Document:

Amendment No. 2 Dated March 1, 2005 to Business Loan Agreement

 Exhibit 4.1 
 

 
  
 AMENDMENT NO. TWO TO LOAN
DOCUMENTS 
  
 This Amendment No. Two (the
“Amendment”) dated as of March 1, 2005, is between Bank of America, N.A. (“Lender”) and Transcend Services, Inc. (“Borrower”). 
  
 RECITALS 
  
 A. Borrower has executed various documents concerning credit extended by the Lender, including, without limitation, the following documents (the
“Loan Documents”): 
  
 1. A certain
Loan Agreement dated as of March 8, 2004 and amended on January 31, 2005 (together with any previous amendments, the “Loan Agreement”). 
  
 B. Lender and Borrower desire to amend the Loan Documents. 
  
 AGREEMENT 
  
 1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Loan Documents. 
  
 2. Amendments to Loan Agreement. The Loan Agreement is hereby amended
as follows: 
  
 (a) The following paragraph is
hereby added immediately following the paragraph entitled “Affirmative Covenants”: 
  
 Unencumbered Liquid Assets. Borrower shall hold Unencumbered Liquid Assets having an aggregate market value of not less than Six
Hundred Fifty Thousand Dollars ($650,000.00). However, once the standalone letter of credit for $150,000.00 has expired, the minimum requirement will be lowered to Five Hundred Thousand Dollars ($150,000.00). For the purposes of this Agreement,
“Unencumbered Liquid Assets” shall mean the following assets owned by Borrower (excluding assets of any retirement plan) which (i) are not the subject of any lien, pledge, security interest or other arrangement with any creditor to have
his claim satisfied out of the asset (or proceeds thereof) prior to the general creditors of Borrower, and (ii) may be converted to cash within five (5) days: (a) Cash or cash equivalents held in the United States; (b) United States Treasury or
governmental agency obligations which constitute full faith and credit of the United States of America; (c) Commercial paper rated P-1 or A1 by Moody’s or S&P, respectively; (d) Medium and long-term securities rated investment grade by one
of the rating agencies described in (c) above; (e) Eligible Stocks; (f) Mutual funds quoted in The Wall Street Journal which invest primarily in the assets described in (a) - (e) above. For purposes of this Agreement: “Eligible Stocks”
shall include any common or preferred stock which (i) is not subject to statutory or contractual restrictions on sales, (ii) is traded on a U.S. national stock exchange or included in the National Market tier of NASDAQ and (iii) has, as of the close
of trading on the applicable exchange (excluding after hours trading), a per share price of at least Fifteen Dollars ($15). 
  
 3. Representations and Warranties. When Borrower signs this Amendment, Borrower represents and warrants to Lender that: (a) there is no event which
is, or with notice or lapse of time or both would be, a default under the Loan Documents except those events, if any, that have been disclosed in writing to Lender or waived in writing by Lender, (b) the representations and warranties in the Loan
Documents are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment does not conflict with any law, agreement, or obligation by which Borrower is bound, and (d) this Amendment is within Borrower’s
powers, has been duly authorized, and does not conflict with any of Borrower’s organizational papers. 
  

 1 

 4. Conditions. This Amendment will be effective when Lender receives the following items, in form
and content acceptable to Lender: 
  
 (a)
Evidence that the execution, delivery, and performance by Borrower of this Amendment and any instrument or agreement required under this Amendment have been duly authorized. 
  
 (b) Payment by Borrower of a loan fee in the amount of Two Thousand Five Hundred Dollars ($2,500.00).

  
 5. Effect of Amendment. Except as provided in this
Amendment, all of the terms and conditions of the Loan Documents shall remain in full force and effect. 
  
 6. Counterparts. This Amendment may be executed in counterparts, each of which when so executed shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. 
  
 7. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY
COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C)
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERANDINGS OF THE PARTIES. 
  
 This Amendment is executed as of the date stated at the beginning of this
Amendment. 
  

									
	 Borrower:
	 	 	 	 Lender:

			
	 Transcend Services, Inc.
	 	 	 	 Bank of America, N.A.

					
	 By
	 	 /s/ Larry G.
Gerdes                                       
     (Seal)
	 	 	 	 By
	 	 
	 Larry G. Gerdes, Chief Executive Officer
	 	 	 	 Scott Yost, Senior Vice President

  

 2 

 

 
  
 PROMISSORY NOTE 
  

							
	Borrower:	  	 Transcend Services, Inc.
 945 East Paces Ferry Rd., Suite
1475
 Atlanta, GA 30326
	  	Lender:	  	 Bank of America, N.A.
 CCS-Commercial Banking

FL9-100-03-15
 600 Peachtree St. NE
 Atlanta, GA 30308

  

							
	Principal Amount:	  	$2,000,000.00	  	Date of Note:	  	March 1, 2005

  
 PROMISE TO PAY. Transcend
Services, Inc. (“Borrower”) promises to pay to Bank of America, N.A. (“Lender”), or order, In lawful money of the United States of America, the principal amount of Two Million & 00/100 Dollars ($2,000,000.00) or so much as
may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. 
  
 PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus
all accrued unpaid interest on April 30, 2005. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning March 31, 2005, with all subsequent interest payments to be due on the last
day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late charges; and then to any unpaid collection costs. The annual
interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing. 
  
 VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is the rate of interest publicly
announced from time to time by the Lender as its Prime Rate. The Prime Rate is set by the Lender based on various factors, including the Lender’s costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans. The Lender may price loans to its customers at above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a
change in the Lender’s Prime Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable during the term of this loan,
Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower’s request. The interest rate change will not occur more often than each date of such change in the index. Borrower
understands that Lender may make loans based on other rates as well. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate equal to the index. NOTICE: Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law. 
  
 PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to
make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar language. If Borrower sends
such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check
or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered
to: Bank of America, N.A., FL9-100-03-15, P.O. Box 45247 Jacksonville, FL 32203-0329. 
  
 LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged 4.000% of the unpaid portion of the regularly scheduled payment, regardless of any partial payments Lender has received. 
  
 INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity,
Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 6.000 percentage points over the Index. The interest rate will not exceed the maximum rate permitted by applicable law. 
  
 DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note: 
  
 Payment Default.
Borrower fails to make any payment when due under this Note. 
  
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or
condition contained in any other agreement between Lender and Borrower. 
  
 Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents. 
  
 False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

  
 Insolvency. The dissolution or termination of
Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower. 
  
 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. 
  
 Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or
accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this
Note. 
  

 PROMISSORY NOTE 

					
	Loan No: 3892414-307/315	 	(Continued)	 	Page 2

  
 Change In
Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
  
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of this Note is impaired. 
  
 Insecurity. Lender in good
faith believes itself insecure. 
  
 LENDER’S RIGHTS. Upon default,
Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and than Borrower will pay that amount. 
  
 ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s costs of collection, including court costs and fifteen percent (15%) of the principal plus accrued interest as attorneys’ fees, if any sums owing under this Note are collected
by or through an attorney at law, whether or not there is a lawsuit, and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower
also will pay any court costs, in addition to all other sums provided by law. 
  
 GOVERNING LAW. This Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of Georgia. This Note has been accepted by Lender in the State of Georgia. 
  
 CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to
submit to the jurisdiction of the courts of any County, States of Georgia. 
  
 RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on the debt against any and all such accounts. 
  
 LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by Borrower or by
an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any
of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of
this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower
has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure. 
  
 ARBITRATION. (a) This paragraph concerns the resolution of any controversies or claims between the parties, whether arising in contract, ____ or by statute,
including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or (ii) any document related to this agreement (collectively a “Claim”). For the
purposes of this arbitration provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by
this agreement. 
  
 (b) At the request of any party to this agreement, any Claim
shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U. S. Code) (the “Act”). The Act will apply even though this agreement provides that it is governed by the law of a specified state.

  
 (c) Arbitration proceedings will be determined in accordance with the Act, the
applicable rules and procedures for the arbitration of disputes of JAMS or any successor thereof (“JAMS”), and the terms of this paragraph. In the event of any inconsistency, the terms of this paragraph shall control. 
  
 (d) The arbitration shall be administered by JAMS and conducted, unless otherwise required by
law, in any U. S. state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one
arbitrator: however. If Claims exceed $5,000,000. upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within 90 days of the demand for arbitration and close within 90 days of
commencement and the award of the arbitrator(s) shall be issued within 30 days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional 60 days. The
arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed, judgment entered and enforced. 
  
 (e) The arbitrator(s) will have the authority to decide whether any Claim is barred by the
statute of limitations and, if so, to dismiss the arbitration on that basis. For purposes of the application of the statute of limitations, the service on JAMS under applicable JAMS rules of a notice of Claim is the equivalent of the filing of B
lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitratable shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement. 

 
 (f) This paragraph does not limit the right of any party to: (i) exercise self-help
remedies, such as but not limited to, setoff; (ii) initiate judicial or nonjudicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim
remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies. 
  
 (g) The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim
to arbitration. 
  
 ADDITIONAL DEFAULTS. 
  
 Each of the following shall constitute an additional event of default (“Event of
Default”) under this Note: 
  
 Event of Default Under Related
Documents. A default or additional event of default occurs under the terms of any promissory note, guaranty, pledge agreement, security agreement or other agreement or instrument executed by Borrower or any guarantor, pledgor, accommodation
party or other obligor in connection with or relating to this Note. 
  
 Judgment. The entry of a judgment against any Borrower or guarantor, pledgor, accommodation party or other obligor which Lender deems to be of a material nature, in Lender’s sole discretion. 
  
 ASSIGNMENT. Lender may sell or offer to sell this Note, together with any and all
documents guaranteeing, securing or executed in connection 

  

					
	 	 	PROMISSORY NOTE	 	 
	Loan No: 3892414-307/315	 	(Continued)	 	Page 3

  

 
with this Note, to one or more assignees without notice to or consent of Borrower. Lender is hereby authorized to share any information it has pertaining to
the loan evidenced by this Note, including without limitation credit information on the undersigned, any of its principals, or any guarantors of this Note, to any such assignee or prospective assignee. 
  
 COUNTERPARTS. This Note may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
  
 PRE BILLING. if the Borrower and Lender elect to use pre-billing calculation, for each payment date [the “Due Date”) the amount of each payment debit
will be determined as follows: On the “Billing Date” Lender will prepare and mail to Borrower an invoice of the amounts that will be due on that Due Date (“Billed Amount”). (The “Billing Date” will be a date that is a
specified number of calendar days prior to the Due Date, which number of days will be mutually agreed from time to time by Lender and Borrower.) The calculation of the Billed Amount will be made on the assumption that no new extensions of credit or
payments will be made between the Billing Date and the Due Date, and that there will be no changes in the applicable Interest rate. On the Due Date Lender will debit the Designated Account for the Billed Amount, regardless of the actual amount due
on that date (“Accrued Amount”). If the Due Date does not fall on a Business Day, Lender shall debit the Designated Account on the first Business Day following the Due Date. For purposes of this Agreement, “Business Day” means a
day other than Saturday, Sunday or other day on which commercial banks are authorized to close or are in fact closed in the state where the Lender’s lending office is located. If the Billed Amount debited to the Designated Account differs from
the Accrued Amount, the difference will be treated as follows: If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be Increased by the amount of the underpayment. Borrower will not be in default by
reason of any such underpayment. If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the overpayment. Regardless of any such difference, interest will continue to
accrue based on the actual amount of principal outstanding without compounding. Lender will not pay interest on any overpayment. 
  
 AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to deduct from Borrower’s account numbered 3279435327 the amount of any loan payment. If
the funds in the account ere insufficient to cover any payment, Lender shall not be obligated to advance funds to cover the payment. At any time and for any reason, Borrower or Lender may voluntarily terminate Automatic Payments. 
  
 TERMINATION OF AUTOMATIC PAYMENTS. In the event that Borrower terminates the Automatic
Payment arrangement with Lender, Borrower agrees that the interest rate under the Note will increase, at the discretion of the Lender, by one-half percentage point (0.50%) per annum over the rate of interest stated in the Note, and the amount of
each interest installment will be increased accordingly. The effective rate of interest under the Note shall not in any event exceed the maximum rate permitted by law. 
  
 OPTIONAL RENEWAL CLAUSE. This Note will be considered renewed if and only if Lender has sent to Borrower a written notice of renewal
(the “Renewal Notice”) effective as of the Expiration Date. If this Note is renewed, it will continue to be subject to all the terms and conditions set forth herein except as modified by the Renewal Notice. If this Note is renewed, the
term “Expiration Date” shall mean the date set forth in the Renewal Notice as the Expiration Date, and all outstanding principal plus all accrued interest shall be paid on the Expiration Date. The same process for renewal will apply to any
subsequent renewal of this Note. A renewal fee may be charged at Lender’s option. The amount of the renewal fee will be specified in the Renewal Notice. 
  
 ADVANCES UNDER THE LINE OF CREDIT. Except as otherwise provided in this Note, advances under the line of credit provided under this Note will be available until
the earlier of any event of default under this Note, or April 30, 2006 (the “Expiration Date”), Borrower may borrow, repay and re-borrow under this Note at any time until the Expiration Date. The total principal amount outstanding under
this Note at any one time must not exceed the principal amount of this Note, provided that the amount advanced hereunder does not exceed any borrowing base or other limitation on borrowings by Borrower. 
  
 FEE FOR LATE FINANCIAL STATEMENTS. If any of the financial Information required by
this Agreement is not provided to Lender within the time limits provided in this Agreement, Lender may, at its option, charge a late fee to the defaulting party in an amount set by Lender. The imposition and payment of a late fee shall not
constitute a waiver of Lender’s rights with respect to the default. 
  
 ADDRESS FOR NOTICES. Any notice required to be given under this Note shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed if to Borrower at the address shown near the beginning of this
Note and if to Lender at the address set forth below. Any party may change its address for notices under this Note by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address.
For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law, If there is more than one Borrower, any notice given by Lender to any Borrower is deemed to
be notice given to all Borrowers, Notwithstanding anything to the contrary herein, all notices and communications to the Lender shall be directed to the following address: 
  
 Bank of America, N.A, 
 Jacksonville CCS - Attn: Notice Address 
 9000 Southside Blvd., Bldg. 100, 3rd Floor 
 Jacksonville, FL 32256. 
  
 WITHIN-LINE FACILITIES. 
 LETTERS OF CREDIT 
  
 (a) This line of credit may be used for financing: 
  
 (i) A standby letter of credit with a maximum maturity of April 30, 2006. The
standby letters of credit may include a provision providing that the maturity date will be automatically extended each year for an additional year unless Lender gives written notice to the contrary. 
  
 (b) The amount of the letters of credit outstanding at any one time (including the drawn and
unreimbursed amounts of the letters of credit) may not exceed One Hundred Thousand Dollars ($100,000.00). 
  
 (c) In calculating the principal amount outstanding under this Note, the calculation shall Include the amount of any letters of credit outstanding, Including amounts drawn on any letters of credit and not yet
reimbursed. 
  
 (d) The following letters of credit are outstanding from Lender
for the account of Borrower: 
  

				
	 Letter of Credit Number

	  	Amount

	 7414990
	  	$	100,000.00

  
 As of the date of this Note, these
letters of credit shall be deemed to be outstanding under this Note, and shall be subject to all the terms and conditions stated in this Note. 
  

					
	 	 	PROMISSORY NOTE	 	 
	Loan No: 3892414-307/315	 	(Continued)	 	Page 4

  

 (e) Borrower agrees: 
  
 (i) Any sum drawn under a letter of credit may, at the option of Lender, be added to the principal amount outstanding under this Note. The amount will
bear interest and be due as described elsewhere in this Note. 
  
 (ii) If there is a default under this Note or any Related Document, to immediately prepay and make Lender whole for any outstanding letters of credit. 
  

(iii) The issuance of any letter of credit and any amendment to a letter of credit is subject to Lender’s written approval and must be in form and
content satisfactory to Lender and in favor of a beneficiary acceptable to Lender. 
  
 (iv) To sign Lender’s form Application and Agreement for Commercial Letter of Credit or Application and Agreement for Standby Letter of Credit, as applicable. 
  
 (v) To pay any issuance and/or other fees that Lender notifies Borrower will
be charged for issuing and processing letters of credit for Borrower. 
  
 (vi) To allow Lender to automatically charge its checking account for applicable fees, discounts, and other charges. 
  
 FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO
THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF
TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS
OF THE PARTIES. 
  
 SUCCESSOR INTERESTS. The terms of this Note shall
be binding upon Borrower, and upon Borrower’s hairs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. 
  
 GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower
and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties waive any right to require Lender to take action against any other party who signs this Note as
provided in O.C.G.A. Section 10-7-24 and agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security
interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint and several. 
  
 THIS NOTE IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS NOTE IS AND SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. 
  
 BORROWER: 
  

					
	TRANSCEND SERVICES, INC.	 	 
			
	By:	 	 /s/ Larry G. Gerdes
	 	(Seal)
	 	 	Larry G. Gerdes, Chief Exec. Officer of Transcend Services Inc.	 	 

  

  

			
	 	 	 FR U-1
 O.M.B. No. 7100-0115
 Approval expires April 30, 2005
 Customer #3892414 –
307/315

  
 BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM 
 Statement of Purpose for an Extension of Credit Secured By Margin Stock 
 (Federal Reserve Form U-1) 
  
 Bank of America, N. A. 
  

			
	 This report is required by law (15 U.S.C. §§ 78g and 78w; 12 CFR 221).
  
 The Federal Reserve may not conduct or sponsor, and an organization (or a person) is not required to respond to, a collection of information
unless it displays a currently valid OMB control number.
	 	Public reporting burden for this collection of information is estimated to average 10 minutes per response, including the time to gather and maintain the data in the required form and to review
instructions and complete the information collection. Send comments regarding this burden estimated or any other aspect of this collection of information, including suggestions for reducing this burden to Secretary, Board of Governors of the Federal
Reserve System, 20th and C Streets, N.W., Washington, D.C. 20551; and to the Office of Management and Budget, Paperwork Reduction Project (7100-0011), Washington, D.C. 2050

  
 Instructions 
  
 1. This form must be completed when a bank extends credit in excess of $100,000 secured
directly or indirectly, in whole or in part, by any margin stock. 
  
 2. The term
“margin stock” is defined in Regulation U (12 CFR 221) and includes, principally: (1) stocks that are registered on a national securities exchange (2) debt securities (bonds) that are convertible into margin stocks; (3) any
over-the-counter security designated as qualified for trading in the National Market System under a designation plan approved by the Securities and Exchange Commission (NMS security); and (4) shares of most mutual funds, unless 95 per cent of the
assets of the fund are continuously invested in U.S. government, agency, state, or municipal obligations. 
  
 3. Please print or type (if space is inadequate, attach a separate sheet). 
  
 PART I To be completed by borrower(s). 
  
 1. What
is the amount of the credit being extended? $2,000,000.00 (Amount of Note) 
  
 2.
Will, any part of this credit be used to purchase or carry margin stock? Yes  ̈ No x 
  
 If the answer is “no”, describe the specific purpose of the credit Working Capital
and General Corporate Purposes 
  
 I (We) have read this form and certify that to
the best of my (our) knowledge and belief the information given is true, accurate, and complete, and that the margin stock and any other securities collateralizing this credit are authentic, genuine, unaltered, and not stolen, forged, or
counterfeit. 
  

			
	 Signed:
 Transcend Services, Inc.
 Company Name
	 	 
		
	 /s/ Larry G. Gerdes
	 	3/2/05
	 Borrower’s signature
	 	Date
		
	 Larry G. Gerdes
	 	 
	 Print or Type Name
	 	 

  
 This form should not be
signed if blank 
 A borrower who falsely certifies the purpose of a credit on this form or otherwise willfully or intentionally evades the provisions of
Regulation U will also violate Federal Reserve Regulation X, “Borrowers of Securities Credit” 
  

 

 
  
 DISBURSEMENT REQUEST AND
AUTHORIZATION 
  

							
	Borrower:	  	 Transcend Services, Inc.
 945 East Paces Ferry
Rd., Suite 1475
 Atlanta, GA 30326
	  	Lender:	  	 Bank of America, N.A.
 CCS-Commercial
Banking
 FL9-100-03-15
 600 Peachtree St.
NE
 Atlanta, GA 30308

  
 LOAN TYPE. This Is a Variable
Rate Nondisclosable Revolving Line of Credit Loan to a Corporation for $2,000,000.00 due on April 30, 2006. A margin of 0,000% is added to the Index rate. Lender will tell the Borrower the current index rate upon Borrower’s request. 

 
 PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for: 
  

	 	 ̈	Personal, Family, or Household Purposes or Personal Investment. 

  

	 	x	Business (Including Real Estate Investment). 

  
 SPECIFIC PURPOSE. The specific purpose of this loan is: Working Capital. 
  

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be disbursed until all of Lender’s conditions for making the loan have been
satisfied, Please disburse the loan proceeds of $2,000,000.00 as follows: 
  

				
	 Undisbursed Funds:
	  	$	994,183.00
	 Other Disbursements:
$1,00_,817.00 Renewal of and a $_00,000.00 increase to Loan #3892414-31_. Current outstanding balance of
$1,00_,817.00
	  	$	1,00_,817.00
	 	  	
	

	 Note Principal:
	  	$	2,000,000.00
	 	  	 	 

  
 CHARGES PAID IN CASH. Borrower
has paid or will pay in cash as agreed the following charges: 
  

				
	 Prepaid Finance Charges Paid in Cash:
	  	$	0.00
	 Other Charges Paid in Cash: $2,500.00 Loan Fee for increase to Line of Credit
	  	$	2,500.00
	 	  	
	

	 Total Charges Paid in Cash:
	  	$	2,500.00

  
 DEBITING OF ACCOUNT. Borrower
authorizes Lender to debit from Borrower’s account number 3279435327, all of the above Charges Paid in Cash and any other closing costs associated with the Loan. 
  
 FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS
TRUE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER’S FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED MARCH 1, 2005. 
  
 THIS AGREEMENT IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS AGREEMENT IS AND SHALL
CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW. 
  

					
	BORROWER:	 	 
		
	TRANSCEND SERVICES, INC.	 	 
			
	By:	 	 /s/ Larry G. Gerdes
	 	(Seal)
	 	 	Larry G. Gerdes, Chief Exec. Officer of Transcend Services, Inc.Agreement for Financial Assistance

 Exhibit 10.1 
  

			
	STATE OF TEXAS	  	§
	 	  	§
	COUNTY OF TAYLOR	  	§

  
 AGREEMENT FOR
FINANCIAL ASSISTANCE 
  
 This Agreement is
effective the 1st day of March 2005, by and between the Development Corporation of Abilene, Inc. (“DCOA”), a Texas corporation formed pursuant to Tex. Rev. CIV. Stat. Ann. Art. 5190.6, and Transcend Services, Inc.
(“TRANSCEND”), a Delaware corporation authorized to do business in Texas, with headquarters located at 945 East Paces Ferry Road, Suite 1475 Atlanta, GA 30326-6629. For purposes of this Agreement, TRANSCEND shall include its affiliates,
subsidiaries, and any related company. 
  
 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 corporations in order to facilitate the expansion and/or
retention 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/her duly authorized representative, unless
otherwise stated in this Agreement. 
  
 TRANSCEND operates a
facility in Atlanta, Georgia, transcribing medical information for doctors and hospitals across the United States. TRANSCEND intends to expand their operations into Abilene, Texas, creating a medical transcription training center and regional office
in leased office space with many of its employees working from home (the “Facility”). DCOA agreed to provide job creation/retention incentive payments of up to $2,000,000 for up to 208 new jobs created within five years with incentives
earned up to eight years in the total amount of $2,000,000; $1,000,000 as an earnable loan to offset start-up costs, first year operating losses and to support the creation on 104 new jobs and $1,000,000 as an earnable loan to be paid upon hiring of
the 105th employee by TRANSCEND to support the creation of an additional 104 new jobs. 
  

	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 a.) at an accelerated
rate of $25,000 per month for the first 6 months, and for the first fifteen employees hired for a total principal reduction of $150,000 and release of the letter of credit referenced above, and, b.) at the quarterly rate of 1/20th of the DCOA
Assistance per New Job amount listed below for each additional FTE created. A full-time equivalent employment position is one that provides 520 hours, 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 creation of an additional 104 new jobs, payable upon TRANSCEND hiring its 105th employee. 

  
 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 as security for the loan, or
another form of security acceptable to both parties. Principal reductions will be earned by TRANSCEND at the quarterly rate of 1/20th of the DCOA Assistance per New Job amount listed below for each additional FTE created. A full-time
equivalent employment position is one that provides 520 hours, including all paid leave and excluding any overtime. The letter of credit may be reduced quarterly to match the outstanding principal balance of the loan. 
  
 DCOA Assistance per New Job 
  

						
	 Jobs

	  	                             Annual
Salary                            

	  	Job Creation Incentives

	200 Transcribers	  	$34,000 annually av. 200 X $ 9,535 =	  	$	1,907,000
	3 Trainers	  	$40,000 annually 3 X $12,500 =	  	$	37,500
	1 Manager	  	$50,000 annually 1 X $16,000 =	  	$	16,000
	1 IT Support	  	$35,000 annually 1 X $9,000 =	  	$	9,000
	1 Sales	  	$55,000 annually 1 X $16,000 =	  	$	16,500
	1 Custodian	  	$25,000 annually 1 X $7,000 =	  	$	7,000
	1 Secretary	  	$12 hourly ($25K/yr) 1 X $ 7,000 =	  	$	 7,000
	 	  	 	  	
	

	Total	  	 	  	$	2,000,000

  
 Agreement for Financial Assistance

  

 Page 2 

 The job creation period for the first loan is five years and begins March 1, 2005 and ends February 28,
2010. Quarterly certifications shall be made by TRANSCEND within 90 days of the end of each quarter, and DCOA shall make principal reductions based on FTE’s certified in the salary ranges listed above. Attached Exhibit “A”
depicts an ideal job certification form. 
  
 The job
creation period for the second loan is five years and begins on the date of loan closing and ends sixty months later. Quarterly certifications shall be made by TRANSCEND within 90 days of the end of each quarter, and DCOA shall make principal
reductions based on FTE’s certified in the salary ranges listed above. 
  
 Average salary levels indicated in the above table must be met for each position after 1 year to receive the corresponding assistance credit, and may include any non-mandatory benefits provided the employee by
TRANSCEND (i.e. health insurance, retirement). The average salary level must also be maintained or exceeded for each employee throughout the five-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 (2011
and 2012 for the first loan) to allow TRANSCEND to realize the full benefit of the incentive for each FTE created. 
  

	 	3.	Have the right to periodically verify the terms and conditions of this Agreement including, but not limited to, the number of persons employed by TRANSCEND, the addresses of those
persons, the number of hours each employee worked during the previous 12 months, and the cumulative payroll for TRANSCEND’s Abilene, Texas operation. 

  

	 	4.	Have the right to request and/or inspect TRANSCEND’s books and financial records reflecting TRANSCEND’s financial condition to confirm compliance with this Agreement.

  

	 	5.	For the purposes of this agreement, TRANSCEND may create up to 10% of its total new employment through acquisition of medical transcription companies operating within Abilene and
its extraterritorial jurisdiction. 

  

	 	B.	TRANSCEND shall: 

  

	 	1.	Create a minimum of 208 FTEs at the Facility during the job creation period described in Section II, A., 2., above. 

  
 Agreement for Financial Assistance 
  

 Page 3 

	 	2.	Quarterly, within 90 days of the end of the previous quarter, certify in writing to DCOA the number of employment positions which have been created and/or retained at the Facility.
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 3 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). Attached Exhibit “A” depicts an ideal job certification
form. 

  

	 	3.	Provide DCOA with the first opportunity to make a proposal in the event that TRANSCEND considers establishment of a.) a data center and /or hot site outside Atlanta, Georgia, b.) a
regional headquarters for Texas or for a multi-state region including Texas and/or c.) other new operations requiring a capital investment in excess of $50,000 and/or the creation of additional employment opportunities in excess of 25, excluding
acquisitions. 

  

	 	4.	Certify in writing as of the anniversary of the job creation period that at least 51% of the employment positions created and retained at the Facility have been made available to
residents of Abilene or Abilene’s Extraterritorial Jurisdiction (ETJ). 

  

	 	5.	Comply with all relevant local, state, and federal laws and regulations including, but not limited to Building, Plumbing, Water, Electrical, Mechanical, and Fire Codes. TRANSCEND
shall obtain all required permits and licenses necessary to conduct business within all applicable jurisdictions. 

  

	 	6.	Shall not cause or permit the presence, use, disposal, storage, or release of any hazardous substances on or in the Facility. TRANSCEND shall not do, nor knowingly allow anyone else
to do, anything affecting the Facility that would be in violation of any environmental law. The preceding two sentences shall not apply to the presence, use, or storage on the Facility of small quantities of hazardous substances that are generally
recognized to be appropriate to normal commercial uses in TRANSCEND’s business and to maintenance of the Facility. 

  
 TRANSCEND shall promptly give DCOA written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency
or private party involving the Facility and any hazardous substance or environmental law of which TRANSCEND has actual knowledge. If TRANSCEND learns, or is notified by governmental or regulatory authority, that any removal or other remediation of
any 
  
 Agreement for Financial Assistance 
  

 Page 4 

 hazardous substances affecting the Facility is necessary, TRANSCEND shall promptly take all necessary
remedial actions in accordance with environmental law. 
  
 As
used in this paragraph, “hazardous substances” are those substances defined as toxic or hazardous substances by environmental law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic
pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph, “environmental law” means applicable local, state, and/or federal laws and regulations that
relate to health safety or environmental protection. 
  

	 	7.	Provide, subject to TRANSCEND’s security requirements, reasonable access to and authorize reasonable inspection of the Facility at mutually agreed upon times by DCOA or its
representatives, to confirm the specifications and conditions of this Agreement have been met. 

  

	 	8.	Agree to forego seeking tax abatement on any and all real and personal property in Abilene for as long as said assistance remains outstanding. 

  

	 	9.	Provide financial information and execute all necessary agreements including but not limited to this Agreement. TRANSCEND represents that it has the financial capability to perform
under this Agreement and will provide such financial information as reasonably requested by DCOA. 

  

	 	10.	Maintain a system of accounting that is generally accepted in the United States of America, and permit DCOA’s officers or authorized representatives to visit, examine, audit,
inspect, and make and take away copies or reproductions of TRANSCEND’s book of accounts and other records at least once quarterly as DCOA may desire. Unless written notice of another location is given to DCOA, TRANSCEND’s books and records
will be located at 945 East Paces Ferry Road, Atlanta, GA. 

  

	 	11.	Furnish to DCOA year end financial statements to include balance sheet, operating statement and surplus reconciliation, together with an officer’s certificate of compliance
with this Agreement, within one hundred twenty (120) days after the end of each annual accounting period. 

  
 Promptly provide DCOA with such additional information, reports or statements respecting its business operations and financial condition as DCOA may
reasonably request from time to time. 
  

	 	12.	Maintain insurance with responsible companies on such of its Abilene, Texas Facility (leased premises), in such risks as is customarily maintained 

  
 Agreement for Financial Assistance 
  

 Page 5 

 by similar businesses operating in the same vicinity, specifically, to include a policy of fire and
extended coverage insurance covering all assets, business interruption insurance and general liability insurance, all to be with such companies and in such amounts reasonably satisfactory to DCOA and the City of Abilene (City). Maintain workers
compensation insurance or such other insurance in lieu thereof as may be acceptable to such extent and against liability as is commonly maintained by other companies similarly situated. Evidence of such insurance will be supplied to DCOA and the
City. 
  

	 	13.	Maintain its corporate existence in good standing and comply with all statutes, rules, laws, regulations and governmental requirements applicable to it or to any of its property,
business operations and transactions (including without limitation, all applicable environmental statutes, rules, regulations and ordinances). 

  

	 	14.	Promptly advise DCOA in writing of any condition, event or act which comes to TRANSCEND’s attention, and any litigation filed against TRANSCEND, that would or might materially
adversely affect TRANSCEND’s financial condition under this Agreement. 

  

	 	15.	Maintain all of its tangible property in reasonably good condition and repair and make all necessary replacements thereof, and preserve and maintain all licenses, permits,
privileges, franchises, certificates and the like necessary for the operation of its business. 

  

	III.	REPRESENTATIONS. 

  

	 	1.	TRANSCEND is a corporation, duly organized and in good standing, under the laws of the State of Delaware and has the corporate power to own its property and to carry on its business
in each jurisdiction in which TRANSCEND operates. 

  

	 	2.	TRANSCEND has full power and authority to enter into this Agreement, which has been duly authorized by all proper and necessary corporate action, with copies of corporate
authorization being provided to the DCOA. No consent or approval of stockholders or of any public authority, which has not been obtained prior to the signing of this Agreement, is required as a condition to the validity of this Agreement, and
TRANSCEND is in material compliance with all laws and regulatory requirements to which it is subject. 

  

	 	3.	There are no proceedings pending or, to the knowledge of TRANSCEND, threatened before any court or administrative agency, which will or may have a material adverse effect on the
financial condition or operations of TRANSCEND or any subsidiary, except any or all that have been previously publicly announced. 

  
 Agreement for Financial Assistance 
  

 Page 6 

	 	4.	There are no charter, bylaw or stock provisions of TRANSCEND and no provisions of any existing agreement, mortgage, indenture or contract binding TRANSCEND or affecting its
property, which would conflict with or in any way prevent the execution, delivery or carrying out of the terms of this Agreement. 

  

	 	5.	All undisputed income taxes and other taxes, including, without limitation, state and federal sales, use, excise, ad valorem, unemployment, social security and any withholding taxes
due and payable through the date of this Agreement have been paid prior to becoming delinquent. 

  

	 	6.	The books and records of TRANSCEND properly reflect TRANSCEND’s financial condition and there has been no material adverse change in TRANSCEND’s financial condition as
represented in the statements on hand dated June 30, 2004. 

  

	 	7.	TRANSCEND is headquartered at 945 East Paces Ferry Road, Suite 1475 Atlanta, GA 30326-6629. 

  

	IV.	POINT OF CONTACT 

  
 On DCOA owned/financed projects, representatives of the Department of Economic Development shall be designated as primary contact person(s) between
TRANSCEND, its representatives, agents or contractors, and the related departments of the City of Abilene. The primary contact for DCOA will be the Chief Executive Officer and the secondary contact will be the Contracts Administrator or their
respective successors. 
  
 Communications regarding the project,
both written and oral, between TRANSCEND and the City, and vice versa, shall be conveyed via the contact persons. For example: If TRANSCEND or its representatives, agents or contractors require(s) a construction permit for improvements to it’s
leased premises, they should contact the individuals designated above. 
  
 The contact person(s) shall act as a liaison between the DCOA, the City, and TRANSCEND to insure communication is enhanced and all issues are addressed in a timely manner. The primary contact for TRANSCEND will be Tom Binion, President, and
the secondary contact will be Joseph Bleser, CFO, or their respective successors. 
  

	V.	DURATION, TERMINATION 

  
 If a violation of the terms and conditions of this Agreement becomes known, TRANSCEND will be notified by DCOA in writing and thereafter shall have 30
days to correct or initiate the correction of the violation. Upon determination by DCOA that TRANSCEND has failed to correct the violation or initiate the correction of the violation and comply with the terms and conditions of this Agreement, the
Agreement may be terminated by DCOA at its sole discretion. Said termination may be in whole, or from time to time, in part as violation warrants. Termination will be effective 10 days after delivery of the Notice of Termination to TRANSCEND.

  
 Agreement for Financial Assistance 
  

 Page 7 

	VI.	EVENTS OF DEFAULT 

  
 Subject to the notice and cure provisions of Section V hereof, if any of the following events of default shall occur, DCOA shall have no further
obligation to TRANSCEND under this Agreement: 
  

	 	1.	Failure of TRANSCEND to perform any term, covenant or agreement contained in this Agreement, or in any related document(s); or 

  

	 	2.	The DCOA and/or City determines that any representation or warranty contained herein or in any financial statement, certificate, report or opinion submitted to DCOA in connection
with or pursuant to the requirements of this Agreement was incorrect or misleading in any material respect when made; or 

  

	 	3.	Any judgment in excess of $100,000.00 is assessed against TRANSCEND or any attachment or other levy against the property of TRANSCEND with respect to a claim remains unpaid,
unstayed on appeal, undischarged, not bonded or not dismissed for a period of 30 days; or 

  

	 	4.	TRANSCEND makes an assignment for the benefit of creditors; admits in writing its inability to pay its debts generally as they become due; files a petition in bankruptcy; is
adjudicated insolvent or bankrupt; petitions or applies to any tribunal for any receiver or any trustee of TRANSCEND or any substantial part of its property, commences any action relating to TRANSCEND under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect; or if there is commenced against TRANSCEND any such action and such action remains undismissed or unanswered for a period of
sixty (60) days from such filing, or TRANSCEND by an act indicates its consent to or approval of any trustee of TRANSCEND or any substantial part of its property; or suffers any such receivership or trustee to and such appointment remains unvacated
for a period of sixty (60) days; or, 

  

	 	5.	TRANSCEND substantially changes its present senior management or ownership without written notification to DCOA within thirty (30) days after change; or 

  

	 	6.	TRANSCEND changes the general character of business as conducted at the date hereof, or engages in any type of business not reasonably related to its business as presently and
normally conducted. 

  
 Agreement for Financial Assistance

  

 Page 8 

	VII.	VENUE/COLLECTION 

  
 Should any action, whether real or asserted, at law or in equity, arise out of the execution, performance, attempted performance or non-performance of
this Agreement, venue for said action shall be in the City of Abilene, Taylor County, Texas. The Agreement shall be governed by the substantive laws of the State of Texas. 
  
 Should DCOA have to file suit for collection, TRANSCEND agrees to pay all of DCOA’s reasonable out of pocket expenses
in connection with this Agreement and the collection of the outstanding balance. TRANSCEND also agrees to pay all reasonable attorney’s fees and court costs. 
  

	VIII.	ASSIGNMENT 

  
 TRANSCEND shall not assign all or any part of its rights, privileges, or duties under this Agreement without DCOA’s prior written approval. Written
approval shall not be unreasonably withheld. Any attempted assignment of same without approval shall be void, and shall constitute a breach of this Agreement. 
  

	IX.	INDEMNITY 

  
 TRANSCEND shall operate hereunder as an Independent Contractor and not as an officer, agent, servant, or employee of DCOA and/or City. Nothing herein
shall be construed as creating a partnership or joint enterprise between DCOA and/or City and TRANSCEND. It is expressly agreed that no officer, director, member, agent, employee, subcontractor, licensee, or invitee of TRANSCEND is in the paid
service of DCOA and/or City. DCOA and/or City does not have the legal right to control the details of the tasks performed hereunder by TRANSCEND, its officers, directors, members, agents, employees, subcontractors, program participants, licensees,
or invitees. 
  
 TRANSCEND further agrees that it shall at
all times exercise reasonable precautions on behalf of, and be responsible for the safety of, its officers, agents, employees, customers, visitors, as well as their property, while performing the tasks required under this Agreement. 

 
 TRANSCEND agrees to indemnify, hold harmless, and defend DCOA and the
City, their respective officers, agents, and employees from and against all liability for claims, liens, suits, demands, and/or actions for damages, injuries to person (including death), property damage (including loss of use), and expenses
including court costs and attorney’s fees, and reasonable costs arising out of or resulting from TRANSCEND’s activities conducted under or incidental to this Agreement and from any liability arising out of or resulting from the intentional
acts or negligence, including all such causes of action based on common, constitutional, or statutory law, or based in whole or in part on the negligent or intentional acts or omissions of TRANSCEND, including but not limited to its officers,
agents, employees, subcontractors, licensees, invitees, and other persons, excluding DCOA and City of Abilene and their respective officers, agents and employees. 
  
 Agreement for Financial Assistance 
  

 Page 9 

 It is further agreed with respect to the above indemnity that the DCOA and TRANSCEND will each provide
the other prompt and timely notice of any event covered which in any way, directly or indirectly, contingently or otherwise, affects or might affect TRANSCEND or DCOA, and each shall have the right to reasonably compromise and defend the same to the
extent of its own interest. 
  

	X.	INDEBTEDNESS 

  
 TRANSCEND hereby agrees to pay and discharge when due all of its indebtedness and obligations, including without limitation, all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon TRANSCEND or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of TRANSCEND’s properties, income, or profits; provided, however, TRANSCEND will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so long as (i) the legality of the same shall be contested in
good faith by appropriate judicial, administrative or other legal proceedings, and (ii) TRANSCEND shall have established on its books adequate reserves with respect to such contested assessment, tax, charge, levy, lien or claim in accordance with
auditing standards generally accepted in the United States of America. 
  

	XI.	NOTICES 

  
 Unless otherwise provided herein, all notices, requests, consents and demands shall be in writing and shall be mailed, certified mail, postage prepaid,
addressed as follows: 
  

			
	“Borrower”	  	“Lender”
	TRANSCEND SERVICES, INC.	  	DEVELOPMENT CORPORATION OF ABILENE, INC.
	945 East Paces Ferry Road, Suite 1475	  	P.O. Box 60
	Atlanta, GA 30326-6629	  	Abilene, Texas 79604-0060
	(404) 364-8001	  	(325) 676-6390
	Fax: (404)364-8009	  	(325) 676-6377
	E-mail: tom.binion@trcr.com	  	E-mail: richard.burdine@abilenetx.com
	ATTN: Tom Binion	  	ATTN: Richard Burdine

  
 Notice will be
effective upon deposit in the United States mail in the manner provided above. Any party may change its address with written notice to the other party. 
  
 Agreement for Financial Assistance 
  

 Page 10 

	XII.	AGREEMENT 

  
  
 This Agreement and related documents shall constitute the sole agreement between TRANSCEND and DCOA relating to the
object of this Agreement and correctly sets forth the complete rights, duties, and obligations of each party to the other as of its date. Any prior agreements, promises, negotiations or representations, verbal or otherwise, not expressly set forth
in this Agreement are of no force and effect. 
  
 Agreement for Financial
Assistance 
  

 Page 11 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written
above. 
  

															
	TRANSCEND SERVICES, INC.	 	 	 	DEVELOPMENT CORPORATION OF ABILENE, INC.
			
	 /s/ Larry Gerdes

	 	 	 	/s/ Richard Burdine

	 Name:
	 	 ,

	 	 Larry Gerdes
  

	 	 	 	Richard Burdine, CEO
	Date:	 	 March 1, 2005

	 	 	 	Date:
            March 1, 2005

			
	ATTEST:	 	 	 	ATTEST:
				
	By:	 	 /s/ Thomas C. Binion

	 	 	 	By:
          /s/ Kim Tarrant

	Title:	 	 President & CDO

	 	 	 	        Kim Tarrant
	 	 	 	 	 	 	 	 	 	 	        Contracts Administrator
			
	 Federal Tax I.D. No.                33-0378756

	 	 	 	APPROVED:
			
	Corporate Seal:	 	 	 	 
						
	 	 	 	 	 	 	 	 	 	 	/s/ T. Daniel Santee

	 	 	 	 	 	 	 	 	 	 	City Attorney
						
	 	 	 	 	 	 	 	 	 	 	/s/ Tom Walding

	 	 	 	 	 	 	 	 	 	 	Risk Manager

  
 Agreement for Financial Assistance

  

 Page 12 

 EXHIBIT “A” 
 QUARTERLY JOB CERTIFICATION FORM 
  
 TRANSCEND 
  
 Abilene Location - mm-dd-yy through
mm-dd-yy (3 months) 
 Quarter No.              
  
 Management Positions 
  

												
	 	  	 NAME *

	  	 CITY OF
 RESIDENCE

	  	POSITION

	  	 TOTAL REG.
 HOURS**

	  	TOTAL REG.
SALARY**

	1	  	Doe, John	  	Abilene, TX	  	Division Manager	  	520	  	$	11,250
	2	  	Jones, Jane	  	Abilene, TX	  	Asst. Manager	  	200	  	$	3,850
	3	  	Smith, Jill	  	Abilene, TX	  	General Manager	  	260	  	$	6,250
	4	  	Wilson, James	  	Clyde, TX	  	Office Manager	  	520	  	$	7,500
	 	  	 	  	 	  	 	  	
	  	
	

	 	  	TOTAL	  	 	  	 	  	1500	  	$	28,850
	 	  	 	  	 	  	 	  	
	  	
	

	
	Other Positions
						
	 	  	 NAME *

	  	 CITY OF
 RESIDENCE

	  	POSITION

	  	 TOTAL REG.
 HOURS **

	  	TOTAL REG.
SALARY **

	1	  	Bailey, June	  	Abilene, TX	  	Secretary	  	520	  	$	5,500
	2	  	Carter, William	  	Abilene, TX	  	Transcriptionist	  	200	  	$	2,880
	3	  	Johnson, Don	  	Abilene, TX	  	Transcriptionist	  	260	  	$	3,744
	4	  	Sullivan, Joe	  	Clyde, TX	  	Transcriptionist	  	520	  	$	7,488
	 	  	 	  	 	  	 	  	
	  	
	

	 	  	TOTAL	  	 	  	 	  	1500	  	$	19,612
	 	  	 	  	 	  	 	  	
	  	
	

	*	List all employees whether employed for one week or the entire 3 months. 

	**	Please do not include overtime hours or bonuses, but do include vacation, sick and holiday hours if considered regular. 

  

	•	 	Full-time employment equivalents: 

  
 Management = 2.9 (1500 total hours/ 520) 
 Other = 2.9 (1500 / 520) 
 TOTAL = 5.8 
  

	•	 	Total Payroll = $48,462 

  

	•	 	Average annual wage: 

  
 Management = $39,793 ($28,850/2.9 FTE x 4 quarters) 
 Other = $27,051 ($19,612/2.9 FTE x 4 quarters) 
  
 I,
«FirstName» «LastName», «JobTitle» for
                            , do hereby certify that the employment information provided is true and
accurate for the Abilene facility to the best of my knowledge. I also certify the following: 
  

	 	1.	During the 3-month period ended mm-dd-yy, 3,000 regular payroll hours were incurred, equaling 6 FTE’s. 

  
 Agreement for Financial Assistance 
  

 Page 13 

	 	2.	That at least 51% of the employment positions in existence between the periods stated above were made available to residents of Abilene, Texas or Abilene’s ETJ.

  

			
	  

	 	  

	«FirstName» «LastName»	 	Date
	  

	 	 

  

			
	STATE OF TEXAS	  	X
		
	COUNTY OF TAYLOR	  	X

  
 This information was acknowledged
before me on this      day of                             ,
             by «FirstName» «LastName», «JobTitle» for
                                    , a Texas corporation, on
behalf of said agency. 
  

	
	  

	Notary Public, State of Texas

  

	
	  

	Notary’s typed or printed name
	
	My commission expires
	  

  
 Agreement for Financial Assistance

  

 Page 14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]