SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2011

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

12. SUBSEQUENT EVENTS

In July 2011, we entered into a lease for a facility in San Pedro Sula, Honduras.  The facility is approximately 39,000 square feet and we expect to commence operations at the end of the third quarter of 2011.  Management decided to open a facility in Honduras based upon client demand for another Latin America location.  Total lease commitments are approximately $5.8 million over the initial term of the lease, which is approximately seven years.

On July 27, 2011, we entered into an SOW with AT&T for certain services we provide to AT&T with regard to their wireless consumer customers.  The agreement is effective as of August 1, 2011 with a term of three years through August 1, 2014 but may be terminated by AT&T with a 60 day written notice.  The agreement is pursuant to our current master services agreement with AT&T.  This master services agreement is currently being renegotiated and we expect that the SOW will be subsumed under the new master services agreement once finalized.  The agreement covers 14 current lines of business and represents approximately 30% of our business with AT&T.

On July 28, 2011, we entered into a new MSA with T-Mobile which covers all services that we provide to T-Mobile.   The MSA replaces the previous master services agreement dated October 1, 2007 and has an initial term of five years but may be terminated by T-Mobile with a 90 day written notice.  The agreement is effective July 1, 2011 with an initial term of five years and will automatically renew for additional one-year periods thereafter.

On August 8, 2011, we entered into an Agreement with UMB Bank for a $7.5 million secured revolving line of credit for one year from August 1, 2011 to August 1, 2012.  This credit facility replaced our previous $10 million secured revolving line of credit with UMB Bank.  Borrowings under the Agreement bear interest, at our option at the time of borrowing, of the thirty, sixty or ninety day LIBOR index, plus 3.25%.  The interest rate shall never be less than 4.00% per annum.  This is an increase from the previous terms, which were that borrowings bore interest, at our option at the time of the borrowing, of the thirty, sixty or ninety day LIBOR index, plus 2.50%.  Under the Agreement, UMB Bank maintains a security interest in all of our present and future accounts receivable, general intangibles, and owned real property.   In addition, under the Agreement, we are subject to certain financial covenants.  One of the covenants requires a tangible net worth of at least $83 million, which was reduced from a requirement of $90 million under the previous agreement.  Our other financial covenants include maintaining 1) a ratio of total liabilities to tangible net worth of less than 1.0 to 1.0 and 2) unencumbered liquid assets, defined as cash, certificate of deposits and marketable securities, of at least $10 million measured on the last day of each fiscal quarter.