acquired Company of any Company Intellectual Property infringes, misappropriates, dilutes, or violates the Intellectual Property of any Person, (ii) challenging the validity, use, enforceability, registrability, ownership or rights of any Acquired

Company with respect to any Company Intellectual Property, (iii) by any Acquired Company of any other Person alleging any infringement, misappropriation, dilution, or other violation by any Person of any Company Intellectual Property. No Acquired Company is aware of any facts or circumstances that could reasonably be expected to give rise to any such Claim. No Acquired Company is subject to any outstanding or prospective Governmental Order that restricts or impairs or could reasonably be expected to restrict or impair the use, transfer or licensing of any Company Intellectual Property.

(g)Each Acquired Company has taken reasonable security measures to protect the secrecy and confidentiality of the trade secrets, other technical information, and other confidential and proprietary information of such Acquired Company, including where deemed necessary in an Acquired Company’s reasonable business judgment, entering into appropriate written confidentiality agreements with any officers, directors, employees, consultants, and other Persons with access to such information, and, to Company’s Knowledge, no such information has been disclosed or otherwise accessed by any unauthorized Person or used in any unauthorized manner. All employees, consultants and independent contractors of the Acquired Companies with access to any confidential information relating to the Business have signed a valid and binding written agreement to keep such information confidential, which agreement is in full force and effect.

(h)Each Acquired Company has obtained from each current and former employee, consultant, and contractor responsible for the development of Intellectual Property for or on behalf of an Acquired Company an executed proprietary information and invention assignment agreement pursuant to which such Person (i) agrees to protect the confidential information of the Acquired Company and (ii) presently assigns to the Acquired Company all Intellectual Property created in the course of such Person’s employment or other relationship with the Acquired Company, without further consideration or any restrictions or obligations on the use or ownership of such Intellectual Property. To the Company’s Knowledge, no current or former employee, consultant, or contractor of any Acquired Company is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of invention agreement or similar agreement relating to the protection, ownership, development, use or transfer of Company Intellectual Property or has any right, license, claim or interest whatsoever in or with respect to any Company Owned Intellectual Property.

(i)None of the Company Owned Intellectual Property was developed using any Governmental Authority or university funding or facilities, nor was it obtained from a Governmental Authority or university. No Acquired Company is a member of, and no Acquired Company is obligated to license or disclose any Intellectual Property to, any official or de facto standards setting or similar organization or to any organization’s members.

(j)To the Company’s Knowledge, none of the Company Services or Company IT Systems (i) contains any material bug, defect, or error (including any bug, defect, or error relating to resulting from the display, manipulation, processing, storage, transmission, or use of any data) that adversely affects the use, functionality, or performance of such Company Service or Company IT System or any product or system containing or used in connection with such Company Service or Company IT System; (ii) fails to comply in any material respect with any

applicable warranty or other contractual commitment relating to the use, functionality, or performance of such Company Service or Company IT System or any product or system containing or used in connection with such Company Service or Company IT System; or (iii) contains any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (A) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (B) damaging or destroying any data or file without the user’s consent.

(k)No Software in any Company Service or other Company Intellectual Property is subject to an obligation that, or contains, links, incorporates, is derived from, is distributed with, is combined with, or is being or was developed using Open Source Software in a manner that, would impose or could impose a requirement or condition that any Software of any Acquired Company or any Company Service (i) be disclosed or distributed in source code form, (ii) be licensed under terms that permit making modifications or derivative works, (iii) be licensed, conveyed or redistributable at no charge to subsequent licensees or be subject to any restriction on the consideration to be charged for the distribution thereof or (iv) be subject to a requirement that any patents related to such Software are either licensed to or may not be asserted against, recipients of such Software. Except as set forth in Section 4.12(k) of the Company Disclosure Letter, with respect to any Open Source Software that is or has been used in any way, each Acquired Company is in material compliance with all applicable licenses with respect thereto.

(l)All Software presently used by and Acquired Company and included in the Company Intellectual Property is functional and operates substantially in accordance with the specifications and documentation relating to that Software. Each Acquired Company has in its possession the full and complete source code for the Software presently owned and used by such Acquired Company and included in Company Services and for systems developed by or on behalf of such Acquired Company, and has documented all such source code in a commercially reasonable manner that would enable a programmer of reasonable skill to support the Software and systems. No Acquired Company has disclosed or delivered to any escrow agent or any other Person any of the source code relating to any Company Intellectual Property, and no other Person has the right, contingent or otherwise, to obtain access to or use any such source code. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time or both) will, or could reasonably be expected to, result in the delivery, license or disclosure of any such source code to any Person.

(m)The Company IT Systems are in good working order and condition and have been used and maintained in all material respects in accordance with their documentation, manufacturer requirements and applicable insurance policies. Except as set forth on Section 4.12(m) of the Company Disclosure Letter, no Acquired Company has experienced any material defect in design, workmanship or material of the Company IT Systems, and the Company IT Systems have all of the performance capabilities, processing capacity, resources, characteristics and functions necessary for the conduct of the business of each Acquired Company. There have not been any failures, errors or breakdowns in the Company IT Systems used in the operation of the Business which have caused any material disruption or interruption with respect to the

Business. Each Acquired Company has taken commercially reasonable steps to safeguard the confidentiality, availability, security, and integrity of the Company IT Systems, including implementing and maintaining appropriate backup, disaster recovery, and Software and hardware support arrangements.

(n)Except as set forth in Section 4.12(n) of the Company Disclosure Letter, neither the execution, delivery or performance of this Agreement nor the consummation of any of the transactions contemplated hereunder will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare: (i) a loss of, or Lien on, or any other limitation with respect to, any Company Intellectual Property; (ii) a breach of or default under any Company IP Agreement; (iii) the release, disclosure or delivery of any Company Intellectual Property by or to any escrow agent or other Person; (iv) the grant or transfer to any other Person of any license or other right or interest under, to or in any Company Intellectual Property; (v) an Acquired Company granting to any Person any ownership interest in, covenant not to sue, access to, license or other right with respect to any Company Intellectual Property; or (vi) any Acquired Company or any Company Intellectual Property being bound by, or subject to, any non-compete or other restriction on the operation or scope of their respective businesses or personnel (except as expressly agreed to in this Agreement by the parties). After the Closing, the Purchaser will possess the same rights to the Company Intellectual Property as the Acquired Companies possessed immediately prior to the Closing to the same extent the Acquired Companies would have had the transactions contemplated by this Agreement not occurred and without the payment of any additional amounts or consideration other than fees, royalties or payments which the Acquired Companies would otherwise have been required to pay had the Closing not occurred.

4.13Data Privacy. Except as set forth in Section 4.13 of the Company Disclosure Letter:

(a)During the last three (3) years, each Acquired Company has complied (i) in all material respects with all Privacy and Security Requirements. With respect to Protected Information collected by or on behalf of an Acquired Company, each Acquired Company has during the last three (3) years taken steps that either are required by applicable Privacy and Security Requirements or are otherwise reasonably necessary to protect such Protected Information against loss and unauthorized access, use, modification, disclosure or other misuse, including implementing reasonable measures with respect to the technical and physical security for such Protected Information. No Acquired Company has sold, rented or otherwise made available, in each case, for monetary compensation, and does not sell, rent or otherwise make available, in each case, for monetary compensation, any Protected Information.

(b)In connection with each third-party servicing, outsourcing or similar arrangement involving the third party’s acquisition of or access to Protected Information provided by or on behalf of an Acquired Company, such Acquired Company has taken commercially reasonable efforts to contractually obligate any such third party to (i) comply with the Privacy and Security Requirements applicable with respect to Protected Information, (ii) take reasonable steps to protect and secure the Protected Information from unauthorized disclosure, (iii) restrict use of the Protected Information to those authorized or required under the servicing, outsourcing or similar arrangement, and (iv) certify or guarantee the return or adequate destruction of the Protected Information.

(c)To the Knowledge of the Company, there have been no Security Incidents involving Protected Information in its possession or control, and no third party to whom an Acquired Company has provided access to Protected Information has notified an Acquired Company in writing of (i) any unauthorized acquisition, access, use or disclosure of any such Protected Information that would trigger a notification or reporting requiring under any Privacy and Security Requirements, (ii) any attempted or successful unauthorized access, use, disclosure, modification or destruction of such Protected Information or (iii) any interference with any database, network or information system that could materially affect the privacy or security of such Protected Information.

(d)No Acquired Company received any written notice of any Claim or alleged violations of Privacy and Security Requirements by any Governmental Authority or other Person concerning such Acquired Company’s collection, use, processing, storage, transfer, or protection of Protected Information, and there are no facts or circumstances that could reasonably be expected to give rise to any such Claim.

(e)Neither the execution, delivery, or performance of this Agreement, nor the consummation of any of the transactions contemplated under this Agreement, will violate in any material respect any Privacy and Security Requirements.

4.14Asset Management Portfolio. Except for those properties sold or otherwise removed in the Ordinary Course, either voluntarily or involuntarily, substantially all of the properties in Alliant Company’s asset management portfolio as of July 31, 2021 will be included in Alliant Company’s asset management portfolio as of the Closing Date except to the extent the failure to include such properties would not reasonably be expected to have a Material Adverse Effect on Alliant Company. As of July 31, 2021, the gross equity raised by Alliant Company in its asset management portfolio was approximately $8.5 billion.

4.15Company Agreements.

(a)Section 4.15(a) of the Company Disclosure Letter lists as of the date of this Agreement each of the following Company Agreements (collectively, the “Company Material Agreements”):

(i)any mortgage, indenture, note, installment obligation or other instrument, agreement or arrangement for or relating to any borrowing of money by an Acquired Company other than the Assumed Indebtedness;

(ii)any guaranty, direct or indirect, primary or secondary, by an Acquired Company of any obligation for borrowings or otherwise, excluding those made in the Ordinary Course other than the Assumed Indebtedness;

(iii)any Company Agreement providing for the grant of any preferential rights to purchase or lease any of the material assets of an Acquired Company;

(iv)any Company Agreement providing for any obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons other than in the Ordinary Course;

(v)any Company Agreement that is a collective bargaining agreement with any labor union;

(vi)any Company Agreement providing for any lease or similar arrangement for the use by an Acquired Company of personal property involving payments of in excess of $250,000 per annum that is not cancellable within 30 days without payment of any premium or penalty;

(vii)(A) any Company Agreement (other than an agreement related to employment of Company Employees) with a term in excess of one year and providing for aggregate payments in excess of $250,000 or (B) any Company Agreement that is an agreement related to employment of Company Employees providing for aggregate payments in excess of $200,000 per year (excluding, for scheduling purposes, offer letters for at-will employment that do not include contractual severance obligations and that have materially the same terms as a form provided to Purchaser; provided that, for purposes of clarity, any changes to base salary or hourly rate, target, bonus, title, duties, or other terms that are inherently employee- and position-specific shall not be considered material differences from the form provided);

(viii)any Company Agreement that contains a non-competition provision restricting the businesses of an Acquired Company (or, at any time after the consummation of the Closing, Purchaser or any of its Affiliates) or that grants the other party or any third Person “most favored nation” status with respect to an Acquired Company;

(ix)any Company Agreement relating to the acquisition or disposition of any material amount of assets outside of the Ordinary Course;

(x)any Company Agreement that is an Employee Benefit Plan;

(xi)any Company Agreement that is a partnership, joint venture or similar agreement with a third party, excluding such partnerships or joint ventures set forth on Section 1.1(b), Section 1.1(c) and Section 4.3(c) of the Company Disclosure Letter; and

(xii)any Company Agreement that contains a “Key Man” provision where a Seller Party or principal thereof is the named “Key Man” and investor consent is required under such Company Agreement as a result of the transactions contemplated hereby, including the name of such Person and a brief description of the provision.

(b)Copies of all written Company Material Agreements have been delivered or otherwise made available to Purchaser prior to the date of this Agreement.

(c)With such exceptions as, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on an Acquired Company:

(i)all of the Company Agreements are in full force and effect and are valid and binding on and enforceable against each Acquired Company party thereto in accordance with their terms and, to the Knowledge of the Company, on and against the other parties thereto, except as enforceability may be limited by the effect of any applicable Law of general application relating to bankruptcy, reorganization, insolvency, moratorium or similar Law affecting creditors’ rights or relief of debtors generally, and the effect of general principles of equity, including general principles of equity governing specific performance, injunctive relief and other equitable remedies (regardless of whether enforceability is considered in a proceeding in equity or at law);

(ii)No Acquired Company, and, to the Knowledge of the Company, no other party to any Company Agreement, is in breach of, or default under, any Company Agreement and no event has occurred that, with the giving of notice or the lapse of time or both, would constitute a breach of, or default under, any Company Agreement; and

(iii)No Acquired Company has given to or received from any other Person any written notice or other written communication regarding any actual or alleged violation or breach or, or default under, any Company Agreement.

4.16Labor Relations.

(a)Except as set forth on Section 4.16(a) of the Company Disclosure Letter, No key employee or group of employees has informed the Acquired Companies, either orally or in writing, of any plans to terminate their employment with the Acquired Companies generally or as a result of the transactions contemplated hereby or otherwise.

(b)Except as set forth in Section 4.16(b) of the Company Disclosure Letter, the Acquired Companies are not parties to or bound by any collective bargaining agreement. The Acquired Companies have no knowledge of any organizational effort presently being made or threatened by or on behalf of any labor union with respect to any Company Employee. The Acquired Companies are not engaged in any unfair labor practice and there is (i) no unfair labor practice charge or complaint pending against the Acquired Companies or, to the Knowledge of the Company, threatened against the Acquired Companies before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Acquired Companies, or to the Knowledge of the Company, so threatened, (ii) no strike, labor dispute, slow down or work stoppage pending, or, to the Knowledge of the Company, threatened against the Acquired Companies, and (iii) no union representation question, petition or proceeding existing with respect to the Company Employees.

(c)The Acquired Companies have made available to Parent a true, complete and accurate list of each Company Employee and each current independent contractor, director or consultant of the Acquired Companies (in each case anonymized if needed to comply with applicable Laws), his or her date(s) of hire or engagement by the Acquired Companies, position and title (if any), current rate of compensation (including bonuses, commissions and incentive compensation, if any), and in the case of an employee, whether such employee is hourly or salaried, whether such employee is exempt or non-exempt, whether such employee is absent from active

employment and, if so, the date such employee became inactive, the reason for such inactive status and, if applicable, the anticipated date of return to active employment. There is no employee of Palm Drive who devotes a majority of his or her time to the Business except for those employees identified on Section 4.16(c) of the Company Disclosure Letter. Except as disclosed on Section 4.16(c) of the Company Disclosure Letter, the Acquired Companies have no unsatisfied liability to any previously terminated employee or independent contractor.

(d)All Company Employees are employees at will or otherwise employed such that the Acquired Companies may lawfully terminate their employment at any time, with or without cause, without any contractual severance obligations or notice period of longer than sixty (60) days. A true and correct copy of any form of non-competition, non-solicitation or confidentiality agreement currently in force with any Company Employees and any consultants or independent contractors of the Acquired Companies, and any material variances therefrom, has been delivered to Parent. To the Knowledge of the Company, no employee, officer or director of the Acquired Companies is a party to, or is otherwise bound by, any agreement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee, officer, director or manager and any other Person (“Proprietary Rights Agreement”) that in any way adversely affects or will affect (i) the performance of his or her duties as an employee, officer or director of the Acquired Companies, or (ii) the ability of the Acquired Companies to conduct its business, including any Proprietary Rights Agreement with the Acquired Companies by any such employee, officer or director.

(e)Except as disclosed in Section 4.16(e) of the Company Disclosure Letter, the Acquired Companies have since January 1, 2019 complied in all material respects with all applicable laws, rules and regulations relating to labor, labor relations or employment, including, without limitation, any provisions thereof relating to equal employment opportunity, wages, hours, overtime regulation, employee safety and health, immigration control, drug testing, termination pay, vacation pay, fringe benefits, collective bargaining and the payment and/or accrual of the same and all taxes, insurance and all other costs and expenses applicable thereto, and the Acquired Companies are not liable for any arrearage, or any taxes, costs or penalties for failure to comply with any of the foregoing. The Acquired Companies do not have any plans to implement mass layoffs, plant closings, or other actions prior to Closing that would trigger WARN requirements.

(f)Each person retained as an independent contractor by the Acquired Companies during the last three (3) years qualifies or qualified as an independent contractor and not as an employee of the Acquired Companies under all applicable laws and all applicable Employee Benefit Plans.

(g)Except as disclosed in Section 4.16(g) of the Company Disclosure Letter, since January 1, 2019, there have not been any allegations, charges or complaints concerning employment discrimination, wage payment, overtime obligations or other issues pertaining to unlawful employment practices pending against the Acquired Companies or, to the Knowledge of the Company, threatened.

(h)The Acquired Companies have in their files a U.S. Citizenship and Immigration Services Form I-9 that was validly and properly completed in all material respects

and, if necessary, that has been properly updated, in accordance with applicable Law for each Company Employee (and for any former employee of the Acquired Companies with respect to whom such form is still required to be maintained under applicable Law following the termination of their employment. To the Knowledge of the Company, the Acquired Companies have not hired or continued to employ unauthorized workers and have not used the services of any individual through a staffing agency, Contract or subcontract knowing that the individual was an unauthorized worker.

4.17Employee Benefit Plans.

(a)Section 4.17(a) of the Company Disclosure Letter lists all material Employee Benefit Plans (excluding, for scheduling purposes, offer letters for at-will employment that do not include contractual severance obligations and that have materially the same terms as a form provided to Purchaser; provided that, for purposes of clarity, any changes to base salary or hourly rate, target, bonus, title, duties, or other terms that are inherently employee- and position-specific shall not be considered material differences from the form provided).

(b)Each Employee Benefit Plan is in compliance, in all material respects, with its terms and with ERISA and other applicable laws (including, without limitation, compliance with the health care continuation requirements of Part 6 of Subtitle B of Title I of ERISA (“COBRA”), the Patient Protection and Affordable Care Act and the deferred compensation rules and withholding requirements set forth in Section 409A of the Code), and with any applicable collective bargaining agreement and all other agreements and instruments applicable to any Employee Benefit Plan. Each pension plan, as defined in Section 3(2) of ERISA (“Pension Plan”), of the Acquired Companies is maintained pursuant to a volume submitter or prototype document for which it may properly rely on the applicable opinion or advisory letter. Each such Pension Plan has been qualified under the Code from the effective date of such Pension Plan, and there have been no amendments or other developments since the effective date of such Pension Plan which would cause the loss of such qualified status. No violation of ERISA has at any time occurred in connection with the administration of any of the Employee Benefit Plans, and there are no actions, suits, or claims (other than routine, non-contested claims for benefits) pending or, to the Knowledge of the Company, threatened against the Employee Benefit Plans, or any administrator or fiduciary thereof, which could result in any material liability. Each Employee Benefit Plan can be terminated within thirty days, without payment of any additional contribution or amount and, except as otherwise mandated by ERISA (other than any non-material administrative or termination fees and costs), without the vesting or acceleration of any benefits promised by such Employee Benefit Plan.

(c)The Acquired Companies have heretofore delivered to Parent true and complete copies of each of the following for each Employee Benefit Plan: the current Employee Benefit Plan documents (and any applicable trust agreement, investment management agreement, administrative service contract or insurance contract, if applicable); where the Employee Benefit Plan has not been reduced to writing, a written summary of all material Employee Benefit Plan terms; the most recent IRS determination letter or IRS approval letter relating to each of the Pension Plans; the summary plan description (as currently in effect) and any summary of material modification for each of the Employee Benefit Plans; the most recent summary annual report

furnished for each of the Employee Benefit Plans; the most recent actuarial valuations, if applicable, and latest financial statements for each of the Employee Benefit Plans; and all material documents filed with the IRS, Department of Labor or Pension Benefit Guaranty Corporation during the last six (6) years. Except as set forth on Section 4.17(c) of the Company Disclosure Letter, there is and has been no violation with respect to the filing of applicable reports, documents, and notices regarding such past or present Employee Benefit Plans with the Secretary of Labor or the Secretary of the Treasury or the furnishing of such documents to the participants or beneficiaries of such Employee Benefit Plans and no material adverse change has occurred with respect to the matters covered by such reports, documents, and notices.

(d)Neither the Acquired Companies nor any ERISA Affiliate, nor any of their employees, members, managers, shareholders, or directors have engaged in any transaction in connection with which any of them would be subject either to a civil penalty assessed pursuant to Section 502 of ERISA or a tax imposed by Section 4975 of the Code. The execution and performance of this Agreement will not involve any prohibited transaction within the meaning of Section 406 of ERISA or Section 4975 of the Code.

(e)Neither the Acquired Companies, nor any of their ERISA Affiliates, either currently or at any time in the past, maintains or maintained, contributes or contributed to, sponsors or sponsored or otherwise has or has had any liability with respect to (i) a multiemployer plan as defined in Section 3(37) of ERISA, or (ii) a Pension Plan subject to Title IV of ERISA or Sections 412 or 430 of the Code.

(f)Except as disclosed on Section 4.17(f) of the Company Disclosure Letter, the execution and performance of this Agreement will not (i) constitute a stated triggering event under any Employee Benefit Plan or employment agreement that will result in any payment (whether of severance pay or otherwise) becoming due to any Company Employee, (ii) accelerate the time of payment or vesting or increase the amount of compensation due under any Employee Benefit Plan or employment agreement, (iii) cause any individual to accrue or receive additional benefits, service or accelerated rights to payment of benefits under any Employee Benefit Plan or employment agreement, or (iv) directly or indirectly cause any Acquired Company to transfer or set aside any assets to fund or otherwise provide for benefits for any individual. There are no contracts or arrangements providing for payments that could subject any Person to liability for tax under Section 4999 of the Code or cause the loss of a deduction to an Acquired Company under Section 280G of the Code. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in a “change in ownership or control” of a “corporation” within the meaning of Section 280G(b) of the Code.

(g)Neither the Acquired Companies nor any of their ERISA Affiliates provide, nor have they at any time provided, coverage under any welfare plan (as defined in Section 3(1) of ERISA) (including, but not limited to, life insurance, disability, medical, dental, prescription drugs, or accidental death or dismemberment) to any of their former employees, other than any continuation or conversion coverage which any such former employee may have purchased at his or her own expense.

(h)Except as set forth on Section 4.17(h) of the Company Disclosure Letter, there have been no statements, either written or oral, or communications made or materials provided to any employee or former employee of any Acquired Company, by any person that provide for or could be construed as a contract or promise (i) by any Acquired Company to provide for any pension, welfare, or other insurance-type benefits to any such employee or former employee, whether before or after retirement, other than benefits under the Employee Benefit Plans or (ii) regarding offers of employment or terms and conditions of employment with the Purchaser following the Closing.

(i)Each Employee Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A(d)(1) of the Code and any award thereunder, in each case that is subject to Section 409A of the Code, (i) has been operated in compliance in all respects with Section 409A of the Code and all applicable Internal Revenue Service guidance promulgated thereunder and (ii) either (A) has been in a form which complies with the requirements of Section 409A of the Code or (B) has been timely amended under guidance issued pursuant to Section 409A of the Code so that its terms and provisions comply with the requirements of Section 409A of the Code.

4.18Transactions with Insiders. Except as set forth in Section 4.18 of the Company Disclosure Letter, there are no Affiliate Transactions, other than compensation paid or transactions entered into in the Ordinary Course.

4.19Environmental Matters.

(a)Except as, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on such Acquired Company or such Non-Controlled Entity (with respect to a Non-Controlled Entity, a Material Adverse Effect on the Acquired Companies, taken as a whole):

(i)(A) each Acquired Company and Non-Controlled Entity has complied with, and is currently in compliance with, the provisions of all applicable Environmental Requirements; and (B) to the Knowledge of the Company, the Leased Real Property is in compliance with the provisions of all applicable Environmental Requirements;

(ii)no Hazardous Materials have been discharged, disbursed, released, stored, treated, generated, disposed of or allowed to escape on, in, under, or from the Leased Real Property by any Acquired Company or Non-Controlled Entity in violation of Environmental Law or that requires Remedial Action;

(iii)there are no underground storage tanks, asbestos, asbestos-containing materials, polychlorinated biphenyls (PCBs) or PCB wastes located, contained, used or stored at or on the Leased Real Property and there are no underground storage tanks, asbestos, asbestos-containing materials, polychlorinated biphenyls (PCBs) or PCB wastes located, contained, used or stored at or on the real property used, owned, operated or controlled by the Non-Controlled Entities;

(iv)there has been no notice, order, directive, Claim or demand from any Governmental Authority to any Acquired Company or Non-Controlled Entity with respect to: (A) the generation, storage, use, handling, transportation, treatment, emission, spillage, disposal, release, discharge or removal of any chemical, Hazardous Materials, waste containing any chemical or Hazardous Material at the Leased Real Property, or asbestos; or (B) any actual or potential violation or failure to comply with any Environmental Requirement with respect to the Leased Real Property;

(v)there has been no notice by any Acquired Company under any Law reporting a release of a chemical, Hazardous Material, or waste containing any chemical or Hazardous Material into the environment with respect to the Leased Real Property, and there has been no notice by any Non-Controlled Entity under any Law reporting a release of a chemical, Hazardous Material, or waste containing any chemical or Hazardous Material into the environment with respect to the property used, owned, operated or controlled by a Non-Controlled Entity;

(vi)there have been no negotiations, agreements or undertakings by any Acquired Company with any Person relating to any Remedial Action with respect to the Leased Real Property, and there have been no negotiations, agreements or undertakings by any Non-Controlled Entity with any Person relating to any Remedial Action with respect to property used, owned, operated or controlled by a Non-Controlled Entity;

(vii)there are no acts or omissions by any Acquired Company or Non-Controlled Entity that give rise to, or are reasonably likely to give rise to, Liabilities under Environmental Requirements. There are no facts, events or conditions with respect to the past or present operation of the Leased Real Property by any Acquired Company or property used, owned, operated or controlled by a Non-Controlled Entity that interfere or prevent continued compliance with, or that give rise to any action, suit, Claim or proceeding under, or that are reasonably likely to interfere with or prevent continued compliance with, or that are reasonably likely give rise to any action, suit, Claim or proceeding under, Environmental Requirements; and

(viii)there has been no Hazardous Materials generated at the Leased Real Property by any Acquired Company or any property used, owned, operated or controlled by a Non-Controlled Entity that have been disposed of or come to rest at any site that has been included in any published federal, state or local priority list of hazardous or toxic waste sites, or that is the subject of a Claim or demand from any third party against any Acquired Company or Non-Controlled Entity, as applicable.

(b)To the extent in the Acquired Companies’ possession, each Acquired Company has made available to Purchaser all: (i) copies of all reports, studies, analyses or tests, and any results of monitoring programs, in each case that were prepared or conducted during the last three (3) years, in the possession or control of any Acquired Company pertaining to soil, groundwater or geological conditions or the generation, storage, use, handling, transportation, treatment, emission, spillage, disposal, release or removal of Hazardous Materials at, in, on or under the Leased Real Property or property used, owned, operated or controlled by a Non-

Controlled Entity; and (ii) a copy of any environmental investigation or assessment of the Leased Real Property or property used, owned, operated or controlled by a Non-Controlled Entity in the possession of any Acquired Company that was conducted by any Acquired Company, the Seller Parties or any environmental consultant engaged by them or a Non-Controlled Entity, as applicable, during the last three (3) years.

(c)Neither the Leased Real Property nor property used, owned, operated or controlled by a Non-Controlled Entity is subject to any Lien securing the costs of any Remedial Action arising under Environmental Requirements for which Remedial Action an Acquired Company is liable.

4.20Bank Accounts, Authorized Signatories. Section 4.20 of the Company Disclosure Letter sets forth the name of each bank, broker-dealer or other financial institution in which any Acquired Company has an account or safe deposit box or standby letter of credit, and the names of all authorized signatories and persons authorized to draw thereon or to have access thereto.

4.21Brokers. Except as set forth on Section 4.21 of the Company Disclosure Letter, neither the Seller Parties, the Acquired Companies, nor any of their respective directors, officers or employees has employed any broker or finder, or incurred or will incur an obligation of an Acquired Company to pay any broker’s, finder’s or similar fees, commissions or expenses, in each case in connection with the transactions contemplated by this Agreement or any other Transaction Document. All such fees and expenses will be paid by the Seller Parties without recourse in any way to the Acquired Companies or the Purchaser.

4.22Title to Assets. Except as set forth on Section 4.22 of the Company Disclosure Letter or as, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on an Acquired Company, the Acquired Company have good and marketable title to or valid leasehold or license interests in all of the assets and properties that they purport to own, lease or license (including those assets reflected on the Financial Statements), free and clear of any and all Liens, except Permitted Liens. Section 4.22 of the Company Disclosure Letter sets forth a list of all material assets that relate to the businesses of the Acquired Companies that are owned by any Seller Party or any Affiliate of such Seller Party (excluding the Acquired Companies) (the “Affiliate Assets”). All of the tangible and intangible assets and properties that the Acquired Companies own, lease or license (including those assets reflected on the Financial Statements) do, and as of the Closing Date will, (a) constitute all of the material assets, tangible and intangible, of any nature whatsoever, necessary to operate the Acquired Companies’ businesses in the manner such businesses are presently operated by the Acquired Companies, and (b) include all of the material operating assets of the Acquired Companies. No Insider has any right in or to any of the assets and properties that are owned, used or held for use by an Acquired Company or its Affiliates with respect to the businesses of such Acquired Company except for the right to receive compensation for services rendered in the Ordinary Course.

4.23Insurance.

(a)Each of the insurance policies now maintained by each First Tier Acquired Company and the respective limits for such insurance policy, is set forth in Section 4.23(a) of the

Company Disclosure Letter hereto (collectively with all other insurance policies maintained by the Acquired Companies, the “Insurance Policies”). Each Insurance Policy is in full force and effect, no Acquired Company is in default under any Insurance Policy in any material respect, no claim for coverage under any Insurance Policy where the claimed amount would reasonably be expected to exceed the self-insured retention or deductible has been denied or disputed during the three (3) years immediately preceding the date of this Agreement, and during the three (3) years immediately preceding the date of this Agreement, no Acquired Company has received any notice of cancellation or intent to cancel or increase or intent to increase premiums with respect to any Insurance Policy.

(b)There are no outstanding performance or surety bonds issued on behalf of any Acquired Company.

(c)During the three (3) years immediately preceding the date of this Agreement, no performance or other surety bond issued on behalf of any Acquired Company has been forfeited by the Acquired Companies or presented for payment by its obligee.

4.24Seller Parties’ Ownership of Transferred Equity; Title. At the date hereof, the Seller Parties are, and as of immediately prior to the Closing the Seller Parties will be, the sole owners of record and beneficially of the Transferred Equity. The Seller Parties shall have and transfer to Purchaser at the Closing, good, valid and marketable title to the Transferred Equity, free and clear of any and all Liens (other than Permitted Liens, any restrictions on the subsequent transfer of the Transferred Equity by Purchaser that may be imposed under applicable securities Laws and Liens created by Purchaser).

4.25Low Income Housing Tax Credits. Each equity investment in a Lower Tier Partnership by an Upper Tier Fund is structured according to affordable housing industry standards and norms to achieve the purpose of allowing the third-party investors of such Upper Tier Fund to be eligible for and claim Credits and losses associated with the equity investment in such Lower Tier Partnership. Set forth in Section 4.25 of the Company Disclosure Letter is a list, as of the date hereof, setting forth each Upper Tier Fund’s property list and benefits schedule showing the estimated benefits currently projected for or projected at the closing of such Upper Tier Fund. Except as set forth in Section 4.25 of the Company Disclosure Letter:

(a)there is no event of default or likelihood of a default under the governing documents of any Upper Tier Fund;

(b)No Upper Tier Fund has been subject to recapture of LIHTCs or other housing credits due to decrease in eligible basis, noncompliance with income and rent restrictions, or casualty loss or condemnation other than amounts recovered through an equity adjuster or cash payment from the Lower Tier Partnership’s Principals;

(c)Each Upper Tier Fund has a contractual right pursuant to the relevant agreements to consent or withhold consent to the sale of the Lower Tier Partnership’s multifamily rental housing project which is a condition precedent to the exercise of any right of first refusal held by a qualified non-profit corporation, governmental agency or tenant association;

(d)No Acquired Company has paid any amounts (whether by loan, cash payment or otherwise) under any guarantee to any Lower Tier Partnership, and no Acquired Company has paid any amounts (whether by loan, cash payment or otherwise) under any guarantee to any Upper Tier Fund;

(e)The total amount of accrued and outstanding Asset Management Fees owed by all Upper Tier Funds to any Acquired Companies was $327,396,936.40 as of December 31, 2020, pursuant to each Upper Tier Fund’s audit. No Upper Tier Fund has failed to pay to the Acquired Company which is its general partner or managing member or its asset manager any Upper Tier Asset Management Fee (as defined in the applicable Upper Tier Limited Partnership Agreement) when such payment was permitted by the applicable Upper Tier Limited Partnership Agreement; and

(f) For any IRS Forms 8823 that have been filed with respect to any Lower Tier Partnership’s multifamily rental housing project of which the Company has Knowledge: (i) the underlying deficiencies giving rise to the filing of the IRS Form 8823 have been rectified; and/or (ii) the Lower Tier Partnership’s Principals have paid or are contractually required to pay from the cash flow of the multifamily rental housing project (by equity adjuster or cash payment) any recapture that may result from such IRS Form 8823.

4.26AFAH Finance’s Securitization Assumed Debt (“AFAH Debt”).

(a)The unpaid principal balance of the AFAH Debt as of July 31, 2021 was $155,127,860.69;

(b)The AFAH Debt’s Indenture remains in full force and effect and is free from any Event of Default as defined in the Indenture; and the representations and warranties made under the Indenture were true and correct as of the date thereof and to the extent any such representation or warranty is continuing, remains true and correct as of the date hereof;

(c)The AFAH Debt’s Servicing Agreement and Fund Management Agreement remain in full force and effect and are free from an Event of Default as defined therein; and there is no Servicer Termination Event or Fund Manager Termination Event under the Servicing Agreement and the Fund Management Agreement, respectively;

(d)All accounts required to be established by the Indenture were established and are maintained in accordance with the Indenture; and all accounts required to be established and maintained by the Servicer have been so established and maintained in accordance with the Servicing Agreement; and

(e)Shawn Horwitz shall remain the Key Person within the meaning of Section 6.01(j) of the Indenture on the Closing Date and for a two-year period thereafter.

4.27PPP Loans.

(a)Each Acquired Company that obtained a PPP Loan has provided to Purchaser true, complete and correct copies of such Acquired Company’s application for its PPP

Loan(s) and all information submitted to the applicable lender in support thereof. The PPP Loans constituted one or more “covered loans” as defined in Section 1102 of the CARES Act. Each Acquired Company met the eligibility requirements for application and receipt of its PPP Loan(s), and each Acquired Company was otherwise in compliance in all material respects with the CARES Act with respect to its PPP Loan(s). Each Acquired Company used 100% of the proceeds of its PPP Loan(s) solely for PPP Permitted Uses and PPP Forgivable Uses. Each Acquired Company that obtained a PPP Loan filed an application for forgiveness of such PPP Loan, the contents of which were true, complete and correct in all respects and have been provided to Purchaser, and except as set forth in Section 4.27 of the Company Disclosure Letter (the “Outstanding PPP Loan”), each PPP Loan has been forgiven.

(b)The PPP Lender has not requested additional documentation or other information with respect to the PPP Forgiveness Application for the Outstanding PPP Loan. To the Knowledge of the Company, there is no fact or condition that could reasonably be expected to result in the application for forgiveness of the Outstanding PPP Loan to be withdrawn by the borrower or rejected for forgiveness (or deemed to be ineligible for forgiveness) by the PPP Lender or the Small Business Administration. Without limiting the foregoing, and except as set forth in Section 4.27 of the Company Disclosure Letter, no consent is required to be obtained from the PPP Lender, the Small Business Administration or any other Governmental Authority with respect to the Outstanding PPP Loan in connection with the consummation of the transactions contemplated hereunder, and no default, event of default or similar condition that gives the PPP Lender or the Small Business Administration the right to accelerate the Outstanding PPP Loan or reject the eligibility of all or a portion of the Outstanding PPP Loan for forgiveness will occur as a result of the consummation of the transactions contemplated hereunder.

4.28Excluded Entities. Except as set forth in Section 4.28 of the Company Disclosure Letter, none of the Excluded Entities are currently part of the Business or contributing to the Business, or engaged in a Competitive Business or providing Competitive Services to any Person.

4.29Seller Parties Legal Matters. There has been no written notice of any Claim pending against, or, to the Knowledge of the Company, threatened against or affecting, any Seller Party or any Seller Party’s properties or rights, at law or in equity, before or by any court, arbitrator, panel or other Governmental Authority except as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of such Seller Party to perform their obligations hereunder or under any Transaction Document.

4.30Stock Consideration for Investment. Seller is an “accredited investor” as that term is defined in Rule 501 under the Securities Act. The Stock Consideration will be acquired by Seller for his own account for the purpose of investment and not with a view to the resale or distribution of all or any part of the Stock Consideration in violation of the Securities Act, it being understood that the right to dispose of any Stock Consideration received by Seller shall be entirely within the discretion of the Seller.

4.31No Additional Representations. The representations and warranties expressly set forth in this Agreement are the exclusive representations and warranties made by Seller Parties and Acquired Companies and each of the Seller Parties and the Acquired Companies disclaims all

liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Parent, Purchaser, their respective Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Parent or Purchaser by any Representative of the Acquired Companies) other than the representations and warranties expressly set forth in this Agreement. Without limiting the foregoing, other than as expressly set forth in this Agreement, the Seller Parties and the Acquired Companies specifically disclaims any representations or warranties of any kind or nature, express or implied, concerning any pro-forma or future revenues, costs, expenditures, cash flow, results of operations, collectability of accounts receivable, financial condition or prospects of the Acquired Companies or that may result from the ownership or operation of the Acquired Companies businesses or the acquisition of the Transferred Equity.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER

Except as expressly set forth (i) in the reports, schedules, forms, statements and other documents filed by Parent with the SEC since December 9, 2010 (the “Parent SEC Report Date”) and publicly available prior to the date of this Agreement (such reports, schedules, forms, statements and other documents, the “Parent SEC Reports”) (excluding any risk factor disclosure and disclosure of risks included in any “forward-looking statements” disclaimer or other statements included in such Parent SEC Reports to the extent that they are predictive or forward-looking in nature and excluding any general disclosure which does not make express reference to a specific or discrete event, fact, Liability or Contract), or (ii) in the Parent Disclosure Letter; provided that, (x) any facts, items or exceptions disclosed in any section of the Parent Disclosure Letter shall be deemed to be disclosed on another section of the Parent Disclosure Letter if the applicability of such fact, item or exception to such other section would be reasonably apparent and (y) any listing of any fact, item or exception in any section of the Purchaser Disclosure Letter shall not be construed as an admission of liability under any applicable Law or for any other purpose and shall not be construed as an admission that such fact, item or exception is in fact material or create a measure of materiality for purposes of this Agreement or otherwise, each of Parent and the Purchaser hereby jointly and severally represents and warrants to the Seller Parties and Acquired Companies as follows:

5.1Organization.

(a)Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland. The Purchaser is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. Each of Parent and Purchaser has full power and authority to carry on its respective business as conducted by it and to own, lease or license, and operate the properties and assets it now owns or holds and operates.

(b)Each of Parent and Purchaser is duly qualified to do business and is in good standing as a foreign entity in all jurisdictions where the nature of the property owned, leased or licensed by it or its use, or the nature or conduct of its business, makes such qualification necessary and where the absence of such qualification would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Parent or Purchaser, respectively.

5.2Authorization.

(a)Each of Parent and the Purchaser has full right, power, capacity and authority to execute and deliver this Agreement and each of the Transaction Documents to be executed and delivered by such entity and to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof.

(b)The execution, delivery and performance by each of Parent and the Purchaser of this Agreement and each of the Transaction Documents to which such entity is a party have been duly and properly authorized by all requisite action (including the approval of the Parent Board) in accordance with applicable Law and with the Organizational Documents of such entities.

(c)This Agreement has been duly executed and delivered by each of Parent and the Purchaser and constitutes the legal, valid and binding obligation each of Parent and the Purchaser, enforceable against such entity in accordance with its terms, subject to the Enforceability Exceptions. Each of the Transaction Documents to be executed and delivered by or on behalf of Parent or the Purchaser will be duly executed and delivered by Parent or the Purchaser, as applicable, and, when so executed and delivered, will constitute the legal, valid and binding obligation of Parent or the Purchaser, as applicable, enforceable against the applicable entity in accordance with its terms, subject to the Enforceability Exceptions.

5.3Approvals; No Conflicts.

(a)No authorization, consent, order, license, permit or approval of, filing or registration with, or notice to, any Governmental Authority or other Person is required for the consummation by Parent or the Purchaser of the transactions contemplated hereby, except (i) in connection, or in compliance, with the notification and waiting period requirements of the HSR Act, (ii) such reports under the Exchange Act as may be required in connection with this Agreement and the transactions contemplated by this Agreement, in accordance with the Exchange Act, (iii) the filing of a Form D with the SEC, (iv) such filings, consents, approvals, orders and authorizations as may be required by state securities (or “blue sky”) laws and the securities laws of any foreign country and (v) as set forth in Section 5.3(a) of the Parent Disclosure Letter, except in each case where such authorizations, consents, orders, licenses, permits, approvals, filings or registrations or notices would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Parent or a material adverse effect on the ability of Parent or the Purchaser to perform its obligations hereunder or under any Transaction Document.

(b)Except as set forth in Section 5.3(b) of the Parent Disclosure Letter, neither the execution and delivery of this Agreement and the Transaction Documents to which such entity is a party by Parent or the Purchaser nor the performance by Parent or the Purchaser of the transactions contemplated hereby or thereby will (i) violate or conflict with, or result in a breach of, any of the terms, conditions or provisions of the Organizational Documents of Parent or the Purchaser, as applicable, (ii) violate or conflict with or result in a breach of any Law in any material respect, or (iii) constitute or result in the material breach of any provision of, or constitute a default under, any Parent Contract, except, in the case of (ii) and (iii) as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Parent or a material

adverse effect on the ability of Parent or the Purchaser to perform its obligations hereunder or under any Transaction Document.

5.4Capitalization. The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock and 50,000,000 shares of Parent Preferred Stock. As of the date of this Agreement, (a) 31,959,111 shares of Parent Common Stock were issued and outstanding, all of which were duly authorized and validly issued and are fully paid and non-assessable, (b) no shares of Parent Preferred Stock are outstanding and (c) no shares of Parent Common Stock or Parent Preferred Stock are held in the treasury of Parent. As of the date hereof, (x) Parent Options to purchase 234,606 shares of Parent Common Stock were outstanding and (y) 780,578 shares of Parent Restricted Stock were outstanding (and are included in the amount set forth in clause (a) above). Except as set forth in the preceding sentence or in Section 5.4 of the Parent Disclosure Letter, there are no options, stock appreciation rights, voting securities, warrants or other rights, contracts, arrangements, or commitments of any character relating to the issued or unissued capital stock of Parent, or obligating Parent or any of its Subsidiaries to issue, grant, or sell any shares of capital stock of, or other equity interests in, or securities convertible into equity interests in Parent. Each outstanding share of capital stock of Parent is duly authorized, validly issued, fully paid, and non-assessable.

5.5Parent SEC Documents. Parent has filed all forms, reports and documents required to be filed by it with the SEC since the Parent SEC Report Date. Each of the forms, reports, registration statements, and other documents filed by Parent with the SEC since the Parent SEC Report Date (such forms, reports, registration statements, and other documents, whether or not available through EDGAR, are collectively referred to herein as the “Parent SEC Reports”) and the certifications and statements required by Rules 13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act (i) as of the date of the filing thereof, complied with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, as the case may be, including in each case the rules and regulations thereunder, with each such Parent SEC Report having been filed on a timely basis within the time period it was required to be filed with the SEC pursuant to the reporting requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act, as applicable, and (ii) as of its filing date (or, if amended or superseded by a subsequent filing prior to the date hereof, on the date of such filing) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Parent is, and since the Parent SEC Report Date has been, in compliance in all material respects with (x) the applicable listing and corporate governance rules and regulations of the NYSE, and (y) the applicable provisions of the Sarbanes-Oxley Act. Since the Parent SEC Report Date, neither Parent nor any of its Subsidiaries has received from the SEC or any other Governmental Entity any written comments or questions with respect to any of the Parent SEC Reports (including the financial statements included therein) that are not resolved, or, as of the date hereof, has received any written notice from the SEC or other Governmental Entity that such Parent SEC Reports (including the financial statements included therein) are being reviewed or investigated, and, to Parent’s Knowledge, there is not, as of the date hereof, any investigation or review being conducted by the SEC or any other Governmental Entity of any Parent SEC Reports (including the financial statements included therein).

5.6Financial Statements; Internal Controls and Procedures. (a) The financial statements (including any notes and schedules thereto) contained or incorporated by reference in the Parent SEC Reports complied with the rules and regulations of the SEC as of the date of the filing of such reports, were prepared in accordance with GAAP, consistently applied, and fairly presented, in all materials respects, the financial condition and the results of operations, changes in stockholders’ equity and cash flows of Parent and its Subsidiaries as of the respective dates of and for the periods referred to in such financial statements, subject, in the case of interim financial statements, to (i) the omission of notes to the extent permitted by SEC Regulation S-X and (ii) normal year-end adjustments otherwise required by GAAP, which will not be material, individually or in the aggregate.

(b)Parent is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended. Each required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by any certifications required to be filed or submitted by Parent’s principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act. Neither Parent nor, to the Knowledge of Parent, any of its executive officers has received written notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.

(c)Parent has established and maintains, and at all times since Parent SEC Report Date has maintained, disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Parent’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by Parent in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Parent’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act

5.7Conduct of Business. Except as set forth in Section 5.7 of the Parent Disclosure Letter, from August 5, 2021 to the date hereof, no events have occurred that have had or would reasonably be expected to have, in the aggregate, a Material Adverse Effect on Parent, except as disclosed in the Parent SEC Reports.

5.8Financing; Stock Consideration. At Closing, Purchaser will have sufficient available cash to pay the amounts required to be paid, and Parent will have duly reserved sufficient shares of Parent Common Stock to be issued the Seller pursuant to this Agreement. The shares of Parent Common Stock to be issued as the Stock Consideration will, when issued in accordance with the provisions of this Agreement, be duly authorized, validly issued, fully paid and non-assessable.

5.9Litigation. There are no Claims pending or, to Parent’s Knowledge, threatened against Parent, or against any asset, interest or right of Parent, that would be required to be disclosed in a Form 10-K or Form 10-Q pursuant to Item 103 of Regulation S-K of the SEC’s rules and regulations that are not so disclosed or that challenge or seek to prevent, enjoin, alter or delay the transactions contemplated by this Agreement.

5.10Compliance with Laws. Since January 1, 2019, each of Parent and its Subsidiaries has complied in all material respects with all applicable Laws in connection with the conduct of its businesses or the ownership or operation of its businesses, assets and properties, except for immaterial noncompliance or violations as, individually or in the aggregate, do not have, and would not be reasonably likely to have, a Material Adverse Effect on Parent.

5.11Contracts.

(a)Each contract, arrangement, commitment or understanding (whether written or oral) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to which Parent or any of its Subsidiaries is a party or by which Parent or any of its Subsidiaries is bound as of the date hereof has been filed as an exhibit to the most recent Annual Report on Form 10-K filed by Parent, or a Quarterly Report on Form 10-Q or Current Report on Form 8-K subsequent thereto (each, a “Parent Contract”).

(b)Parent and each of its Subsidiaries has performed all obligations required to be performed by it to date under each Parent Contract, except where such noncompliance either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent. To Parent’s Knowledge, each third-party counterparty to each Parent Contract has performed all obligations required to be performed by it to date under such Parent Contract, and no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a default on the part of Parent or any of its Subsidiaries under any such Parent Contract, except where such default, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Parent.

5.12Investment Purposes. Purchaser is an “accredited investor” as that term is defined in Rule 501 under the Securities Act. The Transferred Equity will be acquired by the Purchaser for its own account for the purpose of investment and not with a view to the resale or distribution of all or any part of the Transferred Equity in violation of the Securities Act, it being understood that the right to dispose of such Transferred Equity shall be entirely within the discretion of the Purchaser.

5.13Brokers’ or Finders’ Fees. Except as set forth on Section 5.13 of the Parent Disclosure Letter, no agent, broker, investment banker or other Person acting on behalf, or under the authority, of Parent or Purchaser is or will be entitled to any brokers’ or finders’ fee or any other commission or similar fee directly or indirectly from any of the Parties in connection with any of the transactions contemplated hereby.

5.14Private Placement and Offerings. Assuming the accuracy of the representations and warranties set forth in Section 4.30:

(a)no registration under the Securities Act is required for the offer and sale of the Parent Common Stock to Seller as contemplated hereby. The issuance and sale of the Parent Common Stock hereunder does not contravene the rules and regulations of the NYSE; and

(b)neither Parent, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Parent Common Stock to be integrated with prior offerings by Parent for purposes of the Securities Act which would require the registration of any such securities under the Securities Act, or any applicable stockholder approval provisions of the NYSE or any other trading market on which any of the securities of Parent are listed or designated.

5.15No Other Representation. Except as set forth in this Article 5, neither Parent nor Purchaser makes no other representations or warranties, express or implied, including warranties of merchantability or fitness for a particular purpose, representations or warranties contained in or arising from any confidential selling memorandum or similar documents concerning Parent or its Subsidiaries or their respective businesses, assets, financial condition, prospects or otherwise.

5.16No Reliance. Each of Parent and Purchaser acknowledge and agree that it has conducted its own independent review and analysis of the Acquired Companies and the assets, condition, operations and prospects of the Acquired Companies. In entering into this Agreement, Parent and Purchaser: (a) acknowledge that, other than as expressly set forth in this Agreement, none of the Seller Parties, any Acquired Company, nor any of their respective Affiliates, Representatives makes or has made any representation or warranty, either express or implied, (i) as to the accuracy or completeness of any of the information provided or made available Parent, Purchaser or their respective Representatives prior to the execution of this Agreement, including any presentation to the Parent, Purchaser or their respective Representatives by management of the Seller Parties or the Acquired Companies or materials furnished in the on-line data site prepared by the Acquired Companies or other due diligence information provided to Parent, Purchaser or their respective Representatives or (ii) with respect to any projections, forecasts, estimates, plans or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of the Acquired Companies; (b) agrees, to the fullest extent permitted by Law, that none of Seller Parties, the Acquired Companies, nor any of their respective Representatives shall have any direct personal liability or responsibility whatsoever to Purchaser or its Affiliates on any basis (including contract, tort, or otherwise) based upon any information provided or made available, or statements made, to Purchaser prior to the execution of this Agreement, including any presentation to Parent, Purchaser or their respective Representatives by management of the Acquired Companies or materials furnished in the on-line data site prepared by the Acquired Companies or other due diligence information provided to Purchaser or its Representatives.

ARTICLE 6

OTHER AGREEMENTS AND COVENANTS

6.1Conduct of Business.

(a)From the date hereof through the earlier of the termination of this Agreement or the Closing Date (the “Pre-Closing Period”), except as permitted by this Agreement or as set forth on Section 6.1(a) to the Company Disclosure Letter, the Acquired Companies shall, and the Seller Parties shall cause the Acquired Companies to, conduct their respective businesses only in the Ordinary Course. Without limiting the generality of the foregoing, during the Pre-Closing Period, except as permitted by this Agreement or as set forth on Section 6.1(a) to the Company Disclosure Letter, each Acquired Company shall (i) maintain its existence in good standing, (ii) maintain the general character of its businesses and conduct its businesses in a commercially reasonable manner, (iii) maintain proper business and accounting records relative to its businesses, (iv) use commercially reasonable efforts to preserve relationships with customers, suppliers, investors and insurers, (v) use commercially reasonable efforts to maintain its assets in good condition and repair, ordinary wear and tear excepted, (vi) maintain presently existing insurance coverage with respect to its businesses and (vii) pay its debts, Taxes and other obligations when due.

(b)Without limiting the generality of the foregoing, during the Pre-Closing Period, except as permitted by this Agreement or as set forth on Section 6.1(b) to the Company Disclosure Letter, the Acquired Companies shall not, and the Seller Parties shall cause the Acquired Companies not to, without the prior written consent of Parent (not to be unreasonably withheld, delayed or conditioned) do any of the following:

(i)enter into any Company Material Agreement or terminate or amend or modify in any material respect any existing Company Material Agreement other than in the Ordinary Course;

(ii)(a) enter into, adopt, contribute to, or become obligated to contribute to, any Employee Benefit Plan or any other benefit plan, policy, program, arrangement or agreement of any kind, or (b) enter into any collective bargaining agreement or other similar agreement, (c) grant to any of their current or former employees, officers, directors, independent contractors or consultants with total compensation in the prior year in excess of $200,000 per year any increase in compensation, (d) cause or institute any plant closing or mass layoff as defined by WARN, (e) act to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant of any Acquired Company, or (f) hire, promote or terminate the employment of any current or former officer, manager or employee of any Acquired Company that had or would reasonably would be expected to have total compensation in excess of $200,000 per year;

(iii)sell, transfer, assign or otherwise dispose of or encumber any of its assets in one transaction or a series of related transactions having a value in excess of $100,000 except in the Ordinary Course;

(iv)cancel any debt owed to an Acquired Company or, other than in the Ordinary Course, waive or compromise any claim or right in one transaction or a series of related transactions;

(v)make any capital expenditure or commitment relating to its businesses in excess of $50,000 individually, or $250,000 in the aggregate, other than expenditures necessary to maintain in good repair existing assets;

(vi)except in the Ordinary Course with respect to the Warehouse Lines, incur, assume or guarantee any Indebtedness other than Indebtedness that will be repaid at or prior to the Closing Date;

(vii)amend or modify in any manner the Assumed Indebtedness;

(viii)other than in the Ordinary Course, issue, sell or agree to issue or sell (a) any shares of the equity securities of any Acquired Company or (b) any securities convertible into, or options with respect to, or warrants to purchase or rights to subscribe for, any equity securities of any Acquired Company;

(ix)other than in the Ordinary Course, declare, set aside or pay any dividend or distribute any noncash property or securities in respect of its capital stock, or purchase, redeem or otherwise acquire any shares of its capital stock or other securities;

(x)purchase any material assets or securities of any Person or enter into any material joint venture, partnership or other similar arrangement, in each case other than in the Ordinary Course;

(xi)terminate, cancel or amend any insurance coverage maintained by any Seller Party or any Acquired Company with respect to the assets or activities of the Acquired Company’s business which is not replaced by an adequate amount of insurance coverage at reasonable cost;

(xii)merge or consolidate with or into any other Person or permit any other Person to merge or consolidate with or into it; or

(xiii)make, revoke or change any Tax elections, adopt or change any Tax accounting method, enter into any closing agreement with respect to Taxes, waive any statute of limitation in respect of Taxes, agree to any extension of time with respect to a Tax assessment or deficiency, surrender any right to claim a refund, offset or other reduction in Tax liability, settle or compromise any Tax liability, take or omit to take any action which could reasonably be expected to affect the Tax liability of Purchaser, Parent, the Acquired Companies or any of their respective Affiliates for any taxable period ending after the Closing Date, or otherwise take any action outside the ordinary course of business with respect to Tax matters.

(c)Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct an Acquired Company’s operations prior to the Effective

Time. Prior to the Effective Time, the Acquired Companies shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective business, assets and operations.

(d)From the date hereof through the Pre-Closing Period, except as permitted by this Agreement or as set forth on Section 6.1(d) to the Parent Disclosure Letter, Parent shall, and Parent shall cause Purchaser to, conduct their respective businesses only in the Ordinary Course.

6.2Confidentiality. From and after the Closing, Seller Parties shall, and shall cause their respective Affiliates to, hold, and shall use its reasonable best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Acquired Companies, except to the extent that Seller Parties can show that such information (a) is generally available to and known by the public through no fault of Seller Parties, any of their Affiliates or their respective Representatives; (b) is lawfully acquired by Seller Parties, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation; (c) was developed entirely by such Seller Parties without reference to any confidential or proprietary information of the Acquired Companies or the Non-Controlled Entities; or (d) is used as expressly permitted pursuant to the terms and conditions of Seller’s employment with Purchaser or its Affiliates solely during the term of such employment. If a Seller Party or any of its Affiliates or their respective Representatives are compelled to disclose any information by judicial or administrative process or by other requirements of Law, Seller Parties shall promptly notify Purchaser in writing and shall disclose only that portion of such information which Seller Parties are advised by its counsel in writing is legally required to be disclosed, provided that Seller Parties shall use reasonable best efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such information.

6.3Access; Books and Records.

(a)During the Pre-Closing Period, Purchaser will have the right to conduct, during normal business hours and upon reasonable prior notice, such inspections as it may reasonably require for purposes of obtaining requisite Consents and Governmental Approvals, monitoring the business and affairs of the Acquired Companies and otherwise completing the transactions contemplated hereby with respect to the Acquired Companies and their respective businesses, including all operational, legal, regulatory and financial matters relating to the Acquired Companies and their respective businesses. During the Pre-Closing Period, the Acquired Companies shall permit Purchaser and its representatives to (i) inspect all of the foregoing, (ii) have reasonable access to the officers and employees of the Acquired Companies with the prior written consent of the Seller Parties (which discussions shall not be deemed by any Acquired Company to be a violation of any confidentiality agreement) and (iii) request additional information concerning all of the foregoing, and the Acquired Companies will, and will use commercially reasonable efforts to cause such officers, employees and other Persons to, reasonably cooperate with such inspections, and promptly respond to any requests for additional information.

(b)In order to facilitate the resolution of any Claims made by or against or incurred by Parent, Purchaser or the Acquired Company after the Closing, or for any other reasonable purpose, for a period of six (6) years following the Closing, each Seller Party shall:

(i)retain the books and records (including personnel files) of such Seller Party which relate to the Acquired Companies and its operations for periods prior to the Closing;

(ii)upon reasonable notice, afford the Representatives of Purchaser or the Acquired Companies reasonable access (including the right to make, at Purchaser’s expense, photocopies), during normal business hours, to such books and records;

provided, however, that any books and records related to Tax matters shall be retained pursuant to the periods set forth in Section 6.7.

(c)All of the requirements of this Section 6.3 shall be subject to any restrictions which the Acquired Companies reasonably believe upon the advice of outside counsel are necessary to preserve the attorney-client privilege of the Acquired Companies.

6.4No Solicitation of Other Bids.

(a)No Seller Party shall, and no Seller Party shall authorize or permit any of its Affiliates (including any Acquired Company) or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an Acquisition Proposal. Each Seller Party shall immediately cease and cause to be terminated, and shall cause its Affiliates (including any Acquired Company) and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal.

(b)In addition to the other obligations under this Section 6.4, each Seller Party shall promptly (and in any event within three (3) Business Days after receipt thereof by any Seller Party or their Representatives) advise Parent orally and in writing of any Acquisition Proposal, any request for information with respect to any Acquisition Proposal, or any inquiry with respect to or which could reasonably be expected to result in an Acquisition Proposal, the material terms and conditions of such request, Acquisition Proposal or inquiry, and the identity of the Person making the same.

(c)Each Seller Party agrees that the rights and remedies for noncompliance with this Section 6.4 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach shall cause irreparable injury to Parent and Purchaser and that money damages would not provide an adequate remedy to Parent or Purchaser.

6.5Government Approvals and Consents.

(a)Each Party hereto shall, as promptly as possible, but in no event later than fifteen (15) Business Days following the execution and delivery of this Agreement, (i) make, or cause or be made, all filings and submissions (including those under the HSR Act) required under any Law applicable to such Party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement and the Transaction Documents (collectively, the “Governmental Approvals”). Each Party shall cooperate fully with the other Party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The Purchaser shall be responsible for all filing fees payable in connection with the filings described in clause (i) of the first sentence of this Section 6.5(a), and the Seller Parties shall be responsible for all filing fees payable in connection with the filings described in clause (ii) of the first sentence of this Section 6.5(a).

(b)The Seller Parties, Parent and Purchaser shall use reasonable best efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 4.4 and Section 5.3(b) of the Company Disclosure Letter and Schedule C.

(c)Without limiting the generality of the Parties’ undertakings pursuant to subsections (a) and (b) above, each of the parties hereto shall use all reasonable best efforts to:

(i)respond to any inquiries by any Governmental Authority regarding antitrust or other matters with respect to the transactions contemplated by this Agreement or the Transaction Agreements;

(ii)avoid the imposition of any order or the taking of any action that would restrain, alter or enjoin the transactions contemplated by this Agreement or the Transaction Agreements;

(iii)in the event any Governmental Order adversely affecting the ability of the parties to consummate the transactions contemplated by this Agreement or the Transaction Agreements has been issued, to have such Governmental Order vacated or lifted.

(d)If any consent, approval or authorization necessary to preserve any right or benefit under any Company Agreement is not obtained prior to the Closing, the Seller Parties shall, subsequent to the Closing, cooperate with Parent, Purchaser and the Acquired Companies in attempting to obtain such consent, approval or authorization as promptly thereafter as practicable. If such consent, approval or authorization cannot be obtained, each Seller Party shall use its reasonable best efforts, consistent with applicable Law, to provide the applicable Acquired Company with the rights and benefits of the affected Company Agreement for the term thereof, and, if each Seller Party provides such rights and benefits, the applicable Acquired Company shall assume all obligations and burdens thereunder.

(e)All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of any Party before

any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between the Seller Parties or an Acquired Company with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing confidential information) shall be disclosed to the other Parties hereunder in advance of any filing, submission or attendance, it being the intent that the Parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each Party shall give notice to the other Parties with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such notice being sufficient to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

(f)Notwithstanding the foregoing, nothing in this Section 6.5 shall require, or be construed to require, Parent or any of its Affiliates to agree to (i) sell, hold, divest, discontinue or limit, before or after the Closing Date, any assets, businesses or interests of Parent, any Acquired Company or any of their respective Affiliates; (ii) any conditions relating to, or changes or restrictions in, the operations of any such assets, businesses or interests; or (iii) any material modification or waiver of the terms and conditions of this Agreement.

6.6Notices of Certain Events.

(a)During the Pre-Closing Period, each Seller Party and the Acquired Companies shall promptly notify Purchaser of any of the following which occur during the Pre-Closing Period or are received during the Pre-Closing Period by such Seller Party or Acquired Company:

(i)any notice or other communication of which such Seller Party or the Acquired Company has Knowledge, from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(ii)any notice or other communication of which such Seller Party or the Acquired Company has Knowledge, from any Governmental Authority delivered in connection with the transactions contemplated by this Agreement;

(iii)any actions, suits, Claims, investigations or proceedings commenced or, to the Company’s Knowledge, threatened against, relating to or involving or otherwise affecting the Acquired Company, that relate to the consummation of the transactions contemplated by this Agreement;

(iv)any denial or dispute of any material claim for coverage under any Insurance Policy where the claimed amount would reasonably be expected to exceed the self-insured retention or deductible;

(v)any notice of cancellation or intent to cancel or increase or intent to materially increase premiums with respect to the Insurance Policies;

(vi)any inaccuracy in or breach of any representation, warranty or covenant of the Seller Parties or an Acquired Company or any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Sections 7.1 and 7.2 impossible or not reasonably likely to be satisfied; and

(vii)any entry of any Acquired Company into, or amendment by an Acquired Company of, any Affiliate Transactions.

No such notice shall constitute a waiver or otherwise be deemed to supplement or amend the Company Disclosure Letter for the purpose of (i) determining the accuracy of any of the representations and warranties made by the Seller Parties or the Acquired Companies in this Agreement, or (ii) determining whether any of the conditions set forth in Article 7 (other than the condition set forth in Section 7.2(b) as to compliance with this Section 6.6(a)) has been satisfied; provided, however, that if that if Purchaser has the right to, but does not elect to, terminate this Agreement within fifteen (15) Business Days of its receipt of such notice, then Purchaser shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such matter and, further, shall have irrevocably waived its right to indemnification under Section 9.1 with respect to such matter.

(b)During the Pre-Closing Period, Purchaser shall promptly notify the Seller Parties of any of the following which occur during the Pre-Closing Period or are received during the Pre-Closing Period by Parent or Purchaser:

(i)any notice or other communication of which Parent has Knowledge from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(ii)any notice or other communication of which Parent has Knowledge from any Governmental Authority delivered in connection with the transactions contemplated by this Agreement;

(iii)any actions, suits, Claims, investigations or proceedings commenced or, to Parent’s Knowledge, threatened against, relating to or involving or otherwise affecting Parent, that relate to the consummation of the transactions contemplated by this Agreement;

(iv)any inaccuracy in or breach of any representation, warranty or covenant of Parent or any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Sections 7.1 and 7.3 impossible or not reasonably likely to be satisfied.

No such notice shall constitute a waiver or otherwise be deemed to supplement or amend the Parent Disclosure Letter for the purpose of (i) determining the accuracy of any of the representations and warranties made by Parent or Purchaser in this Agreement, or (ii) determining whether any of the

conditions set forth in Article 7 (other than the condition set forth in Section 7.3(b) as to compliance with this Section 6.6(b)) has been satisfied; provided, however, that if that if the Seller Parties have the right to, but do not elect to, terminate this Agreement within fifteen (15) Business Days of their receipt of such notice, then the Seller Parties shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such matter and, further, shall have irrevocably waived their right to indemnification under Section 9.2 with respect to such matter.

6.7Tax Matters.

(a)Tax Returns. Except as provided in Section 6.7(b), the Seller Parties shall, at their cost and expense, prepare, or cause to be prepared, and file, or cause to be filed, all Tax Returns that are required to be filed with respect to any Acquired Company for any taxable period ending on or prior to the Closing Date, and shall fully and timely pay (or cause to be so paid) any Taxes due in connection therewith.

(b)Straddle Period. Parent, at its sole cost and expense, shall prepare, or cause to be prepared, and file, or cause to be filed, all Tax Returns that are required to be filed with respect to the Acquired Companies for any Straddle Period (“Straddle Period Tax Returns”). For purposes of this Agreement, with respect to any non-income Taxes for a Straddle Period that are imposed on a periodic basis (including ad valorem, real property and personal property taxes), (i) the portion of such Taxes attributable to the portion of the taxable period ending on the Closing Date shall be determined by multiplying the entire Tax for the Straddle Period by a fraction, the numerator of which is the number of days in the portion of the Straddle Period ending on the Closing Date and the denominator of which is the number of days in the Straddle Period, and (ii) the portion of such Taxes attributable to the portion of the Straddle Period beginning after the Closing Date shall be determined by multiplying the entire Tax for the Straddle Period by a fraction, the numerator of which is the number of days in the portion of the Straddle Period beginning the day after the Closing Date and ending on the last date of the Straddle Period and the denominator of which is the number of days in the Straddle Period. All other Taxes for a Straddle Period shall be apportioned on a closing of the books basis as of the end of the Closing Date.

(c)Cooperation on Tax Matters.

(i)From and after the Closing Date, Parent and the Seller Parties shall, and shall cause their respective Affiliates to, cooperate fully, as and to the extent reasonably requested by the other Parties, in connection with the preparation of any Return, audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the request of another Party) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.

(ii)Parent and the Seller Parties further agree, to use commercially reasonable efforts, upon reasonable request by another Party, to attempt to obtain any certificate or other document from any Tax Authority or any other Person as may be necessary to

mitigate, reduce or eliminate any Tax that could be imposed (including without limitation any Tax with respect to the transactions contemplated hereby).

(iii)For each Acquired Company that is properly classified as a partnership for U.S. federal income tax purposes (the “Partnership Companies”), for each taxable period beginning after December 31, 2017 and ending on or before the Closing Date, to the extent applicable, the relevant Seller Parties shall cause such Partnership Company to timely elect pursuant to Section 6226 of the Code to have any partnership adjustments (within the meaning of Section 6241(2) of the Code) determined with respect to such Partnership Company passed through to relevant Seller Parties or their predecessors-in-interest during the reviewed year (within the meaning of Section 6225(d)(1) of the Code). For any taxable period beginning before January 1, 2018, the Partnership Companies shall not, and the relevant Seller Parties shall cause the Partnership Companies to not, elect to apply the partnership audit procedures described in the Bipartisan Budget Act of 2015. Seller Parties shall cause each Partnership Company to use commercially reasonable efforts to accurately maintain a record of physical and electronic mailing addresses and telephone numbers in order to qualify for making the election described in Section 6226.

(iv)Purchaser and Seller Parties hereby agree to make valid elections under Section 754 of the Code on all Upper Tier Fund and Lower Tier Partnership Tax Returns for the tax year that includes the Closing Date.

(d)Transfer Taxes. All sales, transfer, documentary, registration and other similar such Taxes (including, without limitation, charges for or in connection with the recording of any instrument or document as provided in this Agreement, but excluding any Taxes that are based on or measured by income or gain) (“Transfer Taxes”) payable in connection with the transactions contemplated by this Agreement shall be timely paid 50% by Purchaser and 50% by the Seller Parties. Purchaser shall prepare, or cause to be prepared, and file, or cause to be filed, all Tax Returns that are required to be filed with respect to the Acquired Companies with respect to Transfer Taxes payable in connection with the transactions contemplated by this Agreement, and to the extent required by applicable Law Seller Parties shall join in the execution of such Tax Returns. Purchaser and the Seller Parties shall each cooperate in providing the other with all information reasonably required by such party in connection with the preparation and filing of such Tax Returns.

(e)Tax Treatment. The Parties agree that for U.S. federal income tax purposes the transactions contemplated hereby constitute a sale of the Transferred Equity to Purchaser, a purchase of partnership interests in Alliant Strategic by Purchaser, a purchase of all of the Acquired Company’s assets by Purchaser with respect to any other Partnership Company, in accordance with IRS Revenue Ruling 99-6, and as a purchase and sale of the assets of any Acquired Company that is classified as a disregarded entity for U.S. federal income tax purposes.

(f)Allocation of Seller Consideration. The Parties agree that the Seller Consideration and the applicable assumed liabilities (plus other relevant items) shall be allocated among all of the assets of the Acquired Companies for all tax purposes as shown on the allocation schedule (the “Allocation Schedule”). A draft of the Allocation Schedule shall be prepared by

Purchaser and delivered to the Seller Parties within 120 days following the Closing Date. If the Seller Parties notify the Purchaser in writing that the Seller Parties object to one or more items reflected in the Allocation Schedule, the Seller Parties and the Purchaser shall negotiate in good faith to resolve such dispute; provided, however, that if the Seller Parties and Purchaser are unable to resolve any dispute with respect to the Allocation Schedule within 150 days following the Closing Date, such dispute shall be referred to and resolved by the Accounting Firm. The Accounting Firm shall make a determination with respect to each dispute within a reasonable time after such reference, and shall deliver to Purchaser and the Seller Parties a report setting forth its adjustments, if any, to the draft Allocation Schedule and the calculations supporting such adjustments, it being understood that any such adjustments to the draft Allocation Schedule shall be only within the range of the amounts proposed by each of Purchaser and the Seller Parties. The scope of the disputes to be resolved by the Accounting Firm shall be limited to the unresolved disputed items, and the Accounting Firm is not to make any other determination. Any determinations by the Accounting Firm, and any work or analyses performed by the Accounting Firm, in connection with its resolution of any dispute under this Section 6.7(f) shall not be admissible in evidence in any suit, action or proceeding between the parties, other than to the extent necessary to enforce payment obligations under this Section 6.7(f). Purchaser and the Seller Parties shall each pay one-half of all the costs incurred in connection with the engagement of the Accounting Firm. Purchaser agrees to act, and each Seller Party agrees to act, in accordance with the Allocation Schedule as finally determined in accordance with the foregoing for all Tax purposes, including with respect to any forms or reports (including IRS Form 8594) required to be filed pursuant to Section 1060 of the Code, the Treasury Regulations promulgated thereunder or any other applicable provisions of Law, and to cooperate in the preparation of any such forms or reports and to timely file such forms or reports in the manner required by applicable Law. Purchaser shall not take, and each Seller Party shall not take, any position that is inconsistent with the Allocation Schedule in any communication (whether written or unwritten) with any Tax Authority, except as otherwise required by Law. Any adjustments to the Seller Consideration pursuant to Section 2.3 hereof shall be allocated in a manner consistent with the Allocation Schedule.

(g)Tax Sharing Agreements. All Tax Sharing Agreements with respect to or involving the Acquired Companies shall be terminated as of the Closing Date and, after the Closing Date, none of the Acquired Companies, Parent, the Purchaser or any of their respective Affiliates shall be bound thereby or have any liability thereunder.

(h)Tax Actions. Notwithstanding anything to the contrary, without the consent of the Seller Parties (not to be unreasonably withheld, conditioned or delayed), the Parent and the Purchaser shall not, and shall cause their Affiliates (including, after the Closing, the Acquired Companies) not to, in each case to the extent that taking such action would reasonably be expected to have a direct material adverse financial effect on the Seller Parties: (i) make, change or revoke any Tax election with respect to the Acquired Companies that has retroactive effect to a taxable period (or portion thereof) ending on or before the Closing Date, including, but not limited to, any election under Section 338 of the Code; (ii) except as provided in Section 6.7(b), file any Tax Return with respect to the Acquired Companies for any tax taxable period (or portion thereof) ending on or prior to the Closing Date; (iii) amend any Tax Return with respect to the Acquired Companies for any taxable period (or portion thereof) ending on or before the Closing Date; (iv)

initiate voluntary contact (including through any voluntary disclosure program) with any Tax Authority in respect of Taxes or Tax Returns of the Acquired Companies for any taxable period (or portion thereof) that ends on or before the Closing Date; or (v) extend or waive any statute of limitations with respect to any Taxes of any Acquired Companies for any taxable period or portion thereof ending on or prior to the Closing Date.

6.8Interim Financial Statements and Statement of Net Debt.

(a)When available, but no later than the twentieth (20^th) day after the last day of the prior month (the “Prior Month End”) ending during the Pre-Closing Period, the Seller Parties shall provide Purchaser with a copy of the following (in each case as of the Prior Month End), the unaudited balance sheet of each Acquired Company as of the Prior Month End and the related statement of income for the month then ended (the “Monthly Financial Statements”), including the Acquired Companies’ good faith calculation of each of the Company Working Capital and the Acquired Companies’ Indebtedness as of the Prior Month End.

(b)Within forty-five (45) days following the end of each fiscal quarter that ends during the Pre-Closing Period, the Seller Parties shall provide Purchaser with a copy of the unaudited consolidated balance sheets of the Acquired Companies as of the end of such fiscal quarter and the related unaudited consolidated statement of income for such fiscal quarter and fiscal year-to-date period then ended (the “Quarterly Financial Statements”).

6.9Material Letters Regarding Financial Statements. The Seller Parties shall provide to Purchaser, promptly upon receipt by the Acquired Companies up until the Closing Date, all material letters received by the Acquired Companies from their accountants with respect to the Financial Statements.

6.10Affiliate Transactions. Except as set forth in Section 6.10 of the Company Disclosure Letter, each Acquired Company shall terminate, cancel and discharge, without payment or other satisfaction all Affiliate Transactions (other than salary or other compensation or benefits under Employee Benefit Plans paid or payable in the Ordinary Course to employees of the Acquired Company, in each case, in consideration for bona fide services performed by such employees) on or prior to the Closing Date.

6.11Listing of Parent Common Stock. Parent shall use its reasonable best efforts to cause the Parent Common Stock to be issued pursuant to this Agreement to be approved for listing on NYSE, subject only to notice of issuance, prior to the Closing.

6.12Employee Matters.

(a)WARN Act. Following the Closing Date, the Acquired Companies and Purchaser shall be responsible for any obligation with respect to WARN arising on or after the Closing. If applicable, the parties hereto agree to cooperate in good faith to determine whether any notification may be required under WARN as a result of the transactions contemplated by this Agreement.

(b)Service and Participation in Parent Employee Benefit Plans. On and after the Closing, the Company Employees shall be covered by benefit plans, programs, practices, policies and arrangements maintained by the Parent or its Affiliates (the “Parent Employee Benefit Plans”), subject to the terms and conditions of such Parent Employee Benefit Plans. Nothing contained herein, express or implied, is intended to confer upon any employee of the Company any right to continued employment for any period or continued receipt of any specific employee benefit, or shall constitute an amendment to or any other modification of any Parent Employee Benefit Plan or Employee Benefit Plan. Nothing in this Section 6.12(b) shall be deemed to limit the right of Parent or its Affiliates, the Acquired Companies or any of their respective affiliates to terminate the employment of any employee at any time.

6.13Closing Conditions. From the date hereof until the Closing, each Party hereto shall, and each Seller Party shall cause the Acquired Companies to, use reasonable best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article 7 hereof.

6.14Public Announcements. Unless otherwise required by applicable Law or NYSE requirements (based upon the reasonable advice of counsel), no public announcements in respect of this Agreement or the transactions contemplated hereby or any other communication with any news media shall be issued or made without the prior written consent of the Purchaser and Seller (which consent shall not be unreasonably withheld or delayed); provided that the Purchaser is expressly permitted to make verbal announcements without prior consent of Seller. The Seller will receive an advance copy of any Current Report on Form 8-K and the relevant portion of the Parent’s 2021 third quarter Quarterly Report on Form 10-Q describing the transactions contemplated by this Agreement. For the avoidance of doubt, communications with third parties in connection with obtaining the consents described on Schedule C shall not require the prior written consent of the Purchaser so long as such communications are consistent with the consent communication process agreed upon by the Seller Parties and the Purchaser.

6.15Cooperation with Financing.

(a)Prior to the Closing, Seller Parties shall use commercially reasonable efforts, and cause their Representatives to use commercially reasonable efforts, to provide to Purchaser all customary cooperation that is reasonably requested by Purchaser in connection with Purchaser’s efforts to obtain any required debt financing for the transactions contemplated hereunder (the “Debt Financing”), including: (i) facilitating the pledging of collateral on the assets of the Acquired Companies to the extent consistent with the Organizational Documents of the Upper Tier Funds, provided that any pledge shall require the prior written consent of the Seller (which shall not be unreasonably withheld, delayed or conditioned); provided, further, that no pledge shall be effective until the Closing; (ii) delivery to Purchaser and its lenders of such information with respect to the business, operations, financial condition, and prospects of the Acquired Companies as may be reasonably requested by Purchaser or its lenders in connection with the preparation of pro forma financial presentations or calculations in connection with the Debt Financing as promptly as reasonably practicable following Purchaser’s request therefor; (iii) assisting in the negotiation of definitive financing documents as may be required by Purchaser’s lenders; (iv) taking such actions and making such deliverables as may be required to satisfy any

condition precedent under the Debt Financing, in each case, as are reasonably requested by Purchaser to facilitate the satisfaction on a timely basis of all conditions precedent to obtaining the Debt Financing that are within the Seller Parties’ control; and (v) providing, no later than three (3) Business Days prior to the Closing Date, all documentation and other information about Seller Parties required under applicable “know your customer” and anti-money laundering rules and regulations that in each case has been requested in writing by Purchaser at least ten (10) Business Days prior to the Closing Date; provided, however, that nothing in this Agreement shall require such cooperation to the extent it would interfere unreasonably with the business or operations of the Seller Parties; and provided, further, that notwithstanding anything in this Agreement to the contrary, the Seller Parties shall not (x) be required to incur or pay any costs or expenses related to the cooperation provided pursuant to this Section 6.15 or pay any fees (including commitment or other similar fees) or to give any indemnities or incur any liabilities, (y) have any liability or obligation under any loan agreement, debt security or any related document or any other agreement or document related to the Debt Financing, or (z) be required to provide access to or disclose information where such access or disclosure would (or would be reasonably expected to) jeopardize the attorney-client privilege or contravene any applicable Law. The Purchaser will reimburse the Seller Parties, the Acquired Companies and their Representatives, as applicable, for all reasonable and documented out-of-pocket costs and expenses (including reasonable attorney’s fees and expenses and disbursements) incurred by any of them in providing the cooperation to Purchaser contemplated by this Section 6.15 and will reimburse, defend, indemnify and hold harmless any such Person from, against and in respect of any and all damages resulting from, or that exist or arise due to or in connection with providing to the Purchaser the cooperation contemplated by this Section 6.15, except to the extent such damages arise or result from the gross negligence, Fraud or willful misconduct or intentional breach of this Agreement by the Seller Parties, the Acquired Companies or their Representatives. Notwithstanding anything to the contrary, the condition set forth in Section 7.2(a), as it applies to the Seller Parties’ and the Acquired Companies’ obligations under this Section 6.15, shall be deemed satisfied unless the Debt Financing (or any alternative financing) has not been obtained solely as a result of the Seller Parties’ material breach of their obligations under this Section 6.15 (which breach has not been cured by Seller Parties and the Acquired Companies within fifteen (15) days after receipt of written notice thereof by the Seller Parties).

(b)Notwithstanding any other provision set forth herein or in any other agreement between the Seller Parties and Purchaser, the Seller Parties agree that Purchaser may share non-public or confidential information regarding the Acquired Companies with Purchaser’s lenders, and that Purchaser, its Affiliates and Representatives may share such information with lenders providing the Debt Financing, provided that all such recipients are subject to confidentiality obligations at least as restrictive as those applicable to Purchaser under this Agreement and the Confidentiality Agreement dated as of November 9, 2020.

6.16Mureau Road Lease Agreement. Prior to the Closing, the Purchaser and Seller shall negotiate in good faith a lease agreement for the real property located at 26050 Mureau Road, Calabasas, California 91302, to be leased by the Purchaser (or an Affiliate thereof) and Mureau Road, LLC with customary arms-length and market-rate terms for a ten-year term (the “Mureau Road Lease Agreement”).

6.17“Key Man” Substitutions. To the extent not completed prior to Closing, from and after Closing, the Seller Parties shall use best efforts and cooperate with the Purchaser to replace the “Key Man” referenced in the Company Agreements set forth on Section 4.15(a)(xii) of the Company Disclosure Letter with a Person acceptable to the Purchaser (in its sole discretion).

6.18Further Assurances. Following the Closing, each of the Parties hereto shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement. For the avoidance of doubt, any breach by Purchaser of the covenants of Purchaser under this Agreement shall also be deemed to be a breach of this Agreement by Parent.

6.19Director and Officer Liability and Indemnification.

(a)Prior to or simultaneously with the Closing, the Seller Parties shall purchase the Tail Policies; provided that the premiums and expenses for the Tail Policies shall be borne by the Purchaser. The Purchaser shall, and the Purchaser shall cause the Acquired Companies to, maintain such Tail Policies to the end of their respective terms.

(b)For a period of six (6) years after the Closing, the Acquired Companies and its Subsidiaries will (and the Purchaser will cause the Acquired Companies and their Subsidiaries to) honor and fulfill, in all respects, the obligations of the Acquired Companies and their Subsidiaries with respect to indemnification, advancement of expenses and exculpation by the Acquired Companies or any of their Subsidiaries existing in favor of the current or former directors, officers or employees of the Acquired Companies and their Subsidiaries (and any person who becomes a director, officer or employee of the Acquired Companies or their Subsidiaries prior to the Closing) (collectively, the “D&O Indemnitees”) for their respective acts and omissions occurring prior to the Closing, in each case, as provided in the Organizational Documents of the Acquired Companies and their Subsidiaries, as applicable, as in effect on the date of this Agreement and as provided in any indemnification agreements between the Acquired Companies or any of their Subsidiaries and said D&O Indemnitee for any acts or omissions by such D&O Indemnitee occurring prior to the Closing. In addition, the Purchaser shall not, and shall not permit the Acquired Companies or any of their Subsidiaries to, amend, repeal or otherwise modify any provision in the Acquired Companies’ or any of their Subsidiaries’ Organizational Documents relating to the exculpation, advancement, indemnification or other limitations on liability existing in favor of any D&O Indemnitee (unless to provide for greater exculpation, advancement, indemnification or limitations on liability or unless required by Law) with regard to pre-Closing acts, errors, omissions, or matters by reason of their status with the Acquired Companies and their Subsidiaries, it being the intent of the parties hereto that the D&O Indemnitees shall continue to be entitled to such exculpation, advancement, indemnification and other limitations on liability to the full extent of the Law. The Purchaser agrees and acknowledges that this Section 6.19 shall be binding on the Purchaser’s successors and assigns.

(c)If the Acquired Companies, their Subsidiaries or any of their respective successors or assigns (i) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) shall transfer

all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of the Acquired Companies and their Subsidiaries shall assume all of the obligations set forth in this Section 6.19.

(d)Notwithstanding anything in this Agreement to the contrary, if any Claim or investigation (whether arising before, at or after the Closing Date) is made against any individual who was a D&O Indemnitee at or prior to the Closing or any other party covered by directors’ and officers’ liability insurance, on or prior to the sixth (6th) anniversary of the Closing, the provisions of this Section 6.19 shall continue in effect until the final disposition of such claim, action, suit, proceeding or investigation.

(e)The obligations under this Section 6.19 shall not be terminated or modified in such a manner as to affect adversely any D&O Indemnitee to whom this Section 6.19 applies without the consent of such affected D&O Indemnitee. The provisions of this Section 6.19 are intended for the benefit of, and will be enforceable by (as express third-party beneficiaries), each D&O Indemnitee and his or her heirs and representatives, successors and assigns and are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such person may have had by contract or otherwise.

(f)Notwithstanding anything contained in this Section 6.19, the provisions of this Section 6.19 shall not apply to any D&O Indemnitee to the extent such D&O Indemnitee is the subject of a Claim by Purchaser or Parent under Article 9.

6.20Restrictive Covenants.

(a)As an inducement to Purchaser to enter into this Agreement, from the Closing Date until the fourth (4^th) anniversary of the Closing Date, except as set forth on Section 6.20 of the Company Disclosure Letter, no Seller Party shall, and no Seller Party shall cause or permit any of its Affiliates or immediate family members to, directly or indirectly (whether by itself, through another Affiliate or in partnership with, or as a member, manager, stockholder, owner, partner, principal, director, trustee, employee, consultant, representative or agent of, any other Person), take any of the following actions:

(i)engage, anywhere in the world, in any business which sells or provides Competitive Services (such business, a “Competing Business”). For purposes of this Agreement, “Competitive Services” shall mean the provision of services that are the same as or substantially similar to those provided by the Business as currently conducted and proposed to be conducted based on its current operations. Notwithstanding the foregoing, a Seller Party will not be deemed to have violated this Section 6.20(a)(i) solely by providing legal, accounting or audit services as an employee or partner of a professional services organization;

(ii)make any investment (whether equity, debt or other) in, lend or otherwise provide any money or assets to, or provide any guaranty or other financial assistance to, any Competing Business, except for passive investments of one percent (1%) or less in a Competing Business that is publicly traded;

(iii)solicit, directly or indirectly, on such Seller Party’s own behalf or on behalf of any other Person, any client of an Acquired Company to whom an Acquired Company had provided services at any time during the six (6) months prior to the date of this Agreement in any line of business that an Acquired Company conducts as of the date of this Agreement, or that an Acquired Company is actively soliciting as of the date of this Agreement, for the purpose of marketing or providing any Competitive Service;

(iv)directly or indirectly, solicit for hire or cause any business, other than for an Affiliate of the Purchaser or Acquired Companies, to solicit for hire any person who was at any time during the six (6) months prior to the date of this Agreement an employee of an Acquired Company and who is at the time of such hire or attempted hire, or was at the date of such employee’s separation from the Acquired Companies or Parent (or any affiliate of Parent) a vice president, senior vice president or executive vice president or other senior executive employee of the Acquired Companies or Parent (or any affiliate of Parent). Notwithstanding the foregoing, Justin Terbeeck is specifically excluded from the foregoing restrictive covenant described in this Section 6.20(a)(iv).

(b)The Parties agree that the restrictions set forth in this Section 6.20 are reasonable and completely severable and independent, and any invalidity or unenforceability of this Agreement with respect to any one area or any one restriction in this Section 6.20 shall not render this Agreement unenforceable as applied to any one or more of the other areas or other restrictions herein.

(c)The Parties acknowledge that the restrictions set forth in this Section 6.20 are necessary for the protection of Purchaser and its Affiliates and that any breach thereof will cause such Persons irreparable damage, that such Person’s remedies at law in the event of such breach would be inadequate, and that, accordingly, Purchaser shall be entitled to the issuance by a court of competent jurisdiction of a temporary, preliminary, or permanent injunction in favor of such Person enjoining the breach or threatened breach of such restrictions. The foregoing provision shall not constitute a waiver of any other remedies that Purchaser may have in law or in equity.

6.21Cash Sweep. Notwithstanding anything to the contrary set forth in this Agreement, at any time prior to the Closing, the Seller Parties and their Affiliates shall be permitted to engage in cash management activities commonly referred to as a “cash sweep”, pursuant to which the Seller Parties or any of their Affiliates may transfer or cause to be transferred any or all of the funds from the bank accounts of any or all members of the Acquired Companies, to any bank account or accounts controlled by the Seller Parties or any of their Affiliates outside of the Acquired Companies; provided such transactions shall not cause the Acquired Companies, as of the Closing, to be in material violation of or material default under any regulations or debt covenants applicable to the Acquired Companies. For the avoidance of doubt, any funds transferred from any such Acquired Company bank account pursuant to this Section 6.21 outside of the Acquired Companies shall not be included in Closing Net Working Capital.

6.22PPP Escrow Amount.

(a)At any time prior to Closing:

(i)If Alliant Asset Management or a Seller Party receives written evidence of the denial of forgiveness under the CARES Act by the PPP Lender or the Small Business Administration of any or all of the Outstanding PPP Loan Amount (such unforgiven amount, including any interest and or penalties, the “PPP Denied Amount”), then the Seller Parties shall immediately notify the Purchaser in writing of such event, and Alliant Asset Management or the Seller Parties shall cause the PPP Denied Amount to be paid by Alliant Asset Management or the Seller Parties to the PPP Lender on such terms as required by the PPP Lender.

(ii)If Alliant Asset Management or a Seller Party receives written evidence of forgiveness under the CARES Act by the PPP Lender or the Small Business Administration of any or all of the PPP Loan Amount (such forgiven amount, the “PPP Forgiven Amount”), then the Seller Parties shall immediately notify the Purchaser in writing of such event.

(b)If the Outstanding PPP Loan has not been forgiven prior to Closing, the Seller Parties agree that the Seller Parties shall, or shall cause Alliant Asset Management to, enter into a customary PPP Escrow Agreement, in such form and substance reasonably acceptable to the Purchaser, with the PPP Lender for the PPP Escrow Amount.

(c)On or after Closing:

(i)At such time(s), if any, as Purchaser, Alliant Asset Management or a Seller Party receives written evidence of the denial of forgiveness under the CARES Act by the PPP Lender or the Small Business Administration of any or all of the Outstanding PPP Loan Amount, then Purchaser, Alliant Asset Management and/or the Seller Parties shall cause the PPP Denied Amount to be disbursed from the PPP Escrow Account to the PPP Lender on such terms as required by the PPP Lender.

(ii)At such time(s), if any, as Purchaser, Alliant Asset Management or a Seller Party receives written evidence of forgiveness under the CARES Act by the PPP Lender or the Small Business Administration of any or all of the PPP Loan Amount, then Purchaser, Alliant Asset Management and/or the Seller Parties shall cause the PPP Forgiven Amount to be disbursed from the PPP Escrow Account to the Seller Parties, in accordance with the wire instructions provided in a written instruction by the Seller Parties to Purchaser, provided and none of Purchaser nor its Affiliates shall have any liability to the Seller Parties or their respective Affiliates with respect to the payments made in accordance with such instructions.

(iii) Purchaser shall use commercially reasonable efforts to cooperate with the Seller Parties (if and to the extent reasonably and specifically requested by the Seller Parties, and subject to the reasonable discretion of Purchaser, acting in good faith) in order to obtain forgiveness under the CARES Act with respect to the Outstanding PPP Loan at the Seller Parties’ sole cost and expense, it being agreed that under no circumstances shall

Purchaser be required to incur any out of pocket costs, expenses or liabilities with respect to this Section 6.22, and any such amount incurred shall be repaid by the Seller Parties to Purchaser, and notwithstanding anything in this Agreement to the contrary, Purchaser shall be entitled to collect such repayment by set-off against any amounts payable to the Seller Parties under Section 2.3(f), Section 2.5(g) or from the Indemnity Escrow Account.

(d)Each of the Parties agrees to make commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things reasonably required and appropriate, and execute and deliver such documents and other papers (such as written instructions to the PPP Lender as escrow agent for the PPP Escrow Account), as may be reasonably required or appropriate to carry out the provisions of this Section 6.22.

ARTICLE 7

CONDITIONS PRECEDENT TO THE CLOSING

7.1Mutual Conditions Precedent to Obligations of the Parties. The mutual obligations of Parent and Purchaser, on the one hand, and the Seller Parties and the Acquired Companies, on the other hand, under this Agreement to consummate the transactions contemplated hereby shall be subject to the satisfaction, at or prior to the Closing, of all of the following conditions:

(a)No Legal Obstruction. No suit, action or proceeding by any Governmental Authority with respect to the transactions contemplated hereby shall be pending or threatened in writing and no order shall have been entered in any such suit, action or proceeding or in any suit, action or preceding by a third party with respect to the transactions contemplated hereby, in each case, that would have the effect of (i) making any of the transactions contemplated by this Agreement or the Transaction Documents illegal, (ii) otherwise preventing the consummation of such transactions or (iii) imposing limitations on such transactions and/or the ability of any Party to perform its obligations hereunder or under any Transaction Document.

(b)HSR Act. Any waiting period (and any extension of such period) under the HSR Act applicable to the transactions contemplated by this Agreement and any agreement with any Governmental Authority not to close the transactions contemplated by this Agreement shall have expired or shall have been terminated.

(c)Third Party Consents. The Seller Parties shall have obtained the Consents listed in Schedule C.

(d)Resolution. The Acquired Companies and the applicable Seller Parties shall have resolved the matters set forth on Section 7.1(d) of the Company Disclosure Letter to Purchaser’s satisfaction, in its reasonable discretion.

7.2Conditions Precedent to Obligations of Parent and Purchaser. The obligations of Parent and Purchaser under this Agreement to consummate the transactions contemplated hereby shall be subject to the satisfaction, at or prior to the Closing, of all of the following conditions, any one or more of which may be waived in whole or in part in writing in the sole discretion of Purchaser:

(a)Performance. The Seller Parties and the Acquired Companies shall have complied with and performed all of their respective obligations, covenants and agreements under this Agreement or any Transaction Document to be complied with or performed thereby in whole or in part prior to the Closing in all material respects.

(b)Representations and Warranties. The representations and warranties of the Seller Parties and the representations and warranties of the Acquired Companies contained in this Agreement (other than the representations and warranties contained in Section 4.3(a)), disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made at and as of the Closing Date (except that the accuracy of representations and warranties that expressly speak only as of a specified date will be determined as of such date), except where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Acquired Companies or have a material adverse effect on the Seller Parties’ or the Acquired Companies’ ability to perform its obligations under this Agreement. The representations and warranties contained in Section 4.3(a) shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made at and as of the Closing Date.

(c)No Material Adverse Effect. No Material Adverse Effect on the Acquired Companies, taken as a whole, shall have occurred since the date of this Agreement and be continuing on the Closing Date.

(d)Closing Deliveries. Purchaser shall have received correct and complete copies of all documents and other items to be delivered thereto under Section 3.2 of this Agreement.

(e)Consents and Approvals. All approvals, authorizations and actions of, filings with and notices to any Governmental Authority (whether or not scheduled and including any Governmental Approvals) necessary to permit the Seller Parties and the Acquired Companies to perform their respective obligations under this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby and thereby, other than those Consents set forth on Schedule C, shall have been duly obtained, made or given, in form and substance reasonably satisfactory to Purchaser except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Acquired Companies or have a material adverse effect on the Seller Parties or the Acquired Companies’ ability to perform its obligations under this Agreement.

(f)Excluded Entities. Each Excluded Entity shall be dissolved or, in the alternative, the equity interests of each Excluded Entity shall have been distributed to a Seller Party, with no liability to the Acquired Companies.

(g)Termination of Plans. The Acquired Companies shall have (i) terminated any Acquired Company 401(k) plans effective as of the Business Day preceding the Closing Date; (ii) terminated all other Employee Benefit Plans so requested in writing by Purchaser more than

ten (10) days prior to the Closing Date, effective as of the Closing Date, and (iii) in each case, provided timely notice of the termination to the relevant service providers or insurance carriers.

7.3Conditions Precedent to Obligations of the Seller Parties and the Acquired Companies. The obligations of the Seller Parties and the Acquired Companies under this Agreement to consummate the transactions contemplated hereby will be subject to the satisfaction, at or prior to the Closing, of all the following conditions, any one or more of which may be waived in whole or in part in writing in the sole discretion of the Seller Parties and the Acquired Companies:

(a)Performance. Parent and Purchaser shall have complied with and performed all of its obligations, covenants and agreements under this Agreement or any Transaction Document to be complied with or performed thereby in whole or in part prior to the Closing in all material respects.

(b)Representations and Warranties. The representations and warranties of Parent and Purchaser contained in this Agreement (other than the representations and warranties set forth in Section 5.2), disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect, shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made at and as of the Closing Date (except that the accuracy of representations and warranties that expressly speak only as of a specified date will be determined as of such date), except where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent or have a material adverse effect on each of Parent’s and Purchaser’s ability to perform its obligations under this Agreement. The representations and warranties set forth in Section 5.2 shall be true and correct in all respects as of the date hereof and as of the Closing Date as if made at and as of the Closing Date.

(c)No Material Adverse Effect. No Material Adverse Effect on Parent and Purchaser, taken as a whole, shall have occurred since the date of this Agreement and be continuing on the Closing Date.

(d)Closing Deliveries. The Seller Parties shall have received correct and complete copies of all documents and other items to be delivered thereto under Section 3.3 of this Agreement.

(e)Consents and Approvals. All approvals, authorizations and actions of, filings with and notices to any Governmental Authority (whether or not scheduled and including any Governmental Approvals) necessary to permit Parent and Purchaser to perform its obligations under this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby and thereby, other than those Consents set forth on Schedule C, shall have been duly obtained, made or given, in form and substance reasonably satisfactory to the Seller Parties, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent or have a material adverse effect on Parent’s or Purchaser’s ability to perform its obligations under this Agreement.

(f)Stock Consideration. The Stock Consideration will be fully paid and validly issued and Parent’s counsel shall have delivered an opinion, in form and substance reasonably acceptable to the Seller Parties and customary for transactions of this nature, with respect to the issuance of the Stock Consideration. The Parent Common Stock shall be publicly listed on the NYSE effective as of the Closing Date and there shall have been no suspension of trading of Parent Common Stock between the date of this Agreement and the Closing Date.

ARTICLE 8

TERMINATION

8.1Termination.

(a)Termination of Agreement. This Agreement may be terminated and abandoned at any time prior to the consummation of the Closing under the following circumstances:

(i)upon the written consent of Purchaser and the Seller Parties;

(ii)by Purchaser, if any of the conditions set forth in Sections 7.1 and 7.2 shall not be fully satisfied, or if the Closing shall not have occurred, on or before the Outside Date (unless such failure results primarily from Purchaser breaching any representation, warranty, covenant or agreement contained in this Agreement);

(iii)by Purchaser, if a Seller Party or Acquired Company shall have breached any representation, warranty, covenant or agreement contained in this Agreement, which breach cannot be or has not been cured within thirty (30) days after the giving of written notice thereof by Purchaser to the Seller Parties and/or the Acquired Companies, as applicable, and which breach would give rise to the failure of a condition set forth in Sections 7.1 or 7.2;

(iv)by Purchaser, for any reason other than pursuant Section 8.1(a)(ii) or Section 8.1(a)(iii), provided that the Purchaser Termination Fee set forth in Section 8.1(b) is paid by Purchaser in advance of such termination in accordance with Section 8.1(b);

(v)by the Seller Parties, if any of the conditions set forth in Sections 7.1 and 7.3 shall not be fully satisfied, or if the Closing shall not have occurred, on or before the Outside Date (unless such failure results primarily from a Seller Party or Acquired Company breaching any representation, warranty, covenant or agreement contained in this Agreement);

(vi)by the Seller Parties, if Purchaser shall have breached any representation, warranty, covenant or agreement contained in this Agreement, which breach cannot be or has not been cured within thirty (30) days after the giving of written notice thereof by the Seller Parties to Purchaser, and which breach would give rise to the failure of a condition set forth in Sections 7.1 or 7.3; or

(vii)by the Seller Parties or Purchaser, if any Law or Governmental Authority prohibits the consummation of the purchase of the Transferred Equity contemplated hereby or if any order of a Governmental Authority restrains, enjoins or otherwise prohibits consummation of the purchase of the Transferred Equity contemplated hereby, and such order has become final and non-appealable.

(b)Purchaser Termination Fee.

(i)In the event that the Agreement is terminated by Purchaser pursuant to Section 8.1(a)(iv), then Purchaser shall pay to Seller Parties a fee of $20,000,000 (the “Purchaser Termination Fee”) no later than immediately before the effective date of such termination by wire transfer of immediately available funds to an account specified by Seller Parties in writing to Purchaser. In the event that the Purchaser Termination Fee becomes payable and is paid by the Purchaser pursuant to this Section 8.1(b)(i), the Purchaser Termination Fee shall be the sole and exclusive remedy of Seller Parties and their Affiliates with respect to such termination, including any Losses arising out of or related to the breach or breaches giving rise to such termination or Purchaser’s such termination and failure to consummate the Transactions. In no event shall any Seller Party seek any (x) equitable relief or equitable remedies of any kind whatsoever or (y) money damages or any other recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, other than damages in an amount not in excess of the Purchaser Termination Fee, arising out of or related to the breach or breaches giving rise to any such termination or Purchaser’s such termination and failure to consummate the Transactions. Notwithstanding the foregoing, in no event shall any Purchaser Termination Fee be due to any Seller Party in the event of a Purchaser termination pursuant to Section 8.1(a)(iv) that resulted from a Seller Party’s material breach of its obligations under Section 6.15; any such termination by Purchaser shall be treated as a termination by Purchaser pursuant to Section 8.1(a)(iii).

(ii)The Seller Parties understand and agree that in no event shall the Purchaser be required to pay the Purchaser Termination Fee on more than one occasion. The Seller Parties agree that (x) the Purchaser Termination Fee constitutes compensation and is not a penalty, (y) the liabilities and damages that may be incurred or suffered by the Seller Parties in circumstances where the Purchaser Termination Fee is payable to the Seller Parties are impossible or very difficult to accurately estimate, and (z) the Purchaser Termination Fee is a reasonable estimate of the anticipated or actual harm that might be suffered by the Seller Parties in the circumstances where the Purchaser Termination Fee is payable to the Seller Parties.

(c)Effect of Termination. In the event of the termination of this Agreement pursuant to Section 8.1(a), this Agreement shall forthwith become void and there shall be no liability on the part of any Party or its Affiliates or their respective equityholders, partners, directors, managers and officers under this Agreement, other than this Section 8.1(c), Section 6.2, and Article 10, which shall survive any such termination, except that nothing herein shall relieve any Party from liability arising from or resulting from any intentional breach of this Agreement by such Party prior to such termination (which shall include a breach of such Party’s obligation to

consummate the transactions contemplated by this Agreement in the event that all conditions in Article 7 to such Party’s obligations have been satisfied) or Fraud by such Party.

ARTICLE 9

INDEMNIFICATION

9.1Indemnification of Purchaser.

(a)After the Closing, the Seller Parties shall jointly and severally indemnify each of Parent, Purchaser and their Affiliates (including the Acquired Companies), and their respective directors, members, officers, equity holders, partners, employees, agents, subsidiaries, representatives and successors and assigns (collectively, the “Purchaser Indemnified Parties”), and save and hold each of the Purchaser Indemnified Parties harmless from and against and pay or reimburse the Purchaser Indemnified Parties as and when incurred for:

(i)any and all Losses which any Purchaser Indemnified Party may suffer, sustain or become subject to, to the extent resulting from or arising out of any inaccuracy in or breach of any representation or warranty of the Seller Parties or the Acquired Companies contained in this Agreement as of the date hereof or as of the Closing Date;

(ii)any and all Losses which any Purchaser Indemnified Party may suffer, sustain or become subject to, to the extent resulting from or arising out of, any nonfulfillment or breach of any covenant or agreement on the part of the Acquired Companies prior to the Closing or on the part of the Seller Parties;

(iii)any and all Losses resulting from or arising out of any (A) Taxes of or with respect to the Acquired Companies for all taxable periods ending on or before the Closing Date and the portion through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (as allocated, in the case of a Straddle Period, pursuant to Section 6.7(d) hereof) (“Pre-Closing Tax Period”), (B) Taxes of the Seller Parties with respect to any taxable period attributable to an Acquired Company, (C) Taxes imposed on or with respect to an Acquired Company under Section 965 of the Code, (D) Taxes arising or resulting from the breach of any covenants or agreements of the Seller Parties or, for covenants or agreements arising in, attributable or relating to a Pre-Closing Tax Period, Acquired Companies under this Agreement, (E) Transfer Taxes for which the Seller Parties are responsible pursuant to Section 6.7(d), (F) Taxes of any member of an affiliated, consolidated, combined or unitary group for which an Acquired Company (or any predecessor thereof) is or was liable as a result of being a member of such affiliated, consolidated, combined or unitary group on or prior to the Closing Date, including pursuant to Treasury Regulations Section 1.1502-6 or any analogous or similar U.S. state, local, or non-U.S. Law, and (G) Taxes of any Person imposed on an Acquired Company under any Tax Sharing Agreement, as a transferee or successor, by contract, agreement or arrangement or otherwise, which Taxes relate to an event or transaction occurring before the Closing, (collectively, “Covered Taxes”); provided, however, that Covered Taxes shall not include any amounts that have already been taken into account in final determination of Closing Indebtedness or Closing Net Working Capital;

(iv)any Closing Indebtedness and Transaction Costs that were not taken into account in the calculation of Cash Consideration pursuant to Section 2.2; and

(v)those items set forth on Section 9.1(a)(v) of the Company Disclosure Letter.

(b)The representations and warranties of the Seller Parties and the Acquired Companies contained in this Agreement and in any certificate delivered pursuant to Section 3.2 of this Agreement shall survive the Closing and continue in full force and effect (i) in the case of the representations and warranties set forth in Section 4.1(a), Section 4.1(b), Section 4.1(c), Section 4.1(d)(i), Section 4.2, Section 4.3, Section 4.4(a), Section 4.4(b), Section 4.4(c), Section 4.4(d)(i) and Section 4.21, until the date that is forty-eight (48) months following the Closing Date; (ii) in the case of the representations and warranties set forth in Section 4.8 until sixty (60) days following the expiration of the applicable statute of limitations (including any extension thereof) with respect to the subject matter of such representations and warranties; and (iii) in the case of all other representations and warranties, until the date that is twelve (12) months following the Closing Date. The representations and warranties identified in clauses (i) and (ii) of the immediately preceding sentence are referred to herein as the “Seller Fundamental Representations.” Notwithstanding anything herein to the contrary, if written notice of any claim for indemnification hereunder has been delivered in accordance herewith prior to the expiration of the representation or warranty upon which such claim is based, the relevant representations and warranties shall not expire but solely as to such claim, and such claim may be pursued until the final resolution of such claim in accordance with the provisions of this Article 9.

(c)The indemnification provided for in Section 9.1(a) is subject to the following limitations:

(i)Any Losses claimed by a Purchaser Indemnified Party under Section 9.1(a)(i) (other than Losses in connection with, resulting from or arising out of directly or indirectly, any inaccuracy in or breach of a Seller Fundamental Representation or Fraud with respect to the Seller Parties’ or the Acquired Companies’ representations and warranties set forth in this Agreement) shall (A) first, be applied against the Deductible (and therefore not recoverable from the Seller Parties) until the aggregate amount of Losses exceeds the Deductible, (B) second, be recoverable from the Indemnity Escrow Account up to an amount equal to Indemnity Escrow Amount, (C) be recoverable through the set-off provided in Section 9.1(d), and (D) thereafter, be solely and exclusively recoverable from the Seller Parties, jointly and severally, in each case up to an aggregate maximum amount equal to $30,000,000.

(ii)Any Losses claimed by a Purchaser Indemnified Party under Section 9.1(a)(i) resulting from or arising out of directly or indirectly, any inaccuracy in or breach of a Seller Fundamental Representation or Losses under Sections 9.1(a)(ii), 9.1(a)(iii), 9.1(a)(iv) or 9.1(a)(v) shall (A) first, be recoverable from the Indemnity Escrow Account up to an amount equal to the Indemnity Escrow Account, (B) second, be recoverable through the set-off provided in Section 9.1(e), and (C) thereafter, be solely and exclusively recoverable from the Seller Parties, jointly and severally, in each case up to an aggregate maximum amount equal to $275,000,000, provided that Losses under Section 9.1(a)(iii)

are recoverable from the Seller Parties, jointly and severally, up to an aggregate maximum amount equal to the Consideration (including any Earnout Payments).

(d)In the event the Seller Parties are obligated to indemnify any Purchaser Indemnified Party for any Losses pursuant to this Article 9 in excess of the Indemnity Escrow Amount, then subject to applicable Law, the Purchaser in its sole discretion can require the Seller Parties to satisfy all or part of the obligation to pay such Losses to such Purchaser Indemnified Party by forfeiting and canceling the number of shares of Parent Common Stock having an Indemnity Share Value equal to the amount of such Losses (the “Indemnity Share Sale Proceeds”).

(e)In the event the Seller Parties are obligated to indemnify any Purchaser Indemnified Party for any Losses in excess of the Indemnity Escrow Amount, Purchaser shall have the set-off rights set forth in Section 2.5(g) and Purchaser may set-off any amounts due to it on account of such indemnification against amounts it owes to the Seller Parties with respect to the Earnout Payments. Except as provided below in this Section 9.1(e), no set-off may take place until such time as a Claim has been properly and timely made and such Claim for indemnification has been agreed upon or been determined to be in favor of the Purchaser Indemnified Parties as set forth in this Agreement. Notwithstanding the foregoing, to the extent Purchaser has properly and timely asserted a claim for indemnification pursuant to this Article 9 that has not yet been resolved (each, a “Pending Indemnification Claim”) but that was asserted prior to the date on which an Earnout Payment is deemed to be due and payable pursuant to the terms of this Agreement, the amount of Losses that is the subject of any such Pending Indemnification Claim, as reasonably determined by Purchaser acting in good faith, shall be held back from any such Earnout Payment that may be payable by Purchaser pursuant to the terms of this Agreement until such Pending Indemnification Claim has been agreed upon or otherwise resolved pursuant to the terms and conditions of this Agreement, following which time the applicable portion of the amount held back, if any, shall be distributed to the Seller Parties if, and only to the extent that, such Pending Indemnification Claim was resolved in favor of the Seller Parties.

(f)Any claim under the Indemnity Escrow Agreement shall not constitute an election of remedies or limit any Purchaser Indemnified Party in any manner in the enforcement of any other remedies that might be available to it under this Article 9.

(g)Notwithstanding anything herein to the contrary, no Seller Party shall be liable to any Purchaser Indemnified Party for Losses and indemnification obligations pursuant to this Article 9 to the extent that any Purchaser Indemnified Party shall have otherwise been compensated for such matter pursuant to, or the Loss was taken into account under, any other provision of this Agreement, so as to avoid duplication or “double counting” of the same Loss.

9.2Indemnification of the Seller Parties.

(a)After the Closing, Purchaser shall indemnify each Seller Party and such Seller Party’s Affiliates and their respective directors, members, officers, equity holders, partners, employees, agents, subsidiaries, Representatives and successors and assigns (collectively, the “Seller Indemnified Parties,” and together with the Purchaser Indemnified Parties, the

“Indemnified Parties”), and save and hold each of the Seller Indemnified Parties harmless from and against and pay or reimburse the Seller Indemnified Parties as and when incurred for:

(i)any and all Losses which any Seller Indemnified Party may suffer, sustain or become subject to, to the extent resulting from or arising out of any inaccuracy in or breach of any representation or warranty of Parent or Purchaser contained in this Agreement as of the date hereof or as of the Closing Date;

(ii)any and all Losses which any Seller Indemnified Party may suffer, sustain or become subject to, to the extent resulting from or arising out of any nonfulfillment or breach of any covenant or agreement on the part of the Acquired Companies after the Closing or on the part of Parent or Purchaser.

(b)The representations and warranties of Parent and Purchaser contained in this Agreement and in any certificate delivered pursuant to Section 3.3 of this Agreement shall survive the Closing and continue in full force and effect (i) in the case of the representations and warranties set forth in Section 5.1(a), Section 5.2, Section 5.3(b)(i), Section 5.4, and Section 5.13, until the date that is forty-eight (48) months following the Closing Date; and (ii) in the case of all other representations and warranties, until the date that is twelve (12) months following the Closing Date. The representations and warranties identified in clause (i) of the immediately preceding sentence are referred to herein as the “Purchaser Fundamental Representations.” Notwithstanding anything herein to the contrary, if written notice of any claim for indemnification hereunder has been delivered in accordance herewith prior to the expiration of the representation or warranty upon which such claim is based, the relevant representations and warranties shall not expire but solely as to such claim, and such claim may be pursued until the final resolution of such claim in accordance with the provisions of this Article 9.

(c)Purchaser shall not be liable to Seller Indemnified Parties under Section 9.2(a)(i) and unless and until the Losses incurred by all Seller Indemnified Parties pursuant thereto exceed, in the aggregate, the Deductible, in which case Purchaser shall be liable, subject to Section 9.2(d), Section 9.2(e) and Section 9.2(f), to the applicable Seller Indemnified Party for the full amount of the Losses in excess of the Deductible.

(d)The aggregate amount required to be paid by Purchaser for claims for indemnification made under Section 9.2(a)(i) shall not exceed $90,000,000.

(e)Notwithstanding anything to the contrary contained herein, (i) Section 9.2(c) and Section 9.2(d) shall not apply to Losses in connection with, resulting from or arising out of directly or indirectly, any inaccuracy in or breach of a Purchaser Fundamental Representation or Fraud with respect to Parent’s or Purchaser’s representations and warranties set forth in this Agreement, and (ii) no indemnification payment made by the Seller Parties with respect to any matter described in Section 9.2(e)(i) shall be included in calculating whether the cap in Section 9.2(d) has been met.

(f)Notwithstanding anything to the contrary contained in this Agreement, in no event shall Purchaser be required to pay any amounts in satisfaction of claims for

indemnification under the provisions of this Agreement in excess of an amount equal to the Consideration actually received by the Seller Parties in the aggregate.

9.3Fraud. Nothing herein shall limit or restrain (whether a temporal limitation, a dollar limitation or otherwise) the ability of an Indemnified Party to seek remedies against any Indemnifying Party for Fraud.

9.4Indemnification Procedure.

(a)No Indemnified Party may seek indemnification under this Article 9, unless such Indemnified Party shall have first delivered written notice to the Seller Parties or Purchaser, as the case may be (for purposes of this Article 9, the “Indemnifying Party”) of the facts and circumstances (set forth in reasonable detail) giving rise to the claim within the applicable survival period for such claim as set forth in Section 9.1 or Section 9.2, as applicable.

(b)If any Claim shall be brought or asserted by any third party which, if adversely determined, would entitle the Indemnified Party to indemnity pursuant to this Article 9 (a “Third-Party Claim”), the Indemnified Party shall promptly notify the Indemnifying Party of such Third-Party Claim in writing, specifying the basis of such Third-Party Claim and the facts pertaining thereto; provided that the failure to provide such notice shall not affect an Indemnifying Party’s obligations under this Article 9 except and only to the extent that an Indemnifying Party is materially prejudiced by such failure.

(c)The Indemnifying Party shall have the right, in its discretion and at its expense, to participate in and control the defense or settlement of such Third-Party Claim using legal counsel reasonably satisfactory to the Indemnified Party; provided that the Indemnifying Party may control the defense or settlement of such Third-Party Claim only if (i) the claim does not seek an injunction or other equitable relief; (ii) the Indemnifying Party admits that such Third-Party Claim is indemnifiable pursuant to this Article 9 and that the Indemnifying Party will pay any Losses arising therefrom (subject to the limitations in this Article 9) (iii) the claim does not involve criminal allegations, a Governmental Authority, or any material supplier, customer or other partner to the Business; (iv) such Indemnifying Party assumes the defense of such Third-Party Claim within thirty (30) days of receipt by the Indemnifying Party of notice of such Third-Party Claim and a reasonable description of such Third-Party Claim; and (v) such Indemnifying Party conducts the defense of the Third-Party Claim diligently. If the Indemnifying Party assumes the defense of such Third-Party Claim, (A) the Indemnified Party shall be entitled, at its own cost and expense, to participate in the defense of such Third-Party Claim and to employ separate counsel of its choice for such purpose and (B) the Indemnifying Party shall keep the Indemnified Party reasonably apprised of all developments, including settlement offers, with respect to the Third-Party Claim. If the Indemnifying Party is permitted to assume and control the defense of a Third-Party Claim and elects to do so, the Indemnified Party shall have the right to employ counsel separate from counsel employed by the Indemnifying Party in any such action and to participate in the defense thereof, but the fees and expenses of such counsel employed by the Indemnified Party shall be at the expense of the Indemnified Party unless (A) the Indemnifying Party has specifically agreed in writing otherwise, (B) the Indemnified Party has been advised by outside counsel that a reasonable likelihood exists of a material conflict of interest between the

Indemnifying Party and the Indemnified Party, or (C) the Indemnifying Party has failed to assume the defense and employ counsel; in which case the fees and expenses of the Indemnified Party’s counsel shall be paid by the Indemnifying Party.

(d)The Indemnifying Party may not enter into a settlement or consent to any judgment of any Third-Party Claim without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, delayed or conditioned) unless (i) such settlement or judgment involves monetary damages only, all of which will be paid (subject to the limitations of this Article 9) by the Indemnifying Party and there is no admission of fault or culpability on behalf of any Indemnified Party, and (ii) a term of the settlement or judgment is that the Person or Persons asserting such Third-Party Claim unconditionally and irrevocably release all Indemnified Parties from all liability with respect to such Third-Party Claim.

(e)If any condition in Section 9.4(b) or Section 9.4(c) is or becomes unsatisfied, (i) the Indemnified Party may defend against the Third-Party Claim in any manner it may deem appropriate; provided that the Indemnified Party shall not consent to the entry of any judgment or enter into any settlement with respect to any Third-Party Claim without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld, conditioned or delayed, (ii) to the extent the Indemnifying Party is liable for such Losses under this Article 9, the Indemnifying Party will reimburse the Indemnified Party promptly and periodically (but no less often than monthly) for the costs of defending against the Third-Party Claim, including reasonable fees and expenses of counsel engaged by the Indemnified Party, and (iii) to the extent the Indemnifying Party is liable for such Losses under this Article 9, the Indemnifying Party will remain responsible for any Losses the Indemnified Party may suffer, sustain or become subject to, as result of, arising out of, relating to or in connection with the Third-Party Claim to the fullest extent provided in this Article 9. This Section 9.4 shall not apply to Taxes which shall be governed by Section 6.7(c).

(f)Any claim by an Indemnified Party for indemnification other than indemnification against a Third-Party Claim will be asserted by giving the Indemnifying Party written notice thereof, and the Indemnifying Party will have a period of sixty (60) calendar days within which to respond to such claims. If the Indemnifying Party does not so respond within such sixty (60) calendar day period, the Indemnifying Party will be deemed to have accepted such claim.

9.5Materiality Qualifiers. All qualifications contained in the representations and warranties contained in this Agreement that are based on materiality (including all usages of “material,” “Material Adverse Effect” or similar qualifiers) will be disregarded for purposes of determining whether there is an inaccuracy or breach and for purposes of calculating of the amount of Losses incurred by an Indemnified Party under this Article 9; provided, however that this Section 9.5 shall not apply to the use of the term “Material Adverse Effect” in Section 4.7 or as used in any defined term.

9.6Investigation. An Indemnified Party shall not be entitled to indemnification, payment of Losses or other remedies under Section 9.1(a)(i), Section 9.1(a)(ii), Section 9.2(a)(i) or Section 9.2(a)(ii) based on any inaccuracy or breach of any representation, warranty, covenant or obligation of another Party contained in or made pursuant to this Agreement to the extent such

Indemnified Party had actual knowledge of such inaccuracy or breach prior to the execution and delivery of this Agreement. For purposes of this Section 9.6, “actual knowledge” shall be limited to Knowledge of the Company or the Parent’s Knowledge, as the context requires.

9.7No Right of Contribution. Effective upon the Closing, the Seller Parties waive, and acknowledge and agree that they shall not have and shall not exercise or assert (or attempt to exercise or assert), any right of contribution, right of indemnity or other similar right or remedy against an Acquired Company in connection with any actual or alleged breach of any representation, warranty, covenant or obligation of an Acquired Company or a Seller Party set forth in this Agreement.

9.8Payment.

(a)Each Indemnified Party agrees to take all commercially reasonable actions to mitigate all Losses and to timely make and diligently pursue any claims for insurance with respect to Losses for which it will seek indemnification hereunder. Any indemnification obligation under this Agreement for any Losses shall be reduced by the amount of any insurance proceeds or any indemnity, contribution or other similar payment actually received by the Indemnified Party from any third party with respect thereto, reduced by the amount of any reasonable expenses and increase in applicable premiums/retro-premiums related to the recovery of such proceeds. In the event that any insurance or other recovery is actually recognized or received by any Indemnified Party with respect to any indemnification obligation for which any such Indemnified Party has been indemnified under this Agreement, then a refund equal to the aggregate amount of the recovery (up to the aggregate amount previously paid by the Indemnifying Party in respect of such indemnification obligation) shall be made promptly to the Indemnifying Party, net of any expenses and increase in applicable premiums/retro-premiums related to the recovery of such proceeds.

(b)Payments of all amounts owing by an Indemnifying Party under this Article 9 shall be made within five (5) Business Days upon a final settlement among the Indemnifying Party and the Indemnified Parties or upon a final adjudication determined by a court of competent jurisdiction that an indemnification obligation is owed by the Indemnifying Party to the Indemnified Party under this Article 9.

9.9Adjustment to Consideration. Any indemnification received under this Article 9 shall be treated by Purchaser and the Seller Parties and their respective Affiliates, to the extent permitted by applicable Law, as an adjustment to the consideration received by the Seller Parties.

9.10Exclusive Remedy. Other than the rights of the Parties to seek specific performance, injunctive or other equitable relief, or in the case of Fraud with respect to the Parties’ respective representations and warranties set forth in this Agreement, the provisions of this Agreement set forth the exclusive rights and remedies of the Parties to seek or obtain damages or any other remedy or relief from any Party with respect to matters arising under this Agreement after the Closing.

ARTICLE 10

MISCELLANEOUS

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10.1Successors and Assigns; Assignment. This Agreement, the other Transaction Documents and any other agreement, document or instrument executed and delivered in connection herewith shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign its rights under this Agreement except with the prior written consent of the other Parties, which consent may be given or withheld in such Parties’ sole discretion; provided, however, that (i) Parent or Purchaser may, without the prior consent of the other Parties, (x) assign all or any portion of its rights under this Agreement to any Affiliate and (y) assign its rights and remedies hereunder as collateral security to any bank or financial institution that has loaned funds or otherwise extended credit to it or any of its Affiliates and (ii) the Seller Parties may, without the prior consent of the other Parties, assign all or a portion of its rights to the Earnout Payments to an Affiliate controlled by Seller; provided that, in each case, no such assignment shall relieve the assignor of its liabilities and obligations hereunder.

10.2Notices. Any notice to be given by any Party to this Agreement shall be given in writing and may be effected by personal delivery, overnight courier or e-mail (provided receipt of such email is evidenced by a reply email, excluding automated return receipts), addressed as follows (or by another means approved in writing by a Party pursuant to a notice given in accordance with this Section 10.2):

If to Parent or Purchaser:

	Until January 1, 2022:	Walker & Dunlop, Inc.
		7501 Wisconsin Avenue, Suite 1200E
		Bethesda, Maryland 20814
		Attention:	General Counsel
		E-mail:	RLucas@walkerdunlop.com

	From and after January 1, 2022:	Walker & Dunlop, Inc.
		7272 Wisconsin Avenue, Suite 1300
		Bethesda, Maryland 20814
		Attention:	General Counsel
		E-mail:	RLucas@walkerdunlop.com

with a copy to (which shall not constitute notice):		Arnold & Porter Kaye Scholer LLP
		601 Massachusetts Ave., NW
		Washington, DC 20001
		Attention:	Kevin Lavin, Esq.
		E-mail:	Kevin.Lavin@arnoldporter.com

If to the Acquired Companies
(prior to the Closing):		Attention:	Shawn Horwitz
		21600 Oxnard Street
		Suite 1200
		Woodland Hills, CA 91367

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		E-mail:	shawn.horwitz@alliantcapital.com

with a copy to (which shall not constitute notice):		DLA Piper LLP (US)
		444 W. Lake Street, Suite 900
		Chicago, IL 60606
		Attention:	Robert C. Davis, P.C.
		E-mail:	robert.davis@us.dlapiper.com

If to the Acquired Companies (after the Closing):

	Until January 1, 2022:	WDAAC, LLC
		c/o Walker & Dunlop, Inc.
		7501 Wisconsin Avenue, Suite 1200E
		Bethesda, Maryland 20814
		Attention:	General Counsel
		E-mail:	RLucas@walkerdunlop.com

	From and after January 1, 2022:	WDAAC, LLC
		c/o Walker & Dunlop, Inc.
		7272 Wisconsin Avenue, Suite 1300
		Bethesda, Maryland 20814
		Attention:	General Counsel
		E-mail:	RLucas@walkerdunlop.com

with a copy to (which shall not constitute notice):		Arnold & Porter Kaye Scholer LLP
		601 Massachusetts Ave., NW
		Washington, DC 20001
		Attention:	Kevin Lavin, Esq.
		E-mail:	Kevin.Lavin@arnoldporter.com

If to the Seller Parties:		Attention:	Shawn Horwitz
		21600 Oxnard Street
		Suite 1200
		Woodland Hills, CA 91367
		E-mail:	shawn.horwitz@alliantcapital.com:

with a copy to (which shall not constitute notice):		DLA Piper LLP (US)
		444 W. Lake Street, Suite 900
		Chicago, IL 60606
		Attention:	Robert C. Davis, P.C.
		E-mail:	robert.davis@us.dlapiper.com

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The date of service for any notice sent in compliance with the requirements of this Section 10.2 shall be (i) the date such notice is personally delivered or (ii) the next succeeding Business Day after the date of delivery to the overnight courier if sent by overnight courier or (iii) the next succeeding Business Day after transmission by e-mail (if electronic confirmation of such transmission is received, excluding automated return receipts).

10.3Modification. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment by each Party hereto, or in the case of a waiver by the Party against whom the waiver is to be effective.

10.4Time is of the Essence. Time is of the essence with regard to this Agreement.

10.5Exhibits and Schedules. The Company Disclosure Letter, Parent Disclosure Letter, schedules and exhibits attached shall be deemed to be an integral part hereof.

10.6Entire Agreement. This Agreement, including the Company Disclosure Letter, Parent Disclosure Letter, exhibits and schedules attached hereto and all other Transaction Documents, contains the entire agreement among the Parties pertaining to the transactions contemplated hereby, and fully supersedes all prior agreements and understandings, if any, among the Parties pertaining to such transactions; provided that the Confidentiality Agreement, dated as of November 9, 2020, by and between Purchaser the Alliant Company shall remain in full force and effect until the Closing.

10.7Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect.

10.8Rules of Construction. Interpretation of this Agreement and the other Transaction Documents (except as specifically provided in any such agreement, in which case such specified rules of construction shall govern with respect to such agreement) shall be governed by the following rules of construction: (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms article, section, paragraph, exhibit and schedule are references to the articles, sections, paragraphs, exhibits and schedules to this Agreement unless otherwise specified; (c) references to “$” shall mean U.S. dollars; (d) the word “including” and words of similar import shall mean “including without limitation,” unless otherwise specified; (e) the word “or” shall not be exclusive; (f) provisions shall apply, when appropriate, to successive events and transactions; (g) the headings are for reference purposes only and shall not affect in any way the meaning or interpretation of the applicable agreement; (h) a reference to any Person includes such Person’s successors and permitted assigns; (i) any reference to “days” means calendar days unless Business Days are expressly specified; (j) this Agreement and the other Transaction Documents shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted; (k) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP and (l) the phrase “made available” or any similar phrase refers to the documentation and other information made available to the Purchaser in either the Acquired

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Companies’ iManage share for Easter Users or the data room hosted by Beekman Advisors on or prior to 5:00 p.m. Pacific Time on the Business Day prior to the date of the Agreement.

10.9Binding Effect. This Agreement shall not be binding upon any Party unless and until all Parties have executed this Agreement.

10.10Choice of Law. As part of the consideration and mutual promises being exchanged and given in connection with this Agreement, the Parties agree that all claims, controversies and disputes of any kind or nature arising under or relating in any way to the enforcement or interpretation of this Agreement or to the Parties’ dealings, rights or obligations in connection herewith, including disputes relating to the negotiations for, inducements to enter into, or execution of, this Agreement, and disputes concerning the interpretation, enforceability, performance, breach, termination or validity of all or any portion of this Agreement shall be governed by the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

10.11Consent to Jurisdiction. Each of the Parties irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Delaware Court of Chancery for the purposes of any Litigation arising out of this Agreement or any transaction contemplated hereby (and each agrees that no such Litigation relating to this Agreement shall be brought by it or any of its Affiliates except in such courts). Each of the Parties further agrees that, to the fullest extent permitted by applicable Law, service of any process, summons, notice or document by U.S. registered mail to such Person’s respective address set forth in Section 10.2 shall be effective service of process for any Litigation in Delaware with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law. Each of the Parties hereto irrevocably and unconditionally waives (and agrees not to plead or claim) any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the Delaware Court of Chancery, or that any such Litigation brought in any such court has been brought in an inconvenient forum.

10.12WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 10.12.

10.13Survival of Covenants. The covenants of the Parties to be performed subsequent to Closing shall survive Closing for the periods stated therein or, if no period is stated, until they have been fully performed.

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10.14No Third Party Beneficiaries. This Agreement is not intended to, and shall not, confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns, except as otherwise expressly provided in Section 6.19 and Article 9. The representations and warranties in this Agreement are the product of negotiations among the Parties and are for the sole benefit of the Parties. Any inaccuracies in such representations and warranties are subject to waiver by the Parties in accordance with Section 10.3 without notice or liability to any other Person. The representations and warranties in this Agreement represent an allocation among the Parties of risks associated with particular matters, regardless of the knowledge of any of the Parties. Except as otherwise expressly provided in Article 9, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

10.15Counterparts. This Agreement may be executed in one or multiple counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one such counterpart in proving the existence of terms of this Agreement.

10.16Electronic Execution and Delivery. A facsimile, PDF or other reproduction of this Agreement may be executed by one or more Parties, and an executed copy of this Agreement may be delivered by one or more Parties by facsimile, e-mail or other electronic transmission device pursuant to which the signature of or on behalf of such Party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any Party, all Parties agree to execute an original of this Agreement as well as any facsimile or reproduction thereof. The Parties hereby agree that neither shall raise the execution of facsimile, PDF or other reproduction of this Agreement, or the fact that any signature or document was transmitted or communicated by facsimile, e-mail or other electronic transmission device, as a defense to the formation of this Agreement.

10.17Specific Performance. The Parties acknowledge that their obligations hereunder are unique and that remedies at law, including monetary damages, will be inadequate in the event any Party should default in or breach the performance of its obligations under this Agreement. Accordingly, in the event of any such breach, the non-defaulting, non-breaching Parties shall be entitled to equitable relief, without the proof of actual damages, including in the form of an injunction or injunctions or orders for specific performance to prevent defaults and breaches of this Agreement and to order the defaulting or breaching party to affirmatively carry out its obligations under this Agreement, and such defaulting or breaching Party hereby waives any defense to the effect that a remedy at law would be an adequate remedy for such breach or that an award of specific performance is not an appropriate remedy for any reason of law or equity. Such equitable relief shall be in addition to any other remedy to which the Parties are entitled to at law or in equity as a remedy for such default, breach or threatened breach. Each Party hereby waives any requirements for the securing or posting of any bond or other security or showing actual damages in connection with such equitable remedy. The foregoing shall not be deemed to be or construed as a waiver or election of remedies by any Party, each of which expressly reserve any and all rights and remedies available to it at law or in equity in the event of any breach or default by the other Parties under this Agreement.

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10.18Expenses. Except for those expenses specifically allocated to a Party pursuant to the terms of this Agreement, (a) the Seller Parties hereby agree that all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the Transaction Documents and the transactions contemplated hereby and thereby on behalf of the Seller Parties and/or the Acquired Companies prior to the Closing shall be paid by the Seller Parties, whether or not the Closing shall have occurred or this Agreement is terminated and (b) Purchaser hereby agrees that all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the Transaction Documents and the transactions contemplated by hereby and thereby on behalf of Purchaser shall be paid by Purchaser, whether or not the Closing shall have occurred or this Agreement is terminated.

10.19Adjustments. Without limiting the other provisions of this Agreement, references to numbers of shares and prices per share of Parent Common Stock contained in this Agreement shall be appropriately adjusted, without duplication, to reflect the effect of any stock splits, reverse stock splits, stock dividends (including any dividend or distribution of securities convertible into Parent Common Stock), reorganizations, recapitalizations, reclassifications, stock combinations, exchange of shares or other similar transactions with respect to the number of shares of Parent Common Stock outstanding that occur after the date of this Agreement.

[Signatures follow]

106

IN WITNESS WHEREOF, the Parties have executed this Purchase Agreement as of the date first above written.

	PARENT:

	WALKER & DUNLOP, INC.

	By:	/s/ William M. Walker
	Name:	William M. Walker
	Title:	Chairman & Chief Executive Officer

	PURCHASER:

	WDAAC, LLC

	by its sole member, Walker & Dunlop, Inc.

	By:	/s/ William M. Walker
	Name:	William M. Walker
	Title:	Chairman & Chief Executive Officer

[Signature page to Purchase Agreement]

	SELLER PARTIES:

	ALLIANT, INC.,
	a Florida corporation

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz
	Title:	Chief Executive Officer

	ALLIANT ADC, INC.,
	a California corporation

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz
	Title:	Chief Executive Officer

	PALM DRIVE ASSOCIATES, LLC,
	a Delaware limited liability company

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz
	Title:	Manager

	SHAWN HORWITZ

	/s/ Shawn Horwitz

[Signature page to Purchase Agreement]

FIRST TIER ACQUIRED COMPANIES:

THE ALLIANT COMPANY, LLC,
a Florida limited liability company

	By:	ALLIANT, INC., a Florida corporation
		its manager

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

ALLIANT CAPITAL, LTD.,
a Florida limited partnership

	By:	ALLIANT, INC., a Florida corporation,
		its general partner

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

ALLIANT FUND ASSET HOLDINGS, LLC,
a Delaware limited liability company

	By:	ALLIANT, INC., a Florida corporation,
		its manager

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

[Signature page to Purchase Agreement]


ALLIANT ASSET MANAGEMENT COMPANY, LLC,
a California limited liability company

	By:	ALLIANT CAPITAL, LTD., a Florida
		limited partnership
		its member

	By:	ALLIANT, INC., a Florida corporation
		its general partner

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

ALLIANT STRATEGIC INVESTMENTS II, LLC,
a Delaware limited liability company

	By:	PALM DRIVE ASSOCIATES, LLC,
		a Delaware limited liability company
		its manager

		By:	ALLIANT, INC., a Florida
			corporation
			its general partner

		By:	/s/ Shawn Horwitz
		Name:	Shawn Horwitz,
			Chief Executive Officer

ADC COMMUNITIES, LLC,
a Florida limited liability company,

	By:	ALLIANT II, INC.
		a Florida corporation, its manager

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

[Signature page to Purchase Agreement]

ADC COMMUNITIES II, LLC,
a California limited liability company

	By:	ALLIANT ADC, INC., a California
		corporation
		its manager

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz,
		Chief Executive Officer

AFAH FINANCE, LLC,
a Delaware series limited liability company

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz, Chief Executive Officer

ALLIANT FUND ACQUISITIONS, LLC,
a Florida limited liability company

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz, Chief Executive Officer

VISTA RIDGE 1, LLC,
a California limited liability company

	By:	/s/ Shawn Horwitz
	Name:	Shawn Horwitz, Chief Executive Officer

[Signature page to Purchase Agreement]

SCHEDULE A

Company Net Working Capital

SCHEDULE B

Calculation of Cash Flow – 2019 and 2020 Exhibits

SCHEDULE C

Third Party Consents

SCHEDULE D

Permitted Mortgages and Guarantees

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William M. Walker, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: November 4, 2021	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen P. Theobald, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Walker & Dunlop, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: November 4, 2021	By:	/s/ Stephen P. Theobald
		Stephen P. Theobald
		Executive Vice President and Chief Financial Officer

EXHIBIT 32

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Walker & Dunlop, Inc. for the quarterly period ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of Walker & Dunlop, Inc., hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Walker & Dunlop, Inc.


Date: November 4, 2021	By:	/s/ William M. Walker
		William M. Walker
		Chairman and Chief Executive Officer


Date: November 4, 2021	By:	/s/ Stephen P. Theobald
		Stephen P. Theobald
		Executive Vice President and Chief Financial Officer