Exhibit 10.1

 

STATE OF TEXAS    X    X COUNTY OF TAYLOR    X

AGREEMENT FOR FINANCIAL ASSISTANCE

ADDENDUM A

This Addendum A is dated the 6th day of June, 2006 by and between the
Development Corporation of Abilene, Inc. (“DCOA”), a Texas corporation formed
pursuant to Tex. Civ. Stat. Ann. Art. 5190.6, and Transcend Services, Inc.
(“Transcend”), a Delaware corporation, authorized to do business in the State of
Texas, with headquarters located at 945 East Paces Ferry Road, Suite 1475,
Atlanta, GA, 30326-6629.

WITNESSETH:

That for and in consideration of the covenants, promises, and agreements set
forth herein, it is mutually agreed as follows:

 

I. PURPOSE

DCOA is authorized by the Development Corporation Act of 1979 to provide
financial assistance to private corporations in order to facilitate the
retention or expansion of primary employment or to attract major investment that
would contribute to the economic development of the City of Abilene. DCOA shall
act through its agent, the Chief Executive Officer, or his duly authorized
representative, unless otherwise stated in this Addendum.

DCOA and Transcend wish to amend the Agreement for Financial Assistance dated
the 1st day of March, 2005. Pursuant to this Addendum A, DCOA wishes to change
the terms for earning principal reductions on the first $1,000,000 loan
authorized in the Agreement and evidenced by a Promissory Note dated March 1,
2005 in the amount of $1,000,000, DCOA Loan No. Trans760. This Addendum A is
effective March 1, 2005. Transcend opened its Abilene office at 500 Chestnut
St., Ste. 1100, and the Note was fully funded in early April, 2005. With the
recent purchase of another Texas transcription company, the Abilene location is
designated as the Regional Headquarters for Transcend, serving the state of
Texas.

 

II. DUTIES

 

  A. DCOA shall:

 

  1. Provide a loan of One Million and no/100’s Dollars ($1,000,000) to offset
start-up costs, first year operating losses and to support creation of 104 new
jobs.

The loan will be for five years at 0% interest. The note will be secured by
current and future furniture and equipment in the Abilene, Texas, and Atlanta,
Georgia operations at 50% of depreciated value and a letter of credit in the
amount of $150,000 issued by the Bank of America.

Principal reductions will be earned by Transcend as follows:

 

  a.) At an accelerated rate of $25,000 per month for the first 6 months, and
for the first fifteen (15) employees hired for a total principal reduction of
$150,000 and release of the letter of credit referenced above, and,

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  b) A training credit will be applied to the outstanding principal balance no
more often than quarterly at the rate of 50% of the total wages paid to newly
hired Medical Language Specialists (MLS) (who have successfully completed
Transcend’s new hire training program lasting 1 to 2 days) during a probationary
period beginning with the hire date and typically ending 90 days after the hire
date (unless extended by Transcend). Credit shall be applied in an amount not to
exceed $4,000 per MLS upon certification by Transcend that the MLS has completed
the probationary period.

 

  c) Additional annual reductions will be earned at the rate of 1/3 the DCOA
Assistance per New Job amount listed in the table below for each FTE created in
excess of the first 15. (See below for definition of FTE).

FTE is defined differently for MLS and non-MLS employees:

 

  •   MLS – All salaries plus Transcend-paid health benefits shall be totaled
for a 12-month period and divided by $30,000.

 

  •   Non-MLS – All hours worked during a 12-month period shall be totaled and
divided by 2080, including all paid leave and excluding any overtime.

 

  2. Provide a second loan of One Million and no/100’s Dollars ($1,000,000) to
support the creation of an additional 104 new jobs, payable upon Transcend
hiring its 105th employee. Transcend shall certify in writing to the creation of
at least 104 new jobs before additional loan funds will be advanced.

The loan will be for five years at 0% interest. The note will be secured by a
letter of credit issued by the Bank of America, or another form of security
acceptable to both parties.

Principal reductions will be earned by Transcend and applied annually at the
rate of 1/3 of the DCOA Assistance per New Job amount listed below for each
additional FTE created and/or retained. The letter of credit may be reduced
annually to match the outstanding principal balance of the loan.

FTE is defined differently for MLS and non-MLS employees:

 

  •   MLS – All salaries plus Transcend-paid health benefits shall be totaled
for a 12-month period and divided by $30,000.

 

  •   Non-MLS – All hours worked during a 12-month period shall be totaled and
divided by 2080, including all paid leave and excluding any overtime.

Addendum A to Agreement For Financial Assistance

DCOA – Transcend Services, Inc.

Page 2 of 4

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Projected New Positions

  

Pay Scale plus

Health Benefits

   DCOA
Assistance
per New
Job    

Total DCOA

Assistance-New
Jobs

2

   $20 to $30,000yr    $ 0     $ 0

200 MLS

   $30,000/yr and greater    $ 9,535     $ 1,907,000

1

   $30 to $40,000/yr    $ 9,000     $ 9,000

6

   $40 to $50,000/yr    $ 12,500     $ 75,000

4

   $50 to $60,000    $ 16,000     $ 64,000    Over $60,000      35 %   $        
           

213

   Total      —       $ 2,055,000.00                  

The job creation period for the first loan is five years and begins April 1,
2005 and ends March 31, 2010. Annual job certifications shall be made by
Transcend within 60 days of the end of each anniversary of the job creation
period, and DCOA shall make principal reductions based on FTE’s certified in the
salary ranges listed above and/or as defined for an MLS above

The job creation period for the second loan is five years beginning April 1 of
the year in which the loan is advanced. Annual certifications shall be made by
Transcend within 60 days of the end of each anniversary of the job creation
period, and DCOA shall make principal reductions based on FTE’s certified in the
salary ranges listed above and/or as defined for an MLS above.

Non-MLS minimum compensation levels indicated in the above table must be met for
each position after 1 year to receive the corresponding credit, and may include
any non-mandatory benefits provided the employee by Transcend (i.e. health
insurance, retirement). The Non-MLS minimum compensation levels must also be
maintained or exceeded for each employee throughout the three-year term.

If any new FTEs are created during years two and three of either job loan
period, the prorated credit will be extended up to two additional years to allow
Transcend to realize the full benefit of the incentive for each FTE created.

Items 3. through 5. shall remain unchanged.

 

  B. Transcend shall:

 

  1. Create a minimum of 213 FTEs at the Facility during the job creation period
described in Section II, A., 2., above, and declare the Abilene office as
Regional Headquarters for Transcend.

 

  2. Annually, by May 31st, certify in writing to DCOA the number of employment
positions which have been created and/or retained at the Facility during the 12
months ended March 31st. All lists submitted shall contain the number of persons
employed at the Facility by Transcend; the names and addresses of those persons;
the number of hours each employee worked during the previous

Addendum A to Agreement For Financial Assistance

DCOA – Transcend Services, Inc.

Page 3 of 4

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12 months; and the cumulative payroll for the Abilene operation. Upon written
request by DCOA, Transcend shall provide an interim report with the number of
employment positions retained (for statistical use only).

Items 3. through 15. shall remain unchanged.

 

III. CONTINUATION OF ORIGINAL AGREEMENT

Except as set forth above, the Agreement shall remain in effect for all other
purposes.

 

IV. AGREEMENT

This Addendum A and the Agreement, and all relevant loan documents between the
two parties herein, shall constitute the sole agreements between DCOA and
Transcend relating to the objects of the agreements, and correctly set forth the
complete rights, duties, and obligations of each party to the other as of its
date. The relevant loan documents and Agreement are incorporated into this
Addendum for all purposes. Any prior agreements including the Non-Disclosure
Agreement, promises, negotiations or representations, verbal or otherwise, not
expressly set forth in this Addendum, the Agreement or the relevant loan
documents are of no effect.

 

Transcend Services Inc.     Development Corporation of Abilene, Inc.

/s/ Larry Gerdes

   

/s/ Richard Burdine

Name:   Larry Gerdes, Chief Executive Officer     Richard Burdine, Chief
Executive Officer Date:   6/1/06     Date:   6/2/06 ATTEST:     ATTEST: By:  

/s/ Lance Cornell

    By:  

/s/ Kim Tarrant

Title   Lance Cornell, CFO       Kim Tarrant, Contracts Administrator Corporate
Seal:     APPROVED:    

[ILLEGIBLE]

    City Attorney

Addendum A to Agreement For Financial Assistance

DCOA - Transcend Services, Inc.

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