Document:

Exhibit

Exhibit 10.1

PERSONAL AND CONFIDENTIAL
February 16, 2016

James R. Arnold

 Re:    Employment Offer Letter
Dear Mr. Arnold:
On behalf of Quality Systems, Inc. (“QSI”), I am pleased to extend to you an offer of employment to join QSI in the full-time position of Chief Financial Officer.  This letter will convey the proposed terms and conditions of your employment with QSI.  In addition to the other items specified in paragraph 12 below, this offer is conditioned upon final approval by QSI’s Board of Directors (the “Board”).
Following your acceptance of these terms and subject to satisfaction of the other conditions specified herein, your employment start date will be March 1, 2016.  Your title will be Chief Financial Officer, and subject to necessary business travel requirements, you will perform your employment duties as a full time employee at QSI’s corporate offices located in Irvine, California.  You will report directly to John (“Rusty”) Frantz, the Chief Executive Officer of QSI, and your duties and responsibilities will be commensurate with your title.  
The terms and conditions of your employment with QSI are summarized below:
		
	1.
	You will receive an initial base salary of $400,000 per year ($16,667.00 semi-monthly), payable in accordance with QSI’s normal payroll practices and subject to all legally required deductions.  This base salary amount will not decrease unless other similarly situated QSI employees are subject to a proportional decrease. 

		
	2.
	You will be eligible to receive a 2016 fiscal year cash bonus opportunity of 60% of your base salary, subject to QSI’s attainment of the financial objectives and achievement of certain performance targets established under the 2016 Executive Compensation Program previously approved by QSI’s Compensation Committee, provided that you continue to be employed by QSI on the date such bonus is payable.  Any bonus payable for QSI’s 2016 fiscal year will be pro-rated for the number of full months of your employment during such fiscal year.  The target percentage for the 2016 fiscal year cash bonus will not decrease unless other similarly situated QSI employees are subject to a proportion decrease.    

James R. Arnold
February 16, 2016
2

		
	3.
	On your first day of employment, you will receive a non-qualified stock option grant to purchase 250,000 shares of QSI’s common stock (the “Options”).  The Options will have an exercise price equal to the closing price of a share of QSI common stock on the date of grant, a term of eight years from the date of grant, and will vest in equal, annual, 25% installments over a four-year period beginning on the one-year anniversary of the date of grant. 

		
	4.
	On your first day of employment, you will also receive a one-time inducement grant of 72,700 shares of restricted QSI common stock (the “Inducement Grant,” and collectively with the Options, the “Equity Grants”).  The Inducement Grant will have a grant price equal to the closing price of a share of QSI common stock on the date of grant, and will vest in three, annual, one-third installments over a three-year period beginning on the one-year anniversary of the grant date.  Any unvested portion of the Inducement Grant shall accelerate and vest in full if you are terminated without Cause or in the event of your termination in connection with a change of control, as specified below.  Cause will have the meaning given in the terms and provisions of QSI’s 2015 Equity Incentive Plan (the “2015 Incentive Plan”).  The Equity Grants will be (i) issued pursuant to the terms and provisions of the 2015 Incentive Plan and QSI’s standard forms of option grant and restricted stock grant award agreements, and (ii) subject to accelerated vesting in full in accordance with the “double trigger” change of control provisions of the 2015 Incentive Plan and QSI’s standard forms of option grant and restricted stock grant award agreements.

		
	5.
	If any payment or benefit you would receive pursuant to paragraph 4 in connection with a change of control or other similar transaction (a “280G Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this paragraph 5, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment (a “Payment”) shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).  Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or eliminated) 

James R. Arnold
February 16, 2016
3

before Payments that are not deferred compensation within the meaning of Section 409A of the Code. In the event that accelerated vesting of equity awards is to be reduced, such accelerated vesting shall be cancelled in the reverse order of the date of grant for your equity awards. If two or more equity awards are granted on the same day, the equity awards will be reduced on a pro-rata basis. For the avoidance of doubt, you shall not have any discretion as to the ordering of any such Reduction Method or Pro Rata Reduction Method.  The accounting firm engaged by QSI for general tax compliance purposes as of the day prior to the effective date of the change of control transaction triggering the Payment shall perform the foregoing calculations. If the accounting firm so engaged by QSI is serving as accountant or auditor for the individual, entity or group effecting the change of control transaction, QSI shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  You and QSI shall provide the accounting firm with such information as the accounting firm may reasonably request in order to make the determinations hereunder. QSI shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The accounting firm’s determinations shall be final and binding on you and QSI.  If you receive a Payment for which the Reduced Amount was determined pursuant to clause (x) of this paragraph 5 and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you shall promptly return to QSI a sufficient amount of the Payment after reduction pursuant to clause (x) of this paragraph 5 so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of this paragraph 5, you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
		
	6.
	To align your interests with those of QSI’s shareholders, you will be required to comply with the terms and conditions of QSI’s Executive Stock Ownership Program and to acquire and hold the minimum number of shares of QSI common stock set forth in such policy.

		
	7.
	You will be entitled to accrue three weeks of vacation time per year, which may be used in accordance with QSI’s current policy as described in the Employee Handbook. Pursuant to QSI’s current policy, you will be entitled to accrue a maximum of four weeks of paid vacation leave.

		
	8.
	You will be eligible for executive relocation or coverage for a corporate apartment in an amount not to exceed $54,000 annually.

		
	9.
	You will be eligible for group insurance coverage (with a participant eligibility date to be determined by the plan documents currently in effect), together with such other employment benefits generally made available to other similarly situated QSI employees.

		
	10.
	By undertaking employment with QSI, you agree to abide by all current and future employment policies, rules and regulations of QSI.  You also acknowledge that your position with QSI is a full-time position, and accordingly, you agree that you will not accept, during your employment with QSI, employment with any other person or entity without the prior written consent of QSI’s Chief Executive Officer.  As with all QSI employees, on your first day of employment, you will be required to execute (i) an Acknowledgement and Certification of your receipt of, and agreement with, QSI’s Employee Handbook and (ii) QSI’s Proprietary Information and Inventions Agreement, which, among other things, requires you to protect QSI’s confidential information and includes certain non-solicitation provisions.  As required by the Immigration Reform and Control Act of 1986 (“IRCA”), you also must establish your identity and authorization to work in the United States.  Attached is a copy of the 

James R. Arnold
February 16, 2016
4

Employment Verification Form (I-9), with instructions required by IRCA.  Please review this document and plan to bring the appropriate original documentation on your first day of work.  
		
	11.
	You and QSI expressly understand and agree that your employment with QSI is in all respects “at will,” meaning that either you or QSI can terminate the employment relationship at any time without advance notice to the other, with or without Cause, for any reason or no reason.  QSI also can discipline, demote or alter the terms of employment of its employees at any time, with or without Cause or advance notice.  This letter and the employment documents referenced in preceding paragraph 10 will be our entire understanding concerning the subjects contained herein (including the at-will nature of your employment and the possible termination of the employment relationship), and QSI’s policy of at-will employment cannot be changed or modified in any way except that it may be superseded by one or more written agreements between you and QSI, authorized in advance by specific resolution of the Board and signed by both you and QSI’s Chief Executive Officer.

		
	12.
	This offer is conditioned upon:  (i) final approval of your offer for employment and the terms of this offer letter by the Board, (ii) the Board’s satisfaction with the results of a background check to be performed on behalf of QSI, (iii) your written acceptance of this offer letter, and (iv) your execution of the Agreement for Protection of Company Information and other documents described in paragraph 10.  If you provide materially false or misleading information in your employment application or other documents submitted in connection with your seeking employment with QSI, you will be subject to immediate termination.  

I am delighted with the prospect of you joining QSI, and we all look forward to you making a tremendous contribution to the company.

	
	
	Very truly yours,

	/s/ John R. Frantz

	John R. Frantz

	Chief Executive Officer

	
	
	AGREED TO AND ACCEPTED BY:

	/s/ James R. Arnold

	James R. ArnoldExhibit 10.1

 

SEVENTH AMENDMENT TO

 

AMENDED AND RESTATED $650,000,000 WAREHOUSING CREDIT

 

AND SECURITY AGREEMENT

 

among

 

WALKER & DUNLOP, LLC

 

as Borrower,

 

WALKER & DUNLOP, INC.

 

as Parent,

 

and

 

THE LENDERS PARTY HERETO,

 

PNC BANK, NATIONAL ASSOCIATION,

 

as Administrative Agent

 

and

 

PNC CAPITAL MARKETS LLC,

 

as Lead Arranger and Sole Bookrunner

 

Effective as of February 12, 2016

 

 

SEVENTH AMENDMENT TO AMENDED AND RESTATED WAREHOUSING CREDIT

AND SECURITY AGREEMENT

 

THIS SEVENTH AMENDMENT TO AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT (this “Seventh Amendment”) is made effective as of the 12th day of February, 2016, by and among WALKER & DUNLOP, LLC, a Delaware limited liability company (“Borrower”), WALKER & DUNLOP, INC., a Maryland corporation (“Parent”), the lenders party to the Credit Facility Agreement defined below (the “Lenders”) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as Administrative Agent for the Lenders under the Credit Facility Agreement (hereinafter referred to in such capacity as the “Administrative Agent”).

 

R E C I T A L S

 

WHEREAS, the Lenders and Borrower are parties to that certain Amended and Restated Warehousing Credit and Security Agreement, dated as of June 25, 2013, by and among Borrower, Parent, the Lenders and the Administrative Agent (the “Original Credit Facility Agreement”), as amended by that certain First Amendment to Amended and Restated Warehousing Credit and Security Agreement, dated as of December 20, 2013 (the “First Amendment”), that certain Second Amendment to Amended and Restated Warehousing Credit and Security Agreement, effective as of June 17, 2014 (the “Second Amendment”), that certain Third Amendment to Amended and Restated Warehousing Credit and Security Agreement, effective as of August 26, 2014 (the “Third Amendment”), that certain Fourth Amendment to Amended and Restated Warehousing Credit and Security Agreement, effective as of June 17, 2015 (the “Fourth Amendment”), and that certain Fifth Amendment to Amended and Restated Warehousing Credit and Security Agreement, effective as of October 26, 2015 (the “Fifth Amendment”, and that certain Sixth Amendment to Amended and Restated Warehousing Credit and Security Agreement, effective as of December 24, 2015 (the “Sixth Amendment” and the Original Credit Facility Agreement, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and Sixth Amendment, is herein referred to as the “Credit Facility Agreement”), whereby upon the satisfaction of certain terms and conditions set forth therein, the Lenders agreed to make Warehousing Advances from time to time, up to the Warehousing Credit Limit (each such term as defined in the Credit Facility Agreement).

 

WHEREAS, Borrower has requested, and the Administrative Agent and the Lenders have agreed, pursuant to the terms hereof, to modify certain terms of the Credit Facility Agreement as set forth in this Seventh Amendment.

 

NOW, THEREFORE, for and in consideration of the premises, the mutual entry of this Seventh Amendment by the parties hereto and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

 

Section 1.              Recitals.  The Recitals are hereby incorporated into this Seventh Amendment as a substantive part hereof.

 

 

Section 2.              Definitions.  Terms used herein and not otherwise defined shall have the meanings set forth in the Credit Facility Agreement.

 

Section 3.              Amendments to Credit Facility Agreement.  The Credit Facility Agreement is hereby amended as follows:

 

(a)           Section 7.16 of the Credit Facility is hereby amended by adding the following provision to the end thereof:

 

“Notwithstanding the previous sentence to the contrary, as it relates solely to that certain portfolio of 78 seniors housing Mortgage Loans in the aggregate principal amount of $1,270,335,000.00 originated by Borrower and to be sold by Borrower to Freddie Mac (collectively, the “Holiday Portfolio Mortgage Loans”), if Freddie Mac has not purchased the Holiday Portfolio Mortgage Loans, and Borrower has not repaid the Warehousing Advance relating to the Holiday Portfolio Mortgage Loans on or before February 29, 2016, Borrower shall immediately cause the Administrative Agent to be named as an additional insured under the property insurance policy covering the property which is collateral for the Holiday Portfolio Mortgage Loans.”

 

(b)           From and after the date of this Seventh Amendment, Schedule I to the Credit Facility Agreement shall be deleted in its entirety and replaced with the new Schedule I attached hereto and incorporated herein by reference.

 

(c)           The following defined term set forth in Section 13.1 of the Credit Facility Agreement is hereby deleted in its entirety and replaced with the following:

 

‘“Daily LIBO Rate” for any day shall mean, the rate per annum determined by the Administrative Agent by dividing (a) the Published Rate by (b) a number equal to 1.00 minus the LIBOR Reserve Percentage, provided, however, if the Daily LIBO Rate determined as provided above would be less than zero, then such rate shall be deemed to be zero.’

 

‘“Warehousing Credit Limit” means Six Hundred Fifty Million Dollars ($650,000,000); provided, however, that from and after the date of the Sixth Amendment, it shall be temporarily increased to One Billion Nine Hundred Million Dollars ($1,900,000,000) and such increase shall remain in effect until February 29th, 2016.’

 

Section 4.              Ratification, No Novation, Effect of Modifications.  Except as may be amended or modified hereby, the terms of the Credit Facility Agreement are hereby ratified, affirmed and confirmed and shall otherwise remain in full force and effect.  Nothing in this Seventh Amendment shall be construed to extinguish, release, or discharge or constitute, create or effect a novation of, or an agreement to extinguish, release or discharge, any of the obligations, indebtedness and liabilities of Borrower or any other party under the provisions of the Credit Facility Agreement or any of the other Loan Documents, unless specifically herein provided.

 

2

 

Section 5.              Amendments.  This Seventh Amendment may be amended or supplemented by and only by an instrument executed and delivered by each party hereto.

 

Section 6.              Waiver.  The Lenders shall not be deemed to have waived the exercise of any right which they hold under the Credit Facility Agreement unless such waiver is made expressly and in writing (and no delay or omission by any Lender in exercising any such right shall be deemed a waiver of its future exercise).  No such waiver made as to any instance involving the exercise of any such right shall be deemed a waiver as to any other such instance, or any other such right.  Without limiting the operation and effect of the foregoing provisions hereof, no act done or omitted by any Lender pursuant to the powers and rights granted to it hereunder shall be deemed a waiver by any Lender of any of its rights and remedies under any of the provisions of the Credit Facility Agreement, and this Seventh Amendment is made and accepted without prejudice to any of such rights and remedies.

 

Section 7.              Governing Law.  This Seventh Amendment shall be given effect and construed by application of the law of the Commonwealth of Pennsylvania.

 

Section 8.              Headings.  The headings of the sections, subsections, paragraphs and subparagraphs hereof are provided herein for and only for convenience of reference, and shall not be considered in construing their contents.

 

Section 9.              Severability.  No determination by any court, governmental body or otherwise that any provision of this Seventh Amendment or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (i) any other such provision or (ii) such provision in any circumstance not controlled by such determination.  Each such provision shall be valid and enforceable to the fullest extent allowed by, and shall be construed wherever possible as being consistent with, applicable law.

 

Section 10.            Binding Effect.  This Seventh Amendment shall be binding upon and inure to the benefit of the Administrative Agent, the Borrower, the Parent, the Lenders, and their respective permitted successors and assigns.

 

Section 11.            Counterparts.  This Seventh Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

3

 

IN WITNESS WHEREOF, each of the parties hereto have executed and delivered this Seventh Amendment under their respective seals as of the day and year first written above.

 

	
 
    	
WALKER &   DUNLOP, LLC, as Borrower
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Stephen P. Theobald
    
	
 
    	
Name:
    	
Stephen   P. Theobald
    
	
 
    	
Title:
    	
Executive   Vice President, Chief Financial Officer & Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WALKER &   DUNLOP, INC., as Parent
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Stephen P. Theobald
    
	
 
    	
Name:
    	
Stephen   P. Theobald
    
	
 
    	
Title:
    	
Executive   Vice President, Chief Financial Officer & Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PNC   BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   Administrative Agent and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Donald Thomas
    
	
 
    	
Name:   
    	
Donald   Thomas
    
	
 
    	
Title:   
    	
AVP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael Genay
    
	
 
    	
Name:   
    	
Michael   Genay
    
	
 
    	
Title:   
    	
Director
    

 

Signature Page  -  Seventh Amendment to Amended and Restated Warehousing Credit and Security Agreement

 

 

Schedule I

 

List of Lenders and Lenders’ Warehousing Commitments

 

	
Lender
    	
 
    	
Warehousing Commitment
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
PNC   Bank, National Association
    	
 
    	
$
    	
450,000,000.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Wells   Fargo Bank, National Association
    	
 
    	
$
    	
200,000,000.00
    	
 
    

 

Notwithstanding the foregoing, from and after the date of the Sixth Amendment and remaining in effect until February 29, 2016, the Warehousing Commitment Amount for each Lender (and the corresponding percentages of each Lender to such Warehousing Commitment Amounts) shall be temporarily increased to the dollar amount designated opposite such Lender’s name below.

 

Temporary Increase of Warehousing Commitment

 

List of Lenders and Lenders’ Temporary Increased Warehousing Commitments

 

	
Lender
    	
 
    	
Temporary Increased Warehousing
   Commitment
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
PNC   Bank, National Association
    	
 
    	
$
    	
1,300,000,000.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Wells   Fargo Bank, National Association
    	
 
    	
$
    	
600,000,000.00

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