Exhibit 10.1
$225,000,000
CREDIT AGREEMENT
Dated as of October 1, 2010
among
CBAY INC., MEDQUIST INC.
and
MEDQUIST TRANSCRIPTIONS, LTD, AS BORROWERS
CBAYSYSTEMS HOLDINGS LIMITED, AS HOLDINGS
THE LENDERS AND L/C ISSUERS PARTY HERETO
and
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
and
SUNTRUST BANK, AS SYNDICATION AGENT
and
ING CAPITAL LLC AND REGIONS BANK,
AS CO-DOCUMENTATION AGENTS
♦ ♦ ♦
GE CAPITAL MARKETS, INC. AND SUNTRUST ROBINSON HUMPHREY, INC.,
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

         
ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
    6  
 
       
Section 1.1 Defined Terms
    6  
Section 1.2 UCC Terms
    41  
Section 1.3 Accounting Terms and Principles
    41  
Section 1.4 Pro Forma
    42  
Section 1.5 Payments
    42  
Section 1.6 Interpretation
    42  
 
       
ARTICLE 2 THE FACILITIES
    43  
 
       
Section 2.1 The Commitments
    43  
Section 2.2 Borrowing Procedures
    43  
Section 2.3 Swing Loans
    45  
Section 2.4 Letters of Credit
    47  
Section 2.5 Reduction and Termination of the Commitments
    50  
Section 2.6 Repayment of Loans
    51  
Section 2.7 Optional Prepayments
    51  
Section 2.8 Mandatory Prepayments
    51  
Section 2.9 Interest
    53  
Section 2.10 Conversion and Continuation Options
    54  
Section 2.11 Fees
    54  
Section 2.12 Application of Payments
    55  
Section 2.13 Payments and Computations
    57  
Section 2.14 Evidence of Debt
    58  
Section 2.15 Suspension of Eurodollar Rate Option
    59  
Section 2.16 Breakage Costs; Increased Costs; Capital Requirements
    60  
Section 2.17 Taxes
    61  
Section 2.18 Substitution of Lenders
    64  
Section 2.19 Borrower Representative
    65  
 
       
ARTICLE 3 CONDITIONS TO LOANS AND LETTERS OF CREDIT
    65  
 
       
Section 3.1 Conditions Precedent to Initial Loans and Letters of Credit
    65  
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit
    67  
Section 3.3 Conditions Precedent to Effectiveness of this Agreement
    67  
Section 3.4 Determinations of Initial Borrowing Conditions
    69  
 
       
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
    69  
 
       
Section 4.1 Corporate Existence; Compliance with Law
    69  
Section 4.2 Loan and Related Documents
    69  
Section 4.3 Ownership of Group Members
    70  
Section 4.4 Financial Statements
    70  
Section 4.5 Material Adverse Effect
    71  
Section 4.6 Solvency
    71  
Section 4.7 Litigation
    71  
Section 4.8 Taxes
    71  
Section 4.9 Margin Regulations
    72  
Section 4.10 No Defaults
    72  
Section 4.11 Investment Company Act
    72  
Section 4.12 Labor Matters
    72  
Section 4.13 ERISA
    72  
Section 4.14 Environmental Matters
    73  
Section 4.15 Intellectual Property
    73  

2

--------------------------------------------------------------------------------

 

         
Section 4.16 Title; Real Property
    74  
Section 4.17 Full Disclosure
    74  
Section 4.18 Anti-Terrorism Laws
    74  
Section 4.19 Material Agreements
    74  
Section 4.20 Health Care Matters
    74  
Section 4.21 Health Care Permits
    74  
Section 4.22 Exclusion
    75  
Section 4.23 HIPAA
    75  
 
       
ARTICLE 5 FINANCIAL COVENANTS
    75  
 
       
Section 5.1 Maximum Consolidated Senior Leverage Ratio
    76  
Section 5.2 Maximum Consolidated Total Leverage Ratio
    76  
Section 5.3 Minimum Consolidated Interest Coverage Ratio
    77  
 
       
ARTICLE 6 REPORTING COVENANTS
    78  
 
       
Section 6.1 Financial Statements
    78  
Section 6.2 Other Events
    80  
Section 6.3 Copies of Notices and Reports
    81  
Section 6.4 Labor Matters
    81  
Section 6.5 ERISA-Related Information
    81  
 
       
ARTICLE 7 AFFIRMATIVE COVENANTS
    82  
 
       
Section 7.1 Maintenance of Corporate Existence
    82  
Section 7.2 Compliance with Laws, Etc
    82  
Section 7.3 Payment of Obligations
    82  
Section 7.4 Maintenance of Property
    82  
Section 7.5 Maintenance of Insurance
    82  
Section 7.6 Keeping of Books
    83  
Section 7.7 Access to Books and Property
    83  
Section 7.8 Environmental
    83  
Section 7.9 Use of Proceeds
    84  
Section 7.10 Additional Collateral and Guaranties
    84  
Section 7.11 Controlled Deposit Accounts and Controlled Securities Accounts
    85  
Section 7.12 Compliance Program
    85  
Section 7.13 Interest Rate Contracts
    85  
Section 7.14 Post Closing Covenant
    85  
 
       
ARTICLE 8 NEGATIVE COVENANTS
    86  
 
       
Section 8.1 Indebtedness
    86  
Section 8.2 Liens
    88  
Section 8.3 Investments
    89  
Section 8.4 Asset Sales
    90  
Section 8.5 Restricted Payments
    92  
Section 8.6 Prepayments of Indebtedness Under Subordinated Notes
    94  
Section 8.7 Fundamental Changes
    94  
Section 8.8 Change in Nature of Business
    95  
Section 8.9 Transactions with Affiliates
    96  
Section 8.10 Third-Party Restrictions on Indebtedness, Liens, Investments or
Restricted Payments
    97  
Section 8.11 Modification of Certain Documents
    98  
Section 8.12 Accounting Changes; Fiscal Year
    99  
Section 8.13 Margin Regulations
    99  
Section 8.14 Compliance with ERISA
    99  
Section 8.15 Hazardous Materials
    99  

3

--------------------------------------------------------------------------------

 

         
ARTICLE 9 EVENTS OF DEFAULT
    99  
 
       
Section 9.1 Definition
    99  
Section 9.2 Remedies
    101  
Section 9.3 Actions in Respect of Letters of Credit
    102  
Section 9.4 Cash Collateral Accounts
    102  
 
       
ARTICLE 10 THE ADMINISTRATIVE AGENT
    102  
 
       
Section 10.1 Appointment and Duties
    102  
Section 10.2 Binding Effect
    103  
Section 10.3 Use of Discretion
    104  
Section 10.4 Delegation of Rights and Duties
    104  
Section 10.5 Reliance and Liability
    104  
Section 10.6 the Administrative Agent Individually
    105  
Section 10.7 Lender Credit Decision
    105  
Section 10.8 Expenses; Indemnities
    106  
Section 10.9 Resignation of the Administrative Agent or L/C Issuer
    106  
Section 10.10 Release of Collateral or Guarantors
    107  
Section 10.11 Additional Secured Parties
    108  
 
       
ARTICLE 11 MISCELLANEOUS
    109  
 
       
Section 11.1 Amendments, Waivers, Etc
    109  
Section 11.2 Assignments and Participations; Binding Effect
    110  
Section 11.3 Costs and Expenses
    113  
Section 11.4 Indemnities
    114  
Section 11.5 Survival
    115  
Section 11.6 Limitation of Liability for Certain Damages
    115  
Section 11.7 Lender-Creditor Relationship
    115  
Section 11.8 Right of Setoff
    115  
Section 11.9 Sharing of Payments, Etc
    116  
Section 11.10 Marshaling; Payments Set Aside
    116  
Section 11.11 Notices
    116  
Section 11.12 Electronic Transmissions
    117  
Section 11.13 Governing Law
    118  
Section 11.14 Jurisdiction
    118  
Section 11.15 Waiver of Jury Trial
    119  
Section 11.16 Severability
    119  
Section 11.17 Execution in Counterparts
    119  
Section 11.18 Entire Agreement
    119  
Section 11.19 Use of Name
    119  
Section 11.20 Non-Public Information; Confidentiality
    120  
Section 11.21 Patriot Act Notice
    120  
 
       
ARTICLE 12 CROSS-GUARANTY
    120  
 
       
Section 12.1 Cross-Guaranty
    120  
Section 12.2 Waivers by Borrowers
    121  
Section 12.3 Benefit of Guaranty
    121  
Section 12.4 Subordination of Subrogation, Etc
    121  
Section 12.5 Election of Remedies
    122  
Section 12.6 Limitation
    122  
Section 12.7 Contribution with Respect to Guaranty Obligations
    123  
Section 12.8 Liability Cumulative
    123  

4

--------------------------------------------------------------------------------

 

SCHEDULES

     
Schedule I
  Loan Commitments
Schedule 4.3
  Capitalization
Schedule 4.12
  Labor Matters
Schedule 4.14
  Environmental Matters
Schedule 4.21
  Health Care Permits
Schedule 8.1
  Indebtedness
Schedule 8.2
  Liens
Schedule 8.3
  Investments
Schedule 8.9
  Affiliate Transactions
Schedule 8.10
  Contractual Obligations

EXHIBITS

     
Exhibit A
  Form of Assignment
Exhibit B-1
  Form of Revolving Note
Exhibit B-2
  Form of Term Note
Exhibit C
  Form of Notice of Borrowing
Exhibit D
  Form of Swingline Request
Exhibit E
  Form of L/C Request
Exhibit F
  Form of Notice of Conversion or Continuation
Exhibit G
  Form of Compliance Certificate

 

5

--------------------------------------------------------------------------------

 

          THIS CREDIT AGREEMENT, DATED AS OF OCTOBER 1, 2010, IS ENTERED INTO
AMONG CBAY INC., A DELAWARE CORPORATION (“CBAY”), MEDQUIST INC., A NEW JERSEY
CORPORATION (“MEDQUIST”), MEDQUIST TRANSCRIPTIONS, LTD., A NEW JERSEY
CORPORATION (“MEDQUIST TRANSCRIPTIONS”, AND TOGETHER WITH CBAY AND MEDQUIST, THE
“BORROWERS”), CBAYSYSTEMS HOLDINGS LIMITED, A COMPANY INCORPORATED IN THE
BRITISH VIRGIN ISLANDS AND AS SUCH ENTITY MAY BE CONVERTED TO A DELAWARE
CORPORATION PURSUANT TO SECTION 265 OF THE DELAWARE GENERAL CORPORATION LAW
(“HOLDINGS”), MEDQUIST, AS BORROWER REPRESENTATIVE, THE LENDERS (AS DEFINED
BELOW), THE L/C ISSUERS (AS DEFINED BELOW) AND GENERAL ELECTRIC CAPITAL
CORPORATION (“GE CAPITAL”), AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT FOR THE
LENDERS AND THE L/C ISSUERS (IN SUCH CAPACITY, AND TOGETHER WITH ITS SUCCESSORS
AND PERMITTED ASSIGNS, THE “ADMINISTRATIVE AGENT”).
W I T N E S S E T H:
          WHEREAS, the Borrowers have requested, and Lenders have agreed to make
available to Borrowers, certain credit facilities upon and subject to the terms
and conditions set forth in this Agreement;
          WHEREAS, the Borrowers desire to secure all of their Obligations under
the Loan Documents by granting to the Administrative Agent, for the benefit of
the Administrative Agent, Lenders and the other Secured Parties, a security
interest in and lien upon substantially all of their property;
          WHEREAS, Holdings, who, directly or indirectly, owns all of the Stock
and Stock Equivalents of CBay and a majority of the Stock and Stock Equivalents
of each other Borrower, is willing to guaranty all of the Obligations pursuant
to, and in accordance with, the Guaranty and Security Agreement;
          WHEREAS, subject to the terms hereof, each Subsidiary of Holdings
(other than Excluded Foreign Subsidiaries as more particularly set forth herein)
is willing to guaranty all of the Obligations of the Borrowers and to grant to
the Administrative Agent, for the benefit of the Administrative Agent, Lenders
and the other Secured Parties, a security interest in and lien upon
substantially all of its property;
          NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
          Section 1.1 Defined Terms. As used in this Agreement, the following
terms have the following meanings:
     “Acquired Business” means the assets of Spheris Inc. and its subsidiaries
acquired by the Borrowers pursuant to the terms of the Acquisition Agreement.

6

--------------------------------------------------------------------------------

 

     “Acquisition” means the acquisition by the Borrowers of the Acquired
Business.
     “Acquisition Agreement” means that certain Stock and Asset Purchase
Agreement, dated as of February 2, 2010, by and among Spheris Inc. and certain
of its affiliates as sellers and CBay and MedQuist as purchasers.
     “Additional Available Cash” means, on any date, (i) aggregate Excess Cash
Flow of Holdings for periods after the Closing Date for which audited financial
statements and related Compliance Certificates have been delivered pursuant to
Section 6.1(c) and (d) after the Closing Date not required to be paid to the
Administrative Agent pursuant to Section 2.8(a) plus (ii) aggregate Net Cash
Proceeds arising from the issuance or Sale by any Group Member of its own Stock
(other than the Holdings IPO) not required to be paid to the Administrative
Agent pursuant to Section 2.8(b), plus (iii) Available Holdings IPO Proceeds,
plus (iv) Net Cash Proceeds arising from the A-Life Sale, minus (v) any such
amounts, previously used on or prior to such date to make Permitted
Acquisitions, Investments or Restricted Payments, in each case as expressly
permitted hereunder to be made with Additional Available Cash, minus
(vi) prepayments of the Subordinated Notes.
     “Administrative Agent” has the meaning specified in the preamble.
     “Affected Lender” has the meaning specified in Section 2.18(a).
     “Affiliate” means, with respect to any Person, each other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person; provided, however, that no Secured Party shall be an
Affiliate of any Borrower. For purpose of this definition, “control” means the
possession of either (a) the power to vote 10% or more of the Voting Stock of
such Person or (b) the power to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
     “Aggregate Excess Funding Amount” has the meaning specified in Section
2.4(f)(ii).
     “Agreement” means this Credit Agreement.
     “A-Life Sale” means the sale by MedQuist of its equity investment in A-Life
Medical, Inc. pursuant to that certain Agreement and Plan of Merger, dated as of
September 20, 2010, among Ingenix, Inc., Oasis Acquisition Holdings, Inc.,
A-Life Medical, Inc., MedQuist and the other equity holders of A-Life Medical,
Inc., for approximately $19,000,000 in cash at closing and $5,000,000 pursuant
to an eighteen month escrow arrangement.
     “Applicable Margin” means (a) 4.50% per annum with respect to Base Rate
Loans and (b) 5.50% per annum with respect to Eurodollar Rate Loans.
     “Approved Fund” means, with respect to any Lender, any Person (other than a
natural Person) that (a) is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business and (b) is advised or managed by (i) such
Lender, (ii) any Affiliate of such Lender or (iii) any Person (other than an
individual) or any Affiliate of any Person (other than an individual) that
administers or manages such Lender.

7

--------------------------------------------------------------------------------

 

     “Assignment” means an assignment agreement entered into by a Lender, as
assignor, and any Person, as assignee, pursuant to the terms and provisions of
Section 11.2 (with the consent of any party whose consent is required by
Section 11.2), accepted by the Administrative Agent, in substantially the form
of Exhibit A, or any other form approved by the Administrative Agent.
     “Available Holdings IPO Proceeds” means, on any date, (i) the Net Cash
Proceeds received by Holdings from the consummation of the Holdings IPO, minus
(ii) in the case of the initial Holdings IPO, the Designated IPO Proceeds
Amount; provided, however, that in no event shall Available Holdings IPO
Proceeds be less than zero.
     “Bank Product Amount” shall have the meaning set forth in the definition of
“Bank Product Provider”.
     “Bank Product Obligations” shall mean, collectively, all obligations and
other liabilities of any Loan Party to any Bank Product Provider arising with
respect to any Bank Products.
     “Bank Product Provider” means any Person that, at the time it provides any
Bank Products to any Loan Party, (i) is a Lender or an Affiliate of a Lender and
(ii) has provided prior written notice to the Administrative Agent which has
been acknowledged by the Borrower Representative of (x) the existence of such
Bank Product and (y) the maximum dollar amount of obligations arising thereunder
(the “Bank Product Amount”). In no event shall any Bank Product Provider acting
in such capacity be deemed a Lender for purposes hereof to the extent of and as
to Bank Products except that each reference to the term “Lender” in Article 10
shall be deemed to include such Bank Product Provider and in no event shall the
approval of any such person in its capacity as Bank Product Provider be required
in connection with the release or termination of any security interest or Lien
of the Administrative Agent. The Bank Product Amount may be changed from time to
time upon written notice to the Administrative Agent by the applicable Bank
Product Provider.
     “Bank Products” shall mean any of the following services provided to any
Loan Party by any Bank Product Provider: (a) any treasury or other cash
management services, including deposit accounts, automated clearing house
(ACH) origination and other funds transfer, depository (including cash vault and
check deposit), zero balance accounts and sweeps, return items processing,
controlled disbursement accounts, positive pay, lockboxes and lockbox accounts,
account reconciliation and information reporting, payables outsourcing, payroll
processing, trade finance services, investment accounts and securities accounts,
and (b) card services, including credit card (including purchasing card and
commercial card), prepaid cards, including payroll, stored value and gift cards,
merchant services processing, and debit card services.
     “Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.
     “Base Rate” means, for any day, a rate per annum equal to the highest of
(a) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the
United States or, if The Wall Street Journal ceases to quote such rate, the
highest per annum interest rate published by the Federal Reserve Board in
Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the
“bank prime loan” rate or, if such rate is no longer quoted therein, any similar
rate quoted therein (as determined by the Administrative Agent) or any similar
release by the Federal Reserve Board (as determined by the Administrative
Agent), (b) the sum of 0.50% per annum and the Federal

8

--------------------------------------------------------------------------------

 

Funds Rate, and (c) the sum of (x) the Eurodollar Rate calculated for each such
day based on an Interest Period of one month determined two (2) Business Days
prior to such day, plus (y) the excess of the Applicable Margin for Eurodollar
Rate Loans over the Applicable Margin for Base Rate Loans, in each instance, as
of such day. Any change in the Base Rate due to a change in any of the foregoing
shall be effective on the effective date of such change in the “bank prime loan”
rate, the Federal Funds Rate, or the Eurodollar Rate for an Interest Period of
one month.
     “Base Rate Loan” means any Loan that bears interest based on the Base Rate.
     “Benefit Plan” means any employee benefit plan as defined in Section 3(3)
of ERISA (whether governed by the laws of the United States or otherwise) to
which any Group Member incurs or otherwise has any obligation or liability,
contingent or otherwise.
     “Borrower Representative” has the meaning specified in Section 2.19.
     “Borrowers” has the meaning specified in the preamble.
     “Borrowing” means a borrowing consisting of Loans (other than Swing Loans
and Loans deemed made pursuant to Section 2.3 or 2.4) made in one Facility on
the same day by the Lenders according to their respective Commitments under such
Facility.
     “Business Day” means any day of the year that is not a Saturday, Sunday or
a day on which banks are required or authorized to close in New York City and,
when determined in connection with notices and determinations in respect of any
Eurodollar Rate or Eurodollar Rate Loan or any funding, conversion,
continuation, Interest Period or payment of any Eurodollar Rate Loan, that is
also a day on which dealings in Dollar deposits are carried on in the London
interbank market.
     “Capital Expenditures” means, for any Person for any period, the aggregate
of all expenditures, whether or not made through the incurrence of Indebtedness,
by such Person and its Subsidiaries during such period for the acquisition,
leasing (pursuant to a Capital Lease), construction, replacement, repair,
substitution or improvement of fixed or capital assets or additions to
equipment, in each case required to be capitalized under GAAP on a Consolidated
balance sheet of such Person, excluding (a) interest capitalized during
construction and (b) any expenditure to the extent, for purpose of the
definition of Permitted Acquisition, such expenditure is part of the aggregate
amounts payable in connection with, or other consideration for, any Permitted
Acquisition consummated during or prior to such period.
     “Capital Lease” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, any property (whether real, personal or
mixed) by such Person as lessee that has been or should be accounted for as a
capital lease on a balance sheet of such Person prepared in accordance with
GAAP.
     “Capitalized Lease Obligations” means, at any time, with respect to any
Capital Lease, any lease entered into as part of any Sale and Leaseback
Transaction of any Person or any synthetic lease, the amount of all obligations
of such Person that is (or that would be, if such synthetic lease or other lease
were accounted for as a Capital Lease) capitalized on a balance sheet of such
Person prepared in accordance with GAAP.

9

--------------------------------------------------------------------------------

 

     “Cash Collateral Account” means a deposit account or securities account in
the name of the Borrower Representative and under the sole control (as defined
in the applicable UCC) of the Administrative Agent and (a) in the case of a
deposit account, from which the Borrowers may not make withdrawals except as
permitted by the Administrative Agent and (b) in the case of a securities
account, with respect to which the Administrative Agent shall be the only Person
authorized to give entitlement orders with respect thereto without further
consent by the entitlement holder. As used herein, “Cash Collateral Account”
does not include “Controlled Deposit Account” or “Controlled Securities
Account”.
     “Cash Equivalents” means (a) any readily-marketable securities (i) issued
by, or directly, unconditionally and fully guaranteed or insured by the United
States federal government or (ii) issued by any agency of the United States
federal government the obligations of which are fully backed by the full faith
and credit of the United States federal government, (b) any readily-marketable
direct obligations issued by any other agency of the United States federal
government, any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case having a rating
of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial
paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person
organized under the laws of any state of the United States, (d) any
Dollar-denominated time deposit, insured certificate of deposit, overnight bank
deposit or bankers’ acceptance issued or accepted by any commercial bank that is
(A) organized under the laws of the United States, any state thereof or the
District of Columbia, (B) “adequately capitalized” (as defined in the
regulations of its primary federal banking regulators) and (C) has Tier 1
capital (as defined in such regulations) in excess of $250,000,000 and
(e) shares of any United States money market fund that (i) has substantially all
of its assets invested continuously in the types of investments referred to in
clause (a), (b), (c) or (d) above with maturities as set forth in the proviso
below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from
either S&P or Moody’s the highest rating obtainable for money market funds in
the United States; provided, however, that the maturities of all obligations
specified in any of clauses (a), (b), (c) and (d) above shall not exceed
365 days.
     “CBay” has the meaning specified in the preamble.
     “CBay India” means CBay Systems (India) Private Limited, a company
incorporated in India.
     “CBay Management Agreement” means that certain Services Agreement, dated as
of September 19, 2009, between Holdings and CBay.
     “CBay Transcription Agreements” means (i) that certain Sales & Services
Agreement, dated as of March 9, 2010, between MedQuist Transcriptions and CBay
Systems and (ii) that certain Transcription Services Subcontracting Agreement by
and between MedQuist Transcriptions and CBay Systems dated as of March 31, 2009,
each as in effect as of the Signing Date.
     “CBay Systems” means CBay Systems & Services, Inc., a Delaware corporation.
     “CERCLA” means the United States Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.).

10

--------------------------------------------------------------------------------

 

     “Change of Control” means the occurrence of any of the following: (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the Signing Date), other than Sponsor, of Stock representing 35% of the
aggregate ordinary voting power represented by the issued and outstanding Stock
of Holdings, (b) the Sale by Sponsor of all or substantially all of the Stock of
Holdings owned by Sponsor to any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the Signing Date) (but excluding any sale
by Sponsor of all of its shares of Stock of Holdings to the extent such shares
constitute no more than 5% of the shares of Stock of Holdings held by the
Sponsor on the Signing Date and are not sold in a series of related transactions
that would otherwise be a Change of Control), (c) the occupation of a majority
of the seats on the board of directors of Holdings by Persons who were not
directors on the Signing Date and were neither (i) nominated by the board of
directors of Holdings nor (ii) appointed by directors so nominated, (c) Holdings
ceases, directly or indirectly, to own and control, beneficially and of record,
ninety-five percent (95%) of the issued and outstanding Voting Stock and Stock
Equivalents of CBay on a fully diluted basis (as the same may be adjusted for
any combination, recapitalization or reclassification into a greater or smaller
number of shares, interests or other unit of equity security), (d) CBay ceases,
directly or indirectly, to own and control, beneficially and of record, a
percentage equal to or greater than the percentage owned and controlled as of
the Signing Date of the issued and outstanding Voting Stock and Stock
Equivalents of MedQuist on a fully diluted basis (other than through the
exercise of options existing on the Signing Date) or (e) a “Change of Control”
or any term of similar effect, as defined in any Subordinated Note Document.
     “Closing Date” means the first date on which all of the conditions
precedent set forth in Section 3.1 have been satisfied or duly waived and any
Term Loan is made.
     “Code” means the U.S. Internal Revenue Code of 1986, as amended.
     “Collateral” means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is granted or purported to be granted pursuant to any Loan Document.
     “Collection Account” has the meaning specified in Section 2.13(a).
     “Commitment” means, with respect to any Lender, such Lender’s Revolving
Credit Commitment and Term Loan Commitment.
     “Compliance Certificate” means a certificate substantially in the form of
Exhibit G.
     “Consolidated” means, with respect to any Person, the accounts of such
Person and its Subsidiaries consolidated in accordance with GAAP.
     “Consolidated Cash Interest Expense” means, with respect to any Person for
any period, the Consolidated Interest Expense of such Person for such period
less the sum of, in each case to the extent included in the definition of
Consolidated Interest Expense, (a) the amortized amount of debt discount and
debt issuance costs, (b) charges relating to write-ups or write-downs in the
book or carrying value of existing Consolidated Total Debt, (c) interest payable
in evidences of

11

--------------------------------------------------------------------------------

 

Indebtedness or by addition to the principal of the related Indebtedness and
(d) other non-cash interest.
     “Consolidated Current Assets” means, with respect to any Person at any
date, the total Consolidated current assets of such Person at such date other
than cash, Cash Equivalents and any Indebtedness owing to such Person or any of
its Subsidiaries by Affiliates of such Person.
     “Consolidated Current Liabilities” means, with respect to any Person at any
date, all liabilities of such Person and its Subsidiaries at such date that
should be classified as current liabilities on a Consolidated balance sheet of
such Person in accordance with GAAP; provided, however, that “Consolidated
Current Liabilities” shall exclude the principal amount of the Loans then
outstanding, the current portion of any other long term Indebtedness and accrued
interest payable.
     “Consolidated EBITDA” means, with respect to any Person for any period:
     (a) the Consolidated Net Income of such Person for such period; plus
     (b) the sum of, in each case to the extent deducted in the calculation of
such Consolidated Net Income but without duplication:
     (i) any provision for United States federal income taxes or other taxes
measured by net income;
     (ii) Consolidated Interest Expense, amortization of debt discount and
commissions and other fees and charges associated with Indebtedness (except
amortization of debt discount, expenses and fees related to the consummation of
the Related Transactions);
     (iii) any loss from extraordinary items as defined by GAAP;
     (iv) any depreciation, depletion and amortization expense;
     (v) any aggregate net loss on the Sale of property (other than accounts (as
defined under the applicable UCC) and inventory) outside the Ordinary Course of
Business;
     (vi) expenses and fees paid in cash associated with the Related
Transactions accrued in the Fiscal Years ending on December 31, 2010 or
December 31, 2011 and amortization of debt discount, in the aggregate not to
exceed $14,000,000;
     (vii) for purposes of calculating Consolidated EBITDA for Holdings (and not
Consolidated EBITDA of MedQuist), fees and expenses, and any unusual or
non-recurring cash charges, related to the Exchange Offer and the Holdings IPO
and the issuance of equity of Holdings in connection therewith;
     (viii) any other non-cash expenditure, charge or loss for such period
(other than any non-cash expenditure, charge or loss relating to write-offs,
write-downs or reserves with respect to accounts and inventory), including the
amount of any compensation deduction as the result of any grant of Stock or
Stock Equivalents to

12

--------------------------------------------------------------------------------

 

employees, officers, directors or consultants, or any other long-term incentive
arrangement;
     (ix) any non-recurring loss, including severance and restructuring costs
related to the Acquisition and the integration of the Acquired Business in an
aggregate amount not to exceed $5,500,000;
     (x) any unusual or non-recurring cash losses, cash charges or cash
expenses, including severance and restructuring costs, related to Permitted
Acquisitions or Permitted Indebtedness or equity issuances of Stock or Stock
Equivalents permitted hereunder (excluding any equity issuances in connection
with the Exchange Offer or the Holdings IPO);
     (xi) costs of legal proceedings and settlements with respect to those
matters disclosed in Item 3 of MedQuist’s Annual Report on Form 10-K as of
December 31, 2009 filed on March 12, 2010, in an amount not to exceed $5,000,000
in any trailing twelve-month period; and
     (xii) aggregate non-cash foreign exchange losses resulting from foreign
currency fluctuation or hedging activity related thereto; minus
     (c) the sum of, in each case to the extent included in the calculation of
such Consolidated Net Income and without duplication:
     (i) any credit for United States federal income taxes or other taxes
measured by net income;
     (ii) any gain from extraordinary items and any other non-recurring gain;
     (iii) any aggregate net gain from the Sale of property (other than accounts
(as defined in the applicable UCC) and inventory) out of the Ordinary Course of
Business by such Person;
     (iv) any other non-cash gain, including any reversal of a charge referred
to in clause (b)(vii) above by reason of a decrease in the value of any Stock or
Stock Equivalent;
     (v) any other cash payment in respect of expenditures, charges and losses
that have been added to Consolidated EBITDA of such Person pursuant to clause
(b)(vii) above in any prior period; and
     (vi) aggregate non-cash foreign exchange gains resulting from foreign
currency fluctuation or hedging activity related thereto.
     Notwithstanding the above, for purposes of calculating the condition
precedent set forth in Section 3.3(d) and covenants under Article 5 and
Article 8, Consolidated EBITDA for the following Fiscal Quarters shall be deemed
to be the amount set forth opposite such Fiscal Quarter below:

13

--------------------------------------------------------------------------------

 

          Fiscal Quarter Ended   Consolidated EBITDA  
September 30, 2009
  $ 22,316,000  
 
       
December 31, 2009
  $ 23,540,000  
 
       
March 31, 2010
  $ 19,385,000  
 
       
June 30, 2010
  $ 21,911,000  

     “Consolidated Interest Coverage Ratio” means, with respect to any Person
for any period, the ratio of (a) Consolidated EBITDA of such Person for such
period to (b) Consolidated Cash Interest Expense of such Person for such period.
     “Consolidated Interest Expense” means, for any Person for any period,
(a) Consolidated total interest expense of such Person and its Subsidiaries for
such period and including, in any event, (i) interest capitalized during such
period and net losses under Interest Rate Contracts for such period and (ii) all
fees, charges, commissions, discounts and other similar obligations (other than
reimbursement obligations) with respect to letters of credit, bank guarantees,
banker’s acceptances, surety bonds and performance bonds (whether or not
matured) payable by such Person and its Subsidiaries during such period minus
(b) the sum of (i) Consolidated net gains of such Person and its Subsidiaries
under Interest Rate Contracts for such period and (ii) Consolidated interest
income of such Person and its Subsidiaries for such period.
     “Consolidated Net Debt” means, with respect to any person, as of any date,
the Consolidated Total Debt of such Person net of all cash and Cash Equivalents
held by such Person and its Consolidated Subsidiaries.
     “Consolidated Net Income” means, with respect to any Person, for any
period, the Consolidated net income (or loss) of such Person and its
Subsidiaries for such period; provided, however, that the following shall be
excluded: (a) the net income of any other Person in which such Person or one of
its Subsidiaries has a joint interest with a third party (which interest does
not cause the net income of such other Person to be Consolidated into the net
income of such Person), except to the extent of the amount of dividends or
distributions paid to such Person or Subsidiary, (b) the net income of any
Subsidiary of such Person that is, on the last day of such period, subject to
any restriction or limitation on the payment of dividends or the making of other
distributions, to the extent of such restriction or limitation and (c) the net
income of any other Person arising prior to such other Person becoming a
Subsidiary of such Person or merging or consolidating into such Person or its
Subsidiaries, other than any Permitted Acquisition, in which case Consolidated
Net Income shall include the net income of such Person measured on a Pro Forma
Basis. For the avoidance of doubt, the net income (or loss) of A Life Medical
Inc. shall not be included in the Consolidated Net Income of Holdings or
MedQuist.
     “Consolidated Net Leverage Ratio” means, with respect to any Person, as of
any date, the ratio of (a) Consolidated Net Debt of such Person outstanding as
of such date to (b) Consolidated

14

--------------------------------------------------------------------------------

 

EBITDA for such Person for the period of four consecutive Fiscal Quarters ending
on or before such date.
     “Consolidated Senior Debt” means, as of any date, (i) the Consolidated
Total Debt of Holdings less (ii) all Indebtedness evidenced by the Subordinated
Notes.
     “Consolidated Senior Leverage Ratio” means, with respect to any Person as
of any date, the ratio of (a) Consolidated Senior Debt of such Person
outstanding as of such date to (b) Consolidated EBITDA for such Person for the
last period of four (4) consecutive Fiscal Quarters ending on or before such
date.
     “Consolidated Total Debt” of any Person means all Indebtedness of a type
described in clause (a), (b), (c), (d), (f) or (g) of the definition thereof
and, without duplication, all Guaranty Obligations with respect to any such
Indebtedness, in each case of such Person and its Subsidiaries on a Consolidated
basis.
     “Consolidated Total Leverage Ratio” means, with respect to any Person as of
any date, the ratio of (a) Consolidated Total Debt of such Person outstanding as
of such date to (b) Consolidated EBITDA for such Person for the last period of
four (4) consecutive Fiscal Quarters ending on or before such date.
     “Constituent Documents” means, with respect to any Person, collectively
and, in each case, together with any modification of any term thereof to the
extent not prohibited hereunder, (a) the articles of incorporation, certificate
of incorporation, constitution or certificate of formation of such Person,
(b) the bylaws, operating agreement or joint venture agreement of such Person,
(c) any other constitutive, organizational or governing document of such Person,
whether or not equivalent, and (d) any other document setting forth the manner
of election or duties of the directors, officers or managing members of such
Person or the designation, amount or relative rights, limitations and
preferences of any Stock of such Person.
     “Contingent Loan Document Obligations” means (i) contingent indemnification
obligations arising under the Loan Documents for which no claims have been
asserted, (ii) L/C Obligations that are cash collateralized in an amount of at
least 102% of such L/C Obligations or supported by one or more backstop letters
of credit from an issuer, in an amount and in a form reasonably satisfactory to
the L/C Issuer, (iii) contingent Bank Product Obligations not yet due and
(iv) contingent obligations arising under any Secured Hedging Agreement not yet
due.
     “Contractual Obligation” means, with respect to any Person, any provision
of any Security issued by such Person or of any document or undertaking (other
than a Loan Document) to which such Person is a party or by which it or any of
its property is bound or to which any of its property is subject.
     “Control Agreement” means, with respect to any deposit account, any
securities account, commodity account, securities entitlement or commodity
contract, an agreement, in form and substance reasonably satisfactory to the
Administrative Agent, among the Administrative Agent, the financial institution
or other Person at which such account is maintained or with which such
entitlement or contract is carried and the Loan Party maintaining such account,
effective to grant “control” (as defined under the applicable UCC) over such
account to the Administrative Agent.

15

--------------------------------------------------------------------------------

 

     “Controlled Deposit Account” means each deposit account (including all
funds on deposit therein) that is the subject of an effective Control Agreement
and that is maintained by any Loan Party with a financial institution approved
by the Administrative Agent.
     “Controlled Securities Account” means each securities account or commodity
account (including all financial assets held therein and all certificates and
instruments, if any, representing or evidencing such financial assets) that is
the subject of an effective Control Agreement and that is maintained by any Loan
Party with a securities intermediary or commodity intermediary approved by the
Administrative Agent.
     “Copyrights” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
copyrights and all mask work, database and design rights, whether or not
registered or published, all registrations and recordations thereof and all
applications in connection therewith.
     “Corporate Chart” means a document in form reasonably acceptable to the
Administrative Agent and setting forth, as of a date set forth therein, for each
Person that is a Loan Party or a Subsidiary or joint venture of a Loan Party,
(a) the full legal name of such Person, (b) the jurisdiction of organization
and, if organized under the laws of a state of the United States, any
organizational number and tax identification number of such Person, (c) the
location of such Person’s chief executive office (or, if applicable, sole place
of business), (d) the number of shares of each class of Stock of such Person
(other than Holdings) authorized and outstanding and (e) the number and
percentage of such outstanding shares for each such class owned, directly or
indirectly, by each Group Member.
     “Customary Permitted Liens” means, with respect to any Person, any of the
following:
     (a) Liens (i) with respect to the payment of taxes, assessments or other
governmental charges that are not yet overdue or (ii) of suppliers, carriers,
materialmen, warehousemen, workmen or mechanics and other similar Liens that are
not yet overdue for a period of more than 30 days without the commencement of
enforcement or foreclosure, in each case imposed by law or arising in the
Ordinary Course of Business, and, for each of the Liens in clauses (i) and (ii)
above for amounts that are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves or
other appropriate provisions are maintained on the books of such Person in
accordance with GAAP;
     (b) Liens of a collection bank on items in the course of collection arising
under Section 4-208 of the UCC as in effect in the State of New York or any
similar section under any applicable UCC or any similar Requirement of Law of
any foreign jurisdiction;
     (c) pledges or cash deposits made in the Ordinary Course of Business (i) in
connection with workers’ compensation, unemployment insurance or other types of
social security benefits (other than any Lien imposed by ERISA), (ii) to secure
the performance of bids, tenders, leases (other than Capital Leases) sales or
other trade contracts (other than for the repayment of borrowed money) or
(iii) made in lieu of, or to secure the performance of, surety, customs,
reclamation or performance bonds (in each case not related to judgments or
litigation);
     (d) judgment liens (other than for the payment of taxes, assessments or
other governmental charges) securing judgments and other proceedings not
constituting an Event of

16

--------------------------------------------------------------------------------

 

Default under Section 9.1(e) and pledges or cash deposits made in lieu of, or to
secure the performance of, judgment or appeal bonds in respect of such judgments
and proceedings;
     (e) Liens (i) arising by reason of zoning restrictions, easements,
licenses, reservations, restrictions, covenants, rights-of-way, encroachments,
minor defects or irregularities in title (including leasehold title) and other
similar encumbrances on the use of real property or (ii) consisting of leases,
licenses or subleases granted by a lessor, licensor or sublessor on its property
(in each case other than Capital Leases) otherwise permitted under Section 8.4
that, for each of the Liens in clauses (i) and (ii) above, do not, in the
aggregate, materially (x) impair the value or marketability of such real
property or (y) interfere with the ordinary conduct of the business conducted
and proposed to be conducted at such real property;
     (f) Liens of landlords and mortgagees of landlords (i) arising by statute
or under any lease or related Contractual Obligation entered into in the
Ordinary Course of Business, (ii) on fixtures and movable tangible property
located on the real property leased or subleased from such landlord, (iii) for
amounts not overdue for a period of more than 30 days without the commencement
of enforcement or foreclosure or that are being contested in good faith by
appropriate proceedings diligently conducted and (iv) for which adequate
reserves or other appropriate provisions are maintained on the books of such
Person in accordance with GAAP;
     (g) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement;
     (h) licenses (including, without limitation, licenses granted by a Group
Member with respect to its Intellectual Property), sublicenses, leases or
subleases granted to third parties in the Ordinary Course of Business not
interfering with the business of the Group Members;
     (i) Liens in favor of collecting banks arising under Section 4-210 of the
UCC (except to the extent subordinated or waived pursuant to a Control
Agreement);
     (j) Liens (including the right of set-off) in favor of a bank or other
depository institution arising as a matter of law encumbering deposits (except
to the extent subordinated or waived pursuant to a Control Agreement), or Liens
that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of
Indebtedness or (ii) relating to pooled deposit, automatic clearing house or
sweep accounts of the Group Members to permit satisfaction of overdraft or
similar obligations incurred in the Ordinary Course of Business of the Group
Members;
     (k) Liens arising out of consignment or similar arrangements for the sale
of goods entered into by Group Member in the Ordinary Course of Business;
     (l) Liens in favor of customs and revenue authorities arising as a matter
of law that secure payment of customs duties in connection with the importation
of goods of any Group Member in the Ordinary Course of Business;
     (m) Liens (i) on cash earnest money deposits in favor of the seller of any
Property to be acquired in an Investment permitted pursuant to Section 8.3 to be
applied against the purchase price for such Investment and (ii) consisting of an
agreement to sell, transfer, lease or otherwise dispose of any Property in a
transaction permitted under Section 8.4 and affecting only the Property that is
the subject of such agreement, in each case, solely to the extent such
Investment

17

--------------------------------------------------------------------------------

 

or sale, disposition, transfer or lease would have been permitted on the date of
the creation of such Lien;
     (n) Liens that are in the nature of (i) a common law or statutory right of
set-off arising solely by operation of applicable law, or (ii) a right of
set-off, relating to purchase orders and other agreements entered into with
customers of the Group Members in the Ordinary Course of Business (except to the
extent such Lien was waived or subordinated to the Obligations pursuant to the
terms of the applicable Contractual Obligations or any amendment thereto);
     (o) Liens on an insurance policy and the proceeds thereof securing the
financing of the insurance premiums payable with respect to such policy; and
     (p) the title and interest of a lessor or sublessor in and to personal
property leased or subleased (other than through a Capital Lease), in each case
extending only to such personal property.
     “Default” means any Event of Default and any event that, with the passing
of time or the giving of notice or both, would become an Event of Default.
     “Designated IPO Proceeds Amount” means $19,500,000, which represents the
Net Cash Proceeds from the Holdings IPO available to fund the transactions
permitted under Section 8.5(h) and Sections 8.9(j) and (k).
     “Disclosure Documents” means, collectively, (a) all confidential
information memoranda and related materials prepared in connection with the
syndication of the Facilities and (b) all other documents filed by any Group
Member with the United States Securities and Exchange Commission.
     “Dollars” and the sign “$” each mean the lawful money of the United States
of America.
     “Domestic Person” means any “United States person” as defined in
Section 7701(a)(30) of the Code.
     “E-Fax” means any system used to receive or transmit faxes electronically.
     “Electronic Transmission” means each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
     “Eligible Assignee” has the meaning specified in Section 11.2.
     “Environmental Laws” means all Requirements of Law and Permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health and safety (to the extent related to Releases,
Remedial Action or protection from or exposure to Hazardous Material), the
environment and natural resources, including CERCLA, the SWDA, the Hazardous
Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic
Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C.
§§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.),

18

--------------------------------------------------------------------------------

 

the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all regulations
promulgated under any of the foregoing, all analogous Requirements of Law and
Permits and any environmental transfer of ownership notification or approval
statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6
et seq.).
     “Environmental Liabilities” means all Liabilities (including costs of
Remedial Actions, natural resource damages and costs and expenses of
investigation and feasibility studies) that may be imposed on, incurred by or
asserted against any Group Member as a result of, or related to, any claim,
suit, action, investigation, proceeding or demand by any Person, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law or otherwise, arising under any Environmental Law or
in connection with any environmental, health or safety condition or with any
Release and resulting from the ownership, lease, sublease or other operation or
occupation of property by any Group Member, whether on, prior to or after the
Signing Date.
     “ERISA” means the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
     “ERISA Affiliate” means, collectively, any Group Member, and any Person
under common control, or treated as a single employer, with any Group Member,
within the meaning of Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
     “ERISA Event” means any of the following: (a) a reportable event described
in Section 4043 of ERISA (as to which the PBGC has not waived, under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043, the requirement of
Section 4043(a) of ERISA that it be notified of such event) with respect to a
Title IV Plan, (b) the withdrawal of any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA, (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan, (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA, or the receipt by any ERISA Affiliate
of any notice, that any Multiemployer Plan is in endangered or critical status
under Section 305 of ERISA, (e) the filing of a notice of intent to terminate a
Title IV Plan (or treatment of a plan amendment as termination) under
Section 4041 of ERISA, (f) the institution of proceedings to terminate a Title
IV Plan or a Multiemployer Plan by the PBGC, (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due, there
being or arising any “unpaid minimum required contribution” or “accumulated
funding deficiency” (as defined or otherwise set forth in Section 4971 of the
Code or Part 3 of Subtitle B of Title 1 of ERISA) with respect to a
Multiemployer Plan or a Title IV Plan (whether or not waived), the filing of any
request for or receipt of a minimum funding waiver under Section 412 of the Code
with respect to any Benefit Plan, or that such filing may be reasonably be
expected to be made, or a determination that any Title IV Plan is, or is
reasonably expected to be, in at-risk status under Title IV of ERISA; (h) the
imposition of a lien under Section 430 of the Code or Section 303 or 4068 of
ERISA on any property (or rights to property, whether real or personal) of any
ERISA Affiliate, (i) the failure of a Benefit Plan or any trust thereunder
intended to qualify for tax exempt status under Section 401 or 501 of the Code
or other Requirements of Law to qualify thereunder; and (j) engaging in a
non-exempt prohibited transaction within the meaning of Section 4975 of the Code
or Section 406 of ERISA; and (k) any other event or condition that might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer

19

--------------------------------------------------------------------------------

 

Plan or for the imposition of any liability upon any ERISA Affiliate under Title
IV of ERISA, other than for PBGC premiums due but not delinquent.
     “E-Signature” means the process of attaching to or logically associating
with an Electronic Transmission an electronic symbol, encryption, digital
signature or process (including the name or an abbreviation of the name of the
party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
     “E-System” means any electronic system, including Intralinks® and ClearPar®
and any other Internet or extranet-based site, whether such electronic system is
owned, operated or hosted by the Administrative Agent, any of its Related
Persons or any other Person, providing for access to data protected by passcodes
or other security system.
     “Eurodollar Base Rate” means, with respect to any Interest Period for any
Eurodollar Rate Loan, the rate determined by the Administrative Agent to be the
offered rate for deposits in Dollars in the London interbank market for the
applicable Interest Period appearing on the Reuters Screen LIBOR01 page as of
11:00 a.m. (London time) on the second full Business Day next preceding the
first day of each Interest Period. In the event that such rate does not appear
on the Reuters Screen LIBOR01 page at such time, the “Eurodollar Base Rate”
shall be determined by reference to such other comparable publicly available
service for displaying the offered rate for deposit in Dollars in the London
interbank market as may be selected by the Administrative Agent and, in the
absence of availability, such other method to determine such offered rate as may
be selected by the Administrative Agent in its sole discretion.
     “Eurodollar Rate” means, a rate per annum, with respect to any Interest
Period, equal to the higher of (a) the ratio of (i) the Eurodollar Base Rate
with respect to such Interest Period for such Eurodollar Rate Loan to (ii) the
difference between the number one and the Eurodollar Reserve Requirements with
respect to such Interest Period and for such Eurodollar Rate Loan and (b) 1.75%.
     “Eurodollar Rate Loan” means any Loan that bears interest based on the
Eurodollar Rate.
     “Eurodollar Reserve Requirements” means, with respect to any Interest
Period and for any Eurodollar Rate Loan, a rate per annum equal to the
aggregate, without duplication, of the maximum rates (expressed as a decimal
number) of reserve requirements in effect two (2) Business Days prior to the
first day of such Interest Period (including basic, supplemental, marginal and
emergency reserves) under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as “eurocurrency liabilities” in Regulation D of the Federal Reserve Board)
maintained by a member bank of the United States Federal Reserve System.
     “Event of Default” has the meaning specified in Section 9.1.
     “Excess Availability” means, at any time, the remainder of (a) the
aggregate Revolving Credit Commitments less (b) the Revolving Credit
Outstandings.
     “Excess Cash Flow” means, for any Person for any period,
     (a) Consolidated EBITDA of such Person;

20

--------------------------------------------------------------------------------

 

     (b) minus, without duplication and only in each case to the extent included
in calculation of Consolidated EBITDA:
     (i) any cash principal payment on the Loans during such period (but only,
in the case of payment in respect of Revolving Loans, to the extent that the
Revolving Credit Commitments are permanently reduced by the amount of such
payment) other than any mandatory prepayment required pursuant to Section 2.8(a)
because of the existence of Excess Cash Flow for a prior period;
     (ii) any scheduled cash principal payment made by such Person or any of its
Subsidiaries during such period on any Capitalized Lease Obligation or other
Indebtedness (but only, if such Indebtedness may be reborrowed, to the extent
such payment results in a permanent reduction in commitments thereof and
excluding principal payments on Indebtedness evidenced by the Subordinated
Notes);
     (iii) any Capital Expenditure made by such Person or any of its
Subsidiaries during such period to the extent permitted by this Agreement,
excluding any such Capital Expenditure to the extent financed through the
incurrence of Capitalized Lease Obligations or any other long-term Indebtedness
(excluding the Obligations);
     (iv) the Consolidated Cash Interest Expense of such Person for such period;
     (v) any cash losses from extraordinary items;
     (vi) any cash payment made during such period to satisfy obligations for
United States federal income taxes or other taxes measured by net income;
     (vii) any increase in the Working Capital of such Person during such period
(measured as the excess of such Working Capital at the end of such period over
such Working Capital at the beginning of such period);
     (viii) consideration paid in cash with respect to the purchase price of any
Permitted Acquisition or Investment made pursuant to Section 8.3(o), except to
the extent such cash consideration is funded from the issuance of Indebtedness
or Stock of such Person or its Subsidiaries or reduces Additional Available Cash
pursuant to clause (v) of the definition thereof; provided, however, that to the
extent the A-Life Sale is consummated during such Fiscal Year, the cash
consideration paid with respect to any Permitted Acquisition or Investment made
pursuant to Section 8.3(o) that reduces Additional Available Cash pursuant to
clause (v) of the definition thereof shall, notwithstanding the foregoing, be
deducted in calculating Excess Cash Flow to the extent of any gain included in
Consolidated EBITDA as a result of the A-Life Sale;
     (ix) cash payments in respect of severance and restructuring costs related
to the Acquisition and the integration of the Acquired Business as set forth in
reasonable detail in any such applicable Compliance Certificate in an aggregate
amount not to exceed $5,500,000,
     (x) cash payments of fees and expenses related to the Related Transactions
and paid prior to the end of the Fiscal Year ending December 31, 2011 as set
forth in

21

--------------------------------------------------------------------------------

 

reasonable detail in any such applicable Compliance Certificate in an aggregate
amount not to exceed $14,000,000;
     (xi) to the extent added back in calculating Consolidated EBITDA pursuant
to clause (b)(x) of the definition thereof, any unusual or non-recurring cash
losses, cash charges or cash expenses, including severance and restructuring
costs, related to Permitted Acquisitions or Permitted Indebtedness (regardless
of when paid) or equity issuances of Stock or Stock Equivalents permitted
hereunder (excluding any equity issuances in connection with the Exchange Offer
or the Holdings IPO) as set forth in reasonable detail in any such applicable
Compliance Certificate; and
     (xii) to the extent added back in calculating Consolidated EBITDA pursuant
to clause (b)(xi) of the definition thereof, costs of legal proceedings and
settlements with respect to those matters disclosed in Item 3 of MedQuist’s
Annual Report on Form 10-K as of December 31, 2009 filed on March 12, 2010 in an
aggregate amount not to exceed $5,000,000;
     (c) plus, without duplication,
     (i) to the extent included in the calculation of Consolidated EBITDA
pursuant to clause (b)(i) of the definition thereof, any provision for United
States federal income taxes or other taxes measured by net income;
     (ii) to the extent the calculation of Excess Cash Flow is based on the
Consolidated EBITDA of MedQuist rather than Holdings, the total amount of cash
payments made by MedQuist or its Subsidiaries to Holdings or its Subsidiaries
(other than MedQuist and its Subsidiaries) in excess of (x) payments required to
be made under the CBay Transcription Agreements and (y) up to $2,000,000 of
payments made pursuant to the CBay Management Agreement;
     (iii) any decrease in the Working Capital of such Person during such period
(measured as the excess of such Working Capital at the beginning of such period
over such Working Capital at the end thereof).
     “Exchange Offer” means one or more transactions in which shareholders of
MedQuist other than CBay exchange their Stock of MedQuist for shares of common
stock of Holdings, cash or a combination of such shares and cash.
     “Excluded Foreign Subsidiary” means any Subsidiary that is not a Domestic
Person unless (i) such Subsidiary has granted a Lien on any of its property as
collateral for, or incurred any Guaranty Obligations with respect to, any
Indebtedness of any Loan Party (other than Obligations) or (ii) more than 65% of
the Voting Stock of such Subsidiary has been pledged as collateral for any such
Indebtedness.
     “Existing Agent” means General Electric Capital Corporation, in its
capacity as administrative agent under the Existing Credit Agreement.
     “Existing CBay Debt” means (a) those certain 6.00% Convertible Senior PIK
Notes due 2015 which mature on August 6, 2015 issued by CBay to Koninklijke
Philips Electronics N.V.

22

--------------------------------------------------------------------------------

 

and (b) the credit facilities provided by K Bank to CBay and certain of its
Affiliates as of the Signing Date.
     “Existing Credit Agreement” means that certain Credit Agreement, dated as
of April 22, 2010, among MedQuist, MedQuist Transcriptions, the institutions
party thereto as lenders and issuers and the Existing Agent.
     “Existing Subordinated Note” means that certain Subordinated Promissory
Note, dated July 30, 2010, in the amount of $17,500,000 issued by MedQuist
Transcriptions to Black Horse Capital LP, Black Horse Capital (QP) LP, and Black
Horse Capital Master Fund Ltd.
     “Facilities” means (a) the Term Loan Facility and (b) the Revolving Credit
Facility.
     “Federal Flood Insurance” means Federally backed Flood Insurance available
under the National Flood Insurance Program to owners of real property
improvements located in Special Flood Hazard Areas in a community participating
in the National Flood Insurance Program.
     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as determined by the Administrative
Agent in its sole discretion.
     “Federal Reserve Board” means the Board of Governors of the United States
Federal Reserve System and any successor thereto.
     “Fee Letter” means the letter agreement, dated as of the Signing Date,
addressed to Holdings and MedQuist from the Administrative Agent and accepted by
Holdings and MedQuist, with respect to certain fees to be paid from time to time
to the Administrative Agent and its Related Persons and the Lenders.
     “FEMA” means the Federal Emergency Management Agency, a component of the
U.S. Department of Homeland Security that administers the National Flood
Insurance Program.
     “FIRREA” means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended.
     “Financial Statement” means each financial statement delivered pursuant to
Section 4.4 or 6.1.
     “Fiscal Quarter” means each three (3) fiscal month period ending on
March 31, June 30, September 30 or December 31.
     “Fiscal Year” means each twelve fiscal month period ending on December 31.
     “Flood Insurance” means, for any real property located in a Special Flood
Hazard Area, Federal Flood Insurance or private insurance that meets the
requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance
Guidelines. Flood Insurance shall be in an amount equal to the full, unpaid
balance of the Loans and any prior liens on the real property up to the maximum
policy limits set under the National Flood Insurance Program, or as otherwise
required by the Administrative Agent, with deductibles not to exceed $50,000.

23

--------------------------------------------------------------------------------

 

     “GAAP” means generally accepted accounting principles in the United States
of America, as in effect from time to time, set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, in the statements and pronouncements of the
Financial Accounting Standards Board and in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession that are applicable to the circumstances as of the date of
determination. Subject to Section 1.3, all references to “GAAP” shall be to GAAP
applied consistently with the principles used in the preparation of the
Financial Statements described in Section 4.4(a).
     “GE Capital” has the meaning specified in the preamble.
     “Governmental Authority” means any nation, sovereign or government, any
state or other political subdivision thereof, any agency, authority or
instrumentality thereof and any entity or authority exercising executive,
legislative, taxing, judicial, regulatory or administrative functions of or
pertaining to government, including any central bank, stock exchange, regulatory
body, arbitrator, public sector entity, supra-national entity (including the
European Union and the European Central Bank) and any self-regulatory
organization (including the National Association of Insurance Commissioners).
     “Governmental Payor Programs” means all governmental third party payor
programs in which any Group Member participates, including, without limitation,
Medicare, Medicaid, TRICARE or any other federal or state health care programs.
     “Group Members” means, collectively, Holdings and its Subsidiaries.
     “Group Members’ Accountants” means KPMG LLP or other nationally-recognized
independent registered certified public accountants reasonably acceptable to the
Administrative Agent.
     “Guarantor” means Holdings and each Subsidiary Guarantor.
     “Guaranty and Security Agreement” means that certain Guaranty and Security
Agreement, dated as of the Closing Date, among the Administrative Agent, the
Borrowers and the Guarantors from time to time party thereto.
     “Guaranty Obligation” means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person for any
Indebtedness, lease, dividend or other obligation (the “primary obligation”) of
another Person (the “primary obligor”), if the purpose or intent of such Person
in incurring such liability, or the economic effect thereof, is to guarantee
such primary obligation or provide support, assurance or comfort to the holder
of such primary obligation or to protect or indemnify such holder against loss
with respect to such primary obligation, including (a) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the Ordinary
Course of Business), co-making, discounting with recourse or sale with recourse
by such Person of any primary obligation, (b) the existence of any Lien, or any
right, contingent or otherwise, to receive a Lien, on the property of such
Person securing any part of any primary obligation and (c) any liability of such
Person for a primary obligation through any Contractual Obligation (contingent
or otherwise) or other arrangement (i) to purchase, repurchase or otherwise
acquire such primary obligation or any security therefor or to provide funds for
the payment or discharge of such primary obligation (whether in the form of a
loan, advance, stock purchase, capital contribution or otherwise), (ii) to
maintain the solvency, working capital, equity

24

--------------------------------------------------------------------------------

 

capital or any balance sheet item, level of income or cash flow, liquidity or
financial condition of any primary obligor, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party to any
Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee)
any property, or to purchase or sell services, primarily for the purpose of
enabling the primary obligor to satisfy such primary obligation or to protect
the holder of such primary obligation against loss or (v) to supply funds to or
in any other manner invest in, such primary obligor (including to pay for
property or services irrespective of whether such property is received or such
services are rendered); provided, however, that “Guaranty Obligations” shall not
include (x) endorsements for collection or deposit in the Ordinary Course of
Business and (y) product warranties given in the Ordinary Course of Business.
The outstanding amount of any Guaranty Obligation shall equal the outstanding
amount of the primary obligation so guaranteed or otherwise supported or, if
lower, the stated maximum amount for which such Person may be liable under such
Guaranty Obligation.
     “Hazardous Material” means any substance, material or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including petroleum or any fraction thereof,
asbestos, polychlorinated biphenyls and radioactive substances.
     “Health Care Laws” means, collectively, any and all federal, state or local
laws, rules, regulations, manuals, orders, ordinances, statutes, guidelines and
requirements issued with respect to regulatory matters relating to the
provision, administration, and/or payment for healthcare products or services,
including, without limitation, to the extent applicable, rules and regulations
governing the operation and administration of Medicare, Medicaid or any other
Government Payor Program, HIPAA, any and all federal, state and local fraud and
abuse laws of any Governmental Authority, including, without limitation, the
federal Anti-Kickback Statute (42 U.S.C. § 1320a-7(b)), the Stark Law (42 U.S.C.
§ 1395nn and § 1395(q)), the civil False Claims Act (31 U.S.C. § 3729 et seq.),
and rules and regulations of the U.S. Food and Drug Administration, as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto.
     “Hedging Agreement” means any Interest Rate Contract, foreign exchange,
swap, option or forward contract, spot, cap, floor or collar transaction, any
other derivative instrument and any other similar transaction and any other
similar agreement or arrangement designed to alter the risks of any Person
arising from fluctuations in any underlying variable.
     “HIPAA” means the Health Insurance Portability and Accountability Act of
1996, as the same may be amended, modified or supplemented from time to time,
any successor statute thereto, any and all rules or regulations promulgated from
time to time thereunder, and any comparable state laws.
     “HIPAA Compliance Plan” has the meaning specified in Section 4.23.
     “Holding Company” means any Person that (i) is an Affiliate of a Permitted
Investor, (ii) is a direct or indirect holder of Stock of Holdings and
(iii) owns no substantial assets other than such Stock.
     “Holdings” has the meaning specified in the preamble.

25

--------------------------------------------------------------------------------

 

     “Holdings IPO” means one or more sales by Holdings of its Stock after the
Closing Date pursuant to one or more underwritten public offerings pursuant to
an effective registration statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, provided that the Net Cash
Proceeds of the first such offering are at least equal to the Designated IPO
Proceeds Amount.
     “Impacted Lender” means any Lender that (a) has failed to fund, and not
cured, loans, participations, advances, or reimbursement obligations under any
other syndicated credit facilities, unless subject to a good faith dispute, or
(b) fails to provide the Administrative Agent, within three (3) Business Days
following the Administrative Agent’s written request, satisfactory assurance
that such Lender will not become a Non-Funding Lender.
     “Indebtedness” of any Person means, without duplication, any of the
following, whether or not matured: (a) all indebtedness for borrowed money,
(b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement and other obligations with respect to
(i) letters of credit, bank guarantees or bankers’ acceptances or (ii) surety,
customs, reclamation or performance bonds (in each case not related to judgments
or litigation) other than those entered into in the Ordinary Course of Business,
(d) all obligations to pay the deferred purchase price of property or services,
other than trade payables incurred in the Ordinary Course of Business, (e) all
obligations created or arising under any conditional sale or other title
retention agreement, regardless of whether the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property, (f) all Capitalized Lease Obligations,
(g) all obligations, whether or not contingent, to purchase, redeem, retire,
defease or otherwise acquire for value any of its own Stock or Stock Equivalents
(or any Stock or Stock Equivalent of a direct or indirect parent entity thereof)
prior to March 31, 2017, valued at, in the case of redeemable preferred Stock,
the greater of the voluntary liquidation preference and the involuntary
liquidation preference of such Stock plus accrued and unpaid dividends, (h) all
net payments that would be required to be made in respect of any Hedging
Agreement in the event of a termination (including an early termination) on the
date of determination and (i) all Guaranty Obligations for obligations of any
other Person constituting Indebtedness of such other Person; provided, however,
that the items in each of clauses (a) through (i) above shall constitute
“Indebtedness” of such Person solely to the extent (x) such Person is liable for
such item or (y) any such item is secured by a Lien on such Person’s property.
     “Indemnified Matters” has the meaning specified in Section 11.4.
     “Indemnitee” has the meaning specified in Section 11.4.
     “Initial Projections” means those financial projections covering the Fiscal
Years ending in 2010 through 2015 and delivered to the Administrative Agent by
the Borrower Representative on August 22, 2010.
     “Intellectual Property” means all rights, title and interests in or
relating to intellectual property and industrial property arising under any
Requirement of Law and all IP Ancillary Rights relating thereto, including all
Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP
Licenses.
     “Interest Period” means, with respect to any Eurodollar Rate Loan, the
period commencing on the date such Eurodollar Rate Loan is made or converted to
a Eurodollar Rate Loan or, if such loan is continued, on the last day of the
immediately preceding Interest Period

26

--------------------------------------------------------------------------------

 

therefor and, in each case, ending 1, 2, 3 or 6 months thereafter, as selected
by the Borrower Representative pursuant hereto; provided, however, that (a) if
any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day,
unless the result of such extension would be to extend such Interest Period into
another such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day, (b) any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of a
calendar month, (c) the Borrower Representative may not select any Interest
Period (i) in the case of Revolving Loans, ending after the Scheduled Revolving
Credit Termination Date and (ii) in the case of Term Loans, ending after the
Term Loan Maturity Date, (d) the Borrower Representative may not select any
Interest Period in respect of Loans having an aggregate principal amount of less
than $5,000,000 and (e) there shall be outstanding at any one time no more than
7 Interest Periods.
     “Interest Rate Contracts” means all interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and interest rate
insurance.
     “Internet Domain Names” means all rights, title and interests (and all
related IP Ancillary Rights) arising under any Requirement of Law in or relating
to Internet domain names.
     “Investment” means, with respect to any Person (a) to own, purchase or
otherwise acquire, in each case whether beneficially or otherwise, any
investment in, including any interest in, any Security of any other Person
(other than any evidence of any Obligation), (b) to purchase or otherwise
acquire, whether in one transaction or in a series of transactions, all or a
significant part of the property of any other Person or a business conducted by
any other Person or all or substantially all of the assets constituting the
business of a division, branch, brand or other unit operation of any other
Person, (c) to incur, or to remain liable under, any Guaranty Obligation for
Indebtedness of any other Person, to assume the Indebtedness of any other Person
or to make, hold, purchase or otherwise acquire any deposit, loan, advance,
commitment to lend or advance, or other extension of credit, excluding deposits
with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable and similar items created in the Ordinary Course
of Business or (d) to make any contribution to the capital of any other Person;
provided, however, that for purposes of Section 8.3(e) and 8.4(b), (i) any
purchase of any property by any Person for more than fair market value shall
constitute an Investment in the seller of such property by such Person to the
extent of such excess over such fair market value and (ii) any Sale of any
property by any Person for less than fair market value shall constitute an
Investment in the purchaser of such property by such Person to the extent of
such deficiency below such fair market value.
     “IP Ancillary Rights” means, with respect to any other Intellectual
Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of, such Intellectual Property and all income,
royalties, proceeds and Liabilities at any time due or payable or asserted under
or with respect to any of the foregoing or otherwise with respect to such
Intellectual Property, including all rights to sue or recover at law or in
equity for any past, present or future infringement, misappropriation, dilution,
violation or other impairment thereof, and, in each case, all rights to obtain
any other IP Ancillary Right.

27

--------------------------------------------------------------------------------

 

     “IP License” means all Contractual Obligations (and all related IP
Ancillary Rights), whether written or oral, granting any right title and
interest in or relating to any Intellectual Property.
     “IRS” means the Internal Revenue Service of the United States and any
successor thereto.
     “Issue” means, with respect to any Letter of Credit, to issue, extend the
expiration date of, renew (including by failure to object to any automatic
renewal on the last day such objection is permitted), increase the face amount
of, or reduce or eliminate any scheduled decrease in the face amount of, such
Letter of Credit, or to cause any Person to do any of the foregoing. The terms
“Issued” and “Issuance” have correlative meanings.
     “L/C Cash Collateral Account” means any Cash Collateral Account
(a) specifically designated as such by the Borrower Representative in a notice
to the Administrative Agent and (b) from and after the effectiveness of such
notice, not containing any funds other than those required under the Loan
Documents to be placed therein.
     “L/C Issuer” means (a) GE Capital or any of its Affiliates and (b) each
Person that hereafter becomes an L/C Issuer with the approval of, and pursuant
to an agreement with and in form and substance satisfactory to, the
Administrative Agent and the Borrowers, in each case in their capacity as L/C
Issuers hereunder and together with their successors.
     “L/C Obligations” means, for any Letter of Credit at any time, the sum of
(a) the L/C Reimbursement Obligations at such time for such Letter of Credit and
(b) the aggregate maximum undrawn face amount of such Letter of Credit
outstanding at such time.
     “L/C Reimbursement Agreement” has the meaning specified in Section 2.4(a).
     “L/C Reimbursement Date” has the meaning specified in Section 2.4(e).
     “L/C Reimbursement Obligation” means, for any Letter of Credit, the
obligation of the Borrowers to the L/C Issuer thereof, as and when matured, to
pay all amounts drawn under such Letter of Credit.
     “L/C Request” has the meaning specified in Section 2.4(b).
     “L/C Sublimit” means $5,000,000.
     “Lehman” means Lehman Brothers Commercial Corporation Asia.
     “Lender” means, collectively, the Swingline Lender and any other financial
institution or other Person that (a) is listed on the signature pages hereof as
a “Lender” or (b) from time to time becomes a party hereto by execution of an
Assignment, in each case together with its successors.
     “Letter of Credit” means any letter of credit Issued pursuant to
Section 2.4.
     “Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a result thereto
and fees, charges and disbursements of financial, legal and other

28

--------------------------------------------------------------------------------

 

advisors and consultants), whether joint or several, whether or not indirect,
contingent, consequential, actual, punitive, treble or otherwise.
     “Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral
assignment, charge, encumbrance, easement, lien (statutory or other), or
preference, priority or other security interest or preferential arrangement in
the nature of a lien, including any conditional sale contract or other title
retention agreement, any assignment of any right to receive income or profits,
the interest of a lessor under a Capital Lease and any synthetic or other
financing lease having substantially the same economic effect as any of the
foregoing (but not the interest of a lessor under an operating lease).
     “Liquidity” means Excess Availability plus cash and Cash Equivalents of
Holdings and its Subsidiaries held in deposit accounts or securities accounts
subject to Control Agreements.
     “Loan” means any loan made or deemed made by any Lender hereunder.
     “Loan Documents” means, collectively, this Agreement, any Notes, the
Guaranty and Security Agreement, any Mortgages, the Control Agreements, the Fee
Letter, the Subordination Agreement, the L/C Reimbursement Agreements, all
landlord waivers, and, when executed, each document executed by a Loan Party and
delivered to the Administrative Agent, any Lender or any L/C Issuer in
connection with or pursuant to any of the foregoing or the Obligations, together
with any modification of any term, or any waiver with respect to, any of the
foregoing.
     “Loan Party” means each Borrower and each Guarantor.
     “Material Adverse Effect” means (a) a material adverse change in the
financial condition, business, operations or property of the Group Members,
taken as a whole, (b) material impairment of the ability of the Loan Parties
(taken as a whole) to perform in any material respect their obligations under
the Loan Documents and (c) a material adverse effect upon the validity or
enforceability of the Credit Agreement, Guaranty and Security Agreement, Fee
Letter, the Control Agreements or the other Loan Documents taken as a whole or
the rights and remedies of the Administrative Agent, the Lenders and the other
Secured Parties under the Loan Documents.
     “Material Agreement” means the agreements between (i) any Group Member and
Multimodal Technologies, Inc., and (ii) MedQuist Inc. or any of its Subsidiaries
and Nuance Communications, Inc., together with any amendments, modifications and
replacements of any such Material Agreements permitted hereby; provided,
however, that “Material Agreements” shall not include that certain Dictaphone
Corporation Maintenance Plan, dated on or about May 18, 2004, between
HealthScribe, Inc. and Dictaphone Corporation.
     “Maximum Lawful Rate” has the meaning specified in Section 2.9(d).
     “Medicaid” means, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and
any statutes succeeding thereto, and all laws, rules, regulations, manuals,
orders, or requirements pertaining to such program, including (a) all federal
statutes affecting such program; (b) all state statutes and plans for medical
assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative,
reimbursement, and requirements of all government authorities promulgated in
connection with such program (whether or not having the

29

--------------------------------------------------------------------------------

 

force of law), in each case as the same may be amended, supplemented or
otherwise modified from time to time.
     “Medicare” means, collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, or orders pertaining to such program including (a) all
federal statutes (whether set forth in Title XVIII of the Social Security Act or
elsewhere) affecting such program; and (b) all applicable provisions of all
rules, regulations, manuals, orders and administrative, reimbursement and
requirements of all governmental authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
     “MedQuist” has the meaning specified in the preamble.
     “MedQuist Consolidation Date” means the earlier of (a) December 31, 2013 or
(b) the date upon which Holdings owns, directly or indirectly, 100% of the Stock
of MedQuist.
     “MedQuist Transcriptions” has the meaning specified in the preamble.
     “Moody’s” means Moody’s Investors Service, Inc.
     “Mortgage” means any mortgage, deed of trust or other document executed or
required herein to be executed by any Loan Party and granting a security
interest over real property in favor of the Administrative Agent as security for
the Obligations.
     “Mortgage Supporting Documents” means, with respect to any Mortgage for a
parcel of real property, each document (including title policies or marked-up
unconditional insurance binders (in each case, together with copies of all
documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built
surveys (in form and as to date that is sufficiently acceptable to the title
insurer issuing title insurance to the Administrative Agent for such title
insurer to deliver endorsements to such title insurance as reasonably requested
by the Administrative Agent), environmental assessments and reports and evidence
regarding recording and payment of fees, insurance premium and taxes that the
Administrative Agent may reasonably request, to create, register, perfect,
maintain, evidence the existence, substance, form or validity of or enforce a
valid lien on such parcel of real property in favor of the Administrative Agent
for the benefit of the Secured Parties, subject only to Permitted Liens and such
other Liens as the Administrative Agent may approve.
     “Multiemployer Plan” means any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise
has any obligation or liability, contingent or otherwise.
     “National Flood Insurance Program” means the program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as revised by the National Flood Insurance
Reform Act of 1994, that mandates the purchase of flood insurance to cover real
property improvements located in Special Flood Hazard Areas in participating
communities and provides protection to property owners through a Federal
insurance program.

30

--------------------------------------------------------------------------------

 

     “Net Cash Proceeds” means proceeds received in cash, checks or other cash
equivalent financial instruments (including Cash Equivalents) from (a) any Sale
of, or Property Loss Event with respect to, property, net of (i) the customary
out-of-pocket cash costs, fees and expenses paid or required to be paid in
connection therewith, (ii) taxes paid or reasonably estimated to be payable as a
result thereof, (iii) any amount required to be paid or prepaid on Indebtedness
(other than the Obligations and Indebtedness owing to any Group Member) secured
by the property subject thereto and (iv) any applicable amounts required to be
held in escrow until such time as such amounts are released from escrow,
whereupon such amounts shall be considered Net Cash Proceeds or (b) any sale or
issuance of Stock or incurrence of Indebtedness, in each case net of brokers’,
advisors’ and investment banking fees and other customary out-of-pocket
underwriting discounts, commissions and other customary out-of-pocket cash
costs, fees and expenses (including costs and expenses of legal counsel), in
each case incurred in connection with such transaction; provided, however, that
any such proceeds received by any Group Member that is not a Wholly Owned
Subsidiary of Holdings shall constitute “Net Cash Proceeds” only to the extent
of the aggregate direct and indirect beneficial ownership interest of Holdings
therein.
     “Non-Funding Lender” means any Lender that has (a) failed to fund any
payments required to be made by it under the Loan Documents within two
(2) Business Days after any such payment is due (excluding expense and similar
reimbursements that are subject to good faith disputes), (b) given written
notice (and the Administrative Agent has not received a revocation thereof in
writing) to the Borrower Representative, the Administrative Agent, any Lender,
or any L/C Issuer or has otherwise publicly announced (and the Administrative
Agent has not received notice of a public retraction thereof) that such Lender
believes it will fail to fund payments or purchases of participations required
to be funded by it under the Loan Documents or one or more other syndicated
credit facilities or (c) any Lender that has, or any Person that directly or
indirectly controls such Lender has, (i) become subject to a voluntary or
involuntary case under the Bankruptcy Code or any similar bankruptcy laws,
(ii) a custodian, conservator, receiver or similar official appointed for it or
any substantial part of such Person’s assets, or (iii) made a general assignment
for the benefit of creditors, been liquidated, or otherwise been adjudicated as,
or determined by any Governmental Authority having regulatory authority over
such Person or its assets to be, insolvent or bankrupt, and for this clause (c),
the Administrative Agent has determined that such Lender is reasonably likely to
become a Non-Funding Lender under clause (a) or (b) of this definition. For
purposes of this definition, control of a Person shall have the same meaning as
in the second sentence of the definition of “Affiliate”.
     “Non-U.S. Lender Party” means each of the Administrative Agent, each
Lender, each L/C Issuer, each SPV and each participant, in each case that is not
a Domestic Person.
     “Note” means a promissory note issued jointly and severally by the
Borrowers, in substantially the form of Exhibit B-1 or B-2, as applicable,
payable to the order of a Lender in any Facility in a principal amount equal to
the amount of such Lender’s Commitment under such Facility (or, in the case of
the Term Loan Facility, the aggregate initial principal amount of its Term
Loan).
     “Notice of Borrowing” has the meaning specified in Section 2.2(a).
     “Notice of Conversion or Continuation” has the meaning specified in
Section 2.10(b).
     “Obligations” means, with respect to any Loan Party, all Loans, L/C
Obligations, Bank Product Obligations and other amounts, obligations,
liabilities, covenants and duties of every type

31

--------------------------------------------------------------------------------

 

and description owing by such Loan Party arising out of or under any Loan
Document or Secured Hedging Agreement, (regardless of whether acquired by
assignment), absolute or contingent, due or to become due, whether liquidated or
not, now existing or hereafter arising and however incurred, and whether or not
evidenced by any instrument or for the payment of money, including, without
duplication, (a) if such Loan Party is a Borrower, all Loans and L/C
Obligations, (b) all interest, whether or not accruing after the filing of any
petition in bankruptcy or after the commencement of any insolvency,
reorganization or similar proceeding, and whether or not a claim for post-filing
or post-petition interest is allowed in any such proceeding, and (c) all other
fees, expenses (including fees, charges and disbursement of counsel), interest,
commissions, charges, costs, disbursements, indemnities and reimbursement of
amounts paid and other sums to the extent chargeable to such Loan Party under
any Loan Document (including those payable to L/C Issuers as described in
Section 2.11) or Secured Hedging Agreement.
     “Ordinary Course of Business” means, in respect of any transaction
involving any Group Member, the ordinary course of such Person’s business, as
undertaken by such Person in good faith.
     “Other Taxes” has the meaning specified in Section 2.17(c).
     “Participant Register” has the meaning specified in Section 11.2(f).
     “Patents” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to letters
patent and applications therefor.
     “Patriot Act” has the meaning specified in Section 11.21.
     “PBGC” means the United States Pension Benefit Guaranty Corporation and any
successor thereto.
     “Permit” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
     “Permitted Acquisition” means any Proposed Acquisition satisfying each of
the following conditions: (a) the aggregate amounts payable in connection with,
and other consideration for (in each case, including all transaction costs and
all Indebtedness, liabilities and Guaranty Obligations incurred or assumed in
connection therewith or otherwise reflected in a Consolidated balance sheet of
Holdings and the Proposed Acquisition Target), such Proposed Acquisition and all
other Permitted Acquisitions consummated on or prior to the date of the
consummation of such Proposed Acquisition shall not exceed (i) $25,000,000 in
the aggregate in any Fiscal Year or $75,000,000 in the aggregate during the term
of this Agreement plus (ii) Additional Available Cash as of the date of
consummation of such Proposed Acquisition plus (iii) $50,000,000 in the
aggregate during the term of this Agreement in the form of shares of common
stock of Holdings issued in connection with such Proposed Acquisition, (b) the
Administrative Agent shall have received reasonable advance notice of such
Proposed Acquisition including a reasonably detailed description thereof at
least 15 days prior to the consummation of such Proposed Acquisition (or such
later date as may be agreed by the Administrative Agent) and on or prior to the
date of such Proposed Acquisition, the Administrative Agent shall have received
copies of the acquisition

32

--------------------------------------------------------------------------------

 

agreement and related Contractual Obligations and other documents (including
financial information and analysis, environmental assessments and reports,
opinions, certificates and lien searches) and information reasonably requested
by the Administrative Agent, (c) as of the date of consummation of such Proposed
Acquisition and after giving effect to all transactions to occur on such date as
part of such Proposed Acquisition, (1) all conditions set forth in clauses (i)
and (ii) of Section 3.2(b) shall be satisfied or duly waived, (2) Holdings
shall, on a Pro Forma Basis as of the last day of the last Fiscal Quarter for
which Financial Statements have been delivered hereunder, have a Consolidated
Total Leverage Ratio and Consolidated Senior Leverage Ratio which are at least
0.25:1.00 less than the required thresholds set forth in Sections 5.1 and 5.2 as
of such date, as applicable, and (3) Holdings shall have Liquidity of at least
$20,000,000 and (d) such Proposed Acquisition is consummated no earlier than
December 31, 2010.
     “Permitted Indebtedness” means any Indebtedness of any Group Member that is
permitted in Section 8.1.
     “Permitted Investment” means any Investment of any Group Member that is
permitted in Section 8.3.
     “Permitted Investors” means, collectively, Sponsor, and any limited
partners, operating partners or Affiliates of any of the foregoing.
     “Permitted Lien” means any Lien on or with respect to the property of any
Group Member that is permitted in Section 8.2.
     “Permitted Refinancing” means Indebtedness constituting a refinancing or
extension of Permitted Indebtedness that (a) has an aggregate outstanding
principal amount not greater than the aggregate principal amount of such
Permitted Indebtedness outstanding at the time of such refinancing or extension,
(b) has a weighted average maturity (measured as of the date of such refinancing
or extension) and maturity no shorter than that of such Permitted Indebtedness,
(c) is not entered into as part of a Sale and Leaseback transaction, (d) is not
secured by any property or any Lien other than those securing such Permitted
Indebtedness and (e) is otherwise on terms (other than market based interest
rates, discounts and fees at the time of refinancing) no less favorable to the
Group Members, taken as a whole, than those of such Permitted Indebtedness;
provided, however, that, notwithstanding the foregoing, (x) the terms of such
Permitted Indebtedness may be modified as part of such Permitted Refinancing if
such modification would have been permitted pursuant to Section 8.11 and (y) no
Guaranty Obligation for such Indebtedness shall constitute part of such
Permitted Refinancing unless similar Guaranty Obligations with respect to such
Permitted Indebtedness existed and constituted Permitted Indebtedness prior to
such refinancing or extension.
     “Permitted Reinvestment” means, with respect to the Net Cash Proceeds of
any Sale or Property Loss Event, to acquire (or make Capital Expenditures to
finance the acquisition, repair, improvement or construction of), to the extent
otherwise permitted hereunder, property useful in the business of the Group
Members, as determined in good faith by the Borrowers (including through a
Permitted Acquisition) or, if such Property Loss Event involves loss or damage
to property, to repair such loss or damage.
     “Person” means any individual, partnership, corporation (including a
business trust and a public benefit corporation), joint stock company, estate,
association, firm, enterprise, trust,

33

--------------------------------------------------------------------------------

 

limited liability company, unincorporated association, joint venture and any
other entity or Governmental Authority.
     “Pro Forma Balance Sheet” has the meaning specified in Section 4.4(d).
     “Pro Forma Basis” means, with respect to any determination for any period
and any Pro Forma Transaction, that such determination shall be made by giving
pro forma effect to each such Pro Forma Transaction, as if each such Pro Forma
Transaction had been consummated on the first day of such period, based on
historical results accounted for in accordance with GAAP and, to the extent
applicable, reasonable assumptions that are specified in reasonable detail in
the relevant Compliance Certificate, Financial Statement or other document
provided to the Administrative Agent or any Lender in connection herewith in
accordance with Regulation S-X of the Securities Act of 1933; provided that
non-Regulation S-X adjustments approved by the Administrative Agent in writing
may also be made to reflect operating expense reductions and other operating
improvements or synergies or cost savings reasonably expected to result from
such Pro Forma Transaction, which adjustments are reasonably anticipated by the
Borrowers to be realizable in connection with such Pro Forma Transaction and are
estimated on a good faith basis by the Borrowers.
     “Pro Forma Transaction” means any transaction consummated as part of any
Permitted Acquisition or any Sale of Property permitted under Sections 8.4(k) or
(l), together with each other transaction relating thereto and consummated in
connection therewith, including any incurrence or repayment of Indebtedness.
     “Projections” means, collectively, the Initial Projections and the
projections delivered pursuant to Section 6.1(f).
     “Property” means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
     “Property Loss Event” means, with respect to any property, any loss of or
damage to such property or any taking of such property or condemnation thereof.
     “Proposed Acquisition” means (a) any proposed acquisition of all or
substantially all of the assets or Stock of any Proposed Acquisition Target by
any Borrower or any Subsidiary of a Borrower or by Holdings that is consensual
and approved by the board of directors of such Proposed Acquisition Target or
the Person that owns such Proposed Acquisition Target, or (b) any proposed
merger of any Proposed Acquisition Target with or into any Borrower or Holdings
or any Subsidiary of a Borrower or Holdings (and, in the case of a merger with a
Borrower or Holdings, with such Borrower or Holdings being the surviving
corporation).
     “Proposed Acquisition Target” means any Person or any brand, line of
business, division, branch, operating division or other unit operation of any
Person.
     “Pro Rata Outstandings”, of any Lender at any time, means (a) in the case
of the Term Loan Facility, the outstanding principal amount of the Term Loans
owing to such Lender and (b) in the case of the Revolving Credit Facility, the
sum of (i) the outstanding principal amount of Revolving Loans owing to such
Lender and (ii) the amount of the participation of such Lender in the L/C
Obligations outstanding with respect to all Letters of Credit.

34

--------------------------------------------------------------------------------

 

     “Pro Rata Share” means, with respect to any Lender at any time, the
percentage obtained by dividing (a) the Revolving Commitment (or, if Revolving
Commitments are terminated, the Pro Rata Outstandings of such Lender under the
Revolving Credit Facility) or the Pro Rata Outstandings under the Term Loan
Facility of such Lender, as applicable, then in effect by (b) the sum of the
Revolving Commitments (or, if such Revolving Commitments are terminated, the Pro
Rata Outstandings of all Lenders under the Revolving Credit Facility) or Term
Loans of all Lenders then in effect, as applicable; provided, however, that, if
there are no Commitments and no Pro Rata Outstandings in any of such Facilities,
such Lender’s Pro Rata Share in any Facility, as applicable, shall be determined
based on the Commitments and/or Pro Rata Outstandings most recently in effect,
after giving effect to any subsequent assignment and any subsequent non-pro rata
payments of any Lender pursuant to Section 2.18.
     “RCM Sale” means a Sale of the revenue cycle management services
Subsidiary, which was disclosed to the Administrative Agent on or before the
Signing Date.
     “Recapitalization Dividend” means a dividend or distribution paid by
MedQuist to the holders of its outstanding shares of Stock in the aggregate
amount of up to $177,000,000, allocated ratably to such shareholders.
     “Register” has the meaning specified in Section 2.14(b).
     “Reinvestment Prepayment Amount” means, with respect to any Net Cash
Proceeds on the Reinvestment Prepayment Date therefor, the amount of such Net
Cash Proceeds less any amount paid by any Group Member to make Permitted
Reinvestments with such Net Cash Proceeds pursuant to a Contractual Obligation
entered into with any Person that is not an Affiliate of any Borrower.
     “Reinvestment Prepayment Date” means, with respect to any portion of any
Net Cash Proceeds of any Sale or Property Loss Event, the earliest of (a) the
365th day after the completion of the portion of such Sale or Property Loss
Event corresponding to such Net Cash Proceeds, (b) the date that is five
(5) Business Days after the date on which the Borrower Representative shall have
notified the Administrative Agent of the Borrowers’ determination not to make
Permitted Reinvestments with such Net Cash Proceeds, (c) the occurrence of any
Event of Default set forth in Section 9.1(e)(ii), (d) any acceleration of the
Obligations under Section 9.2 and (e) five (5) Business Days after the delivery
of a notice by the Administrative Agent or the Required Lenders to the Borrower
Representative during the continuance of any Event of Default set forth in
Section 9.1(a) or (e).
     “Related Documents” means, collectively, the Subordinated Note Documents
and each other document executed with respect thereto or with respect to any
Related Transaction.
     “Related Person” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article 3) of or to such
Person or any of its Affiliates, together with, if such Person is the
Administrative Agent, each other Person or individual designated, nominated or
otherwise mandated by or helping the Administrative Agent pursuant to and in
accordance with Section 10.4 or any comparable provision of any Loan Document.

35

--------------------------------------------------------------------------------

 

     “Related Transactions” means, collectively, the funding of the initial
Loans and Letters of Credit, the application of the proceeds thereof in
accordance with Section 7.9, the payment of the Recapitalization Dividend, the
issuance of the Subordinated Notes, the refinancing of the Existing Credit
Agreement, Existing Subordinated Note and Existing CBay Debt, the execution and
delivery of all Related Documents and the payment of all related fees, costs and
expenses.
     “Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.
     “Remedial Action” means all actions required to (a) clean up, remove, treat
or in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.
     “Required Lenders” means, at any time, Lenders having at such time in
excess of 50% of the sum of the aggregate Revolving Credit Commitments (or, if
such Revolving Credit Commitments are terminated, the sum of the amounts of the
participations in Swing Loans, the principal amount of unparticipated portions
of the Swing Loans and the Pro Rata Outstandings in the Revolving Credit
Facility) and Term Loan Commitments (or, if such Commitments are terminated, the
outstanding principal amount of the Term Loans) then in effect, ignoring, in
such calculation, the amounts held by any Non-Funding Lender or Sponsor
Affiliated Lender.
     “Required Revolving Lenders” means, at any time, Lenders having at such
time in excess of 50% of the aggregate Revolving Credit Commitments (or, if such
Revolving Credit Commitments are terminated, the sum of the amounts of the
participations in Swing Loans, the principal amount of the unparticipated
portions of the Swing Loans and the Pro Rata Outstandings in the Revolving
Credit Facility) then in effect, ignoring, in such calculation, the amounts held
by any Non-Funding Lender or Sponsor Affiliated Lender.
     “Required Term Lenders” means, at any time, Lenders having at such time in
excess of 50% of the aggregate Term Loan Commitments (or, if such Commitments
are terminated, the outstanding principal amount of the Term Loans) then in
effect, ignoring, in such calculation, the Commitments and Pro Rata Outstandings
of any Non-Funding Lender or Sponsor Affiliated Lender.
     “Requirements of Law” means, with respect to any Person, collectively, the
laws (statutory or common), treaties, rules and regulations, ordinances, orders,
other legal requirements of any Governmental Authority, in each case that are
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject, including without limitation all
Healthcare Laws.
     “Responsible Officer” means, with respect to any Person, any of the
president, chief executive officer, treasurer, assistant treasurer, controller,
managing member or general partner of such Person but, in any event, with
respect to financial matters, any such officer that is responsible for preparing
the Financial Statements delivered hereunder and, with respect to the Corporate
Chart and other documents delivered pursuant to Section 6.1(e), documents
delivered on the Signing Date or Closing Date and documents delivered pursuant
to Section 7.10, the

36

--------------------------------------------------------------------------------

 

secretary or assistant secretary of such Person or any other officer responsible
for maintaining the corporate and similar records of such Person.
     “Restricted Payment” means (a) any dividend or other distribution, whether
in cash, Securities or other property, on account of any Stock or Stock
Equivalent of any Group Member, in each case now or hereafter outstanding, and
(b) any redemption, retirement, termination, defeasance, cancellation, purchase
or other acquisition for value of any Stock or Stock Equivalent of any Group
Member, now or hereafter outstanding, and any payment or other transfer setting
aside funds for any such redemption, retirement, termination, cancellation,
purchase or other acquisition, whether to a sinking fund, a similar fund or
otherwise.
     “Revolving Credit Commitment” means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and acquire interests in other
Revolving Credit Outstandings, which commitment is in the amount set forth
opposite such Lender’s name on Schedule I under the caption “Revolving Credit
Commitment”, as amended to reflect Assignments and as such amount may be reduced
pursuant to this Agreement. The aggregate amount of the Revolving Credit
Commitments on the Signing Date equals $25,000,000.
     “Revolving Credit Facility” means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.
     “Revolving Credit Lender” means each Lender that has a Revolving Credit
Commitment, holds a Revolving Loan or participates in any Swing Loan or Letter
of Credit.
     “Revolving Credit Outstandings” means, at any time, the sum of, in each
case to the extent outstanding at such time, (a) the aggregate principal amount
of the Revolving Loans and Swing Loans and (b) the L/C Obligations for all
Letters of Credit.
     “Revolving Credit Termination Date” means the earliest of (a) the Scheduled
Revolving Credit Termination Date, (b) the date of termination of the Revolving
Credit Commitments pursuant to Section 2.5 or Section 9.2 and (c) the date on
which the Obligations become due and payable pursuant to Section 9.2.
     “Revolving Loan” has the meaning specified in Section 2.1(a).
     “S&P” means Standard & Poor’s Rating Services.
     “Sale and Leaseback Transaction” means, with respect to any Person (the
“obligor”), any Contractual Obligation or other arrangement with any other
Person (the “counterparty”) consisting of a lease by such obligor of any
property that, directly or indirectly, has been or is to be Sold by the obligor
to such counterparty or to any other Person to whom funds have been advanced by
such counterparty based on a Lien on, or an assignment of, such property or any
obligations of such obligor under such lease.
     “Scheduled Revolving Credit Termination Date” means October 1, 2015.
     “Secured Hedging Agreement” means any Hedging Agreement that (a) has been
entered into with a Secured Hedging Counterparty, (b) in the case of a Hedging
Agreement not entered into with or provided or arranged by the Administrative
Agent or an Affiliate of the Administrative Agent, is expressly identified as
being a “Secured Hedging Agreement” hereunder

37

--------------------------------------------------------------------------------

 

in a joint notice from such Loan Party and such Person delivered to the
Administrative Agent reasonably promptly after the execution of such Hedging
Agreement and (c) meets the requirements of Section 8.1(f).
     “Secured Hedging Counterparty” means (a) a Person who has entered into a
Hedging Agreement with a Loan Party if such Hedging Agreement was provided or
arranged by the Administrative Agent or an Affiliate of the Administrative
Agent, and any assignee of such Person or (b) a Lender or an Affiliate of a
Lender who has entered into a Hedging Agreement with a Loan Party (or a Person
who was a Lender or an Affiliate of a Lender at the time of execution and
delivery of the Hedging Agreement).
     “Secured Parties” means the Lenders, the L/C Issuers, the Administrative
Agent, any Secured Hedging Counterparty and any other Person to which any
Obligations are owed.
     “Security” means all Stock, Stock Equivalents, voting trust certificates,
bonds, debentures, instruments and other evidence of Indebtedness, whether or
not secured, convertible or subordinated, all certificates of interest, share or
participations in, all certificates for the acquisition of, and all warrants,
options and other rights to acquire, any Security.
     “Sell” means, with respect to any property, to sell, convey, transfer,
assign, license, lease or otherwise dispose of, any interest therein or to
permit any Person to acquire any such interest, including, in each case, through
a Sale and Leaseback Transaction or through a sale, factoring at maturity,
collection of or other disposal, with or without recourse, of any notes or
accounts receivable. Conjugated forms thereof and the noun “Sale” have
correlative meanings.
     “Signing Date” means the first date on which the conditions precedent set
forth in Section 3.3 have been satisfied.
     “Solvent” means, with respect to any Person as of any date of
determination, that, as of such date, after giving effect to the rights of
contribution against other Loan Parties set forth in Section 12.7 and in the
Guaranty and Security Agreement, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including contingent and unliquidated liabilities) of
such Person, (b) such Person is able to pay all liabilities of such Person as
such liabilities mature and (c) such Person does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities shall be computed at the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
     “Special Flood Hazard Area” means an area that FEMA’s current flood maps
indicate has at least a one percent (1%) chance of a flood equal to or exceeding
the base flood elevation (a 100-year flood) in any given year.
     “Sponsor” means S.A.C. Private Capital Group, LLC, a Delaware limited
liability company.
     “Sponsor Affiliated Lender” means any Lender that is either the Sponsor or
an Affiliate of the Sponsor (excluding its portfolio companies).

38

--------------------------------------------------------------------------------

 

     “Sponsor Consulting Agreement” means that certain Agreement, dated as of
August 19, 2008, by and among Holdings, S.A.C. PEI CB Investment II, LLC and
Lehman Brothers Commercial Corporation Asia.
     “SPV” means any special purpose funding vehicle identified as such in a
writing by any Lender to the Administrative Agent.
     “Stock” means all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial, partnership or
membership interests, joint venture interests or other ownership or profit
interests in or equivalents (regardless of how designated) of or in a Person
(other than an individual), whether voting or non-voting.
     “Stock Equivalents” means all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.
     “Subordinated Debt” means any Indebtedness that is subordinated to the
payment in full of the Obligations on terms and conditions reasonably
satisfactory to the Administrative Agent, including any Indebtedness under the
Subordinated Notes.
     “Subordinated Notes” means the 13% Senior Subordinated Notes due October
15, 2016, issued by the Borrowers on the Closing Date in Dollars in the
aggregate amount of up to $85,000,000 and governed by the terms of the
Subordinated Notes Documents.
     “Subordinated Notes Documents” means, collectively, the Subordinated Notes,
the Senior Subordinated Note Purchase Agreement and any other document related
to any of the foregoing.
     “Senior Subordinated Note Purchase Agreement” means the Senior Subordinated
Note Purchase Agreement, dated as of September 30, 2010, between the Borrowers,
Blackrock Kelso Capital Corporation, a Delaware corporation, PennantPark
Investment Corporation, a Maryland corporation, Citibank, N.A., a national
association and THL Credit, Inc., a Delaware corporation.
     “Subordination Agreement” means that certain Subordination and
Intercreditor Agreement, dated as of the Signing Date, by and among the initial
holders of the Subordinated Notes and the Administrative Agent on behalf of the
Lenders, and acknowledged by Holdings and the Borrowers, as such agreement shall
be amended, modified, amended and restated or otherwise changed from time to
time in accordance with the terms hereof and thereof.
     “Subsidiary” means, with respect to any Person, any corporation,
partnership, joint venture, limited liability company, association or other
entity, the management of which is, directly or indirectly, controlled by, or of
which an aggregate of more than 50% of the outstanding Voting Stock is, at the
time, owned or controlled directly or indirectly by, such Person or one or more
Subsidiaries of such Person. Unless the context otherwise clearly requires,
references herein to a “Subsidiary” refer to a Subsidiary of Holdings.
     “Subsidiary Guarantor” means each Subsidiary of Holdings that (a) enters
into any Guaranty Obligations with respect to the Obligations pursuant to the
Guaranty and Security

39

--------------------------------------------------------------------------------

 

Agreement or any other Agreement acceptable to the Administrative Agent or
(b) is required to execute the Guaranty and Security Agreement on the Closing
Date pursuant to Section 3.1(a).
     “Substitute Lender” has the meaning specified in Section 2.18(a).
     “SWDA” means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.).
     “Swingline Commitment” means $5,000,000.
     “Swingline Lender” means, each in its capacity as Swingline Lender
hereunder, GE Capital or, upon the resignation of GE Capital as administrative
agent hereunder, any Lender (or Affiliate or Approved Fund of any Lender) that
agrees, with the approval of the successor Administrative Agent (or, if there is
no such successor Administrative Agent, the Required Revolving Lenders) and the
Borrowers, to act as the Swingline Lender hereunder.
     “Swingline Request” has the meaning specified in Section 2.3(b).
     “Swing Loan” has the meaning specified in Section 2.3(a).
     “Tax Return” has the meaning specified in Section 4.8.
     “Taxes” has the meaning specified in Section 2.17(a).
     “Term Loan” has the meaning specified in Section 2.1(b).
     “Term Loan Commitment” means, with respect to each Term Loan Lender, the
commitment of such Lender to make Term Loans to the Borrowers, which commitment
is in the amount set forth opposite such Lender’s name on Schedule I under the
caption “Term Loan Commitment”, as amended to reflect Assignments and as such
amount may be reduced pursuant to this Agreement. The aggregate amount of the
Term Loan Commitments on the Signing Date equals $200,000,000.
     “Term Loan Facility” means the Term Loan Commitments and the provisions
herein related to the Term Loans.
     “Term Loan Lender” means each Lender that has a Term Loan Commitment or
that holds a Term Loan.
     “Term Loan Maturity Date” means October 1, 2015.
     “Title IV Plan” means a pension plan subject to Title IV of ERISA, other
than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has
any obligation or liability, contingent or otherwise.
     “Trademarks” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers and, in each case, all goodwill associated therewith,
all registrations and recordations thereof and all applications in connection
therewith.
 

40

--------------------------------------------------------------------------------

 

     “Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to trade
secrets.
     “TRICARE” means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, and all laws applicable
to such programs.
     “UCC” means the Uniform Commercial Code of any applicable jurisdiction and,
if the applicable jurisdiction shall not have any Uniform Commercial Code, the
Uniform Commercial Code as in effect in the State of New York.
     “Unfunded Pension Liability” of any Title IV Plan shall mean the amount, if
any, by which, as of the date of the most recent financial statements reflecting
such amounts, the value of the accumulated plan benefits under the Title IV Plan
(based on assumptions used for purposes of Accounting Standards Codification
No. 715: Compensation-Retirement Benefits), exceeds the fair market value of all
plan assets allocable to such liabilities (excluding any accrued but unpaid
contributions).
     “United States” means the United States of America.
     “Unused Commitment Fee” has the meaning specified in Section 2.11(a).
     “U.S. Lender Party” means each of the Administrative Agent, each Lender,
each L/C Issuer, each SPV and each participant, in each case that is a Domestic
Person.
     “Voting Stock” means Stock of any Person having ordinary power to vote in
the election of members of the board of directors, managers or equivalent
governing body of such Person (irrespective of whether, at the time, Stock of
any other class or classes of such entity shall have or might have voting power
by reason of the occurrence of any contingency).
     “Wholly Owned Subsidiary” of any Person means any Subsidiary of such
Person, all of the Stock of which (other than nominal holdings and director’s
qualifying shares) is owned by such Person, either directly or through one or
more Wholly Owned Subsidiaries of such Person.
     “Withdrawal Liability” means, at any time, any liability incurred (whether
or not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.
     “Working Capital” means, for any Person at any date, its Consolidated
Current Assets at such date minus its Consolidated Current Liabilities at such
date.
          Section 1.2 UCC Terms. The following terms have the meanings given to
them in the applicable UCC: “account”, “commodity account”, “commodity
contract”, “commodity intermediary”, “deposit account”, “entitlement holder”,
“entitlement order”, “equipment”, “financial asset”, “general intangible”,
“goods”, “instruments”, “inventory”, “securities account”, “securities
intermediary” and “security entitlement”.
          Section 1.3 Accounting Terms and Principles. (a) GAAP. All accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided
 

41

--------------------------------------------------------------------------------

 

herein, be made in accordance with GAAP. No material change in the accounting
principles used in the preparation of any Financial Statement hereafter adopted
by Holdings shall be given effect if such change would affect a calculation that
measures compliance with any provision of Article 5 or Article 8 unless the
Borrowers, the Administrative Agent and the Required Lenders agree to modify
such provisions to reflect such material changes in GAAP and, unless such
provisions are modified, all Financial Statements, Compliance Certificates and
similar documents provided hereunder shall be provided together with a
reconciliation between the calculations and amounts set forth therein before and
after giving effect to such material change in GAAP. Notwithstanding any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to in Article 5 and Article 8 shall be made, without giving effect to any
election under Accounting Standards Codification 825-10 (or any other Financial
Accounting Standard having a similar result or effect) to value any Indebtedness
or other liabilities of any Loan Party or any Subsidiary of any Loan Party at
“fair value.”
          Section 1.4 Pro Forma. All components of financial calculations made
to determine compliance with Section 3.3(d), Article 5 and Article 8 shall be
adjusted on a Pro Forma Basis to include or exclude, as the case may be, without
duplication, such components of such calculations attributable to any Pro Forma
Transaction consummated after the first day of the applicable period of
determination and prior to the end of such period, as determined in good faith
by the Borrowers based on assumptions expressed therein and that were believed
in good faith by the Borrowers to be reasonable based on the information
available to the Borrowers at the time of preparation of the Compliance
Certificate setting forth such calculations.
          Section 1.5 Payments. The Administrative Agent may set up standards
and procedures to determine or redetermine the equivalent in Dollars of any
amount expressed in any currency other than Dollars and otherwise may, but shall
not be obligated to, rely on any determination made by any Loan Party or any L/C
Issuer. Any such determination or redetermination by the Administrative Agent
shall be conclusive and binding for all purposes, absent manifest error. No
determination or redetermination by any Secured Party or Loan Party and no other
currency conversion shall change or release any obligation of any Loan Party or
of any Secured Party (other than the Administrative Agent and its Related
Persons) under any Loan Document, each of which agrees to pay separately for any
shortfall remaining after any conversion and payment of the amount as converted.
The Administrative Agent may round up or down, and may set up appropriate
mechanisms to round up or down, any amount hereunder to nearest higher or lower
amounts and may determine reasonable de minimis payment thresholds.
          Section 1.6 Interpretation. (a) Certain Terms. Except as set forth in
any Loan Document, all accounting terms not specifically defined herein shall be
construed in accordance with GAAP (except for the term “property”, which shall
be interpreted as broadly as possible, including, in any case, cash, Securities,
other assets, rights under Contractual Obligations and Permits and any right or
interest in any property). The terms “herein”, “hereof” and similar terms refer
to this Agreement as a whole. In the computation of periods of time from a
specified date to a later specified date in any Loan Document, the terms “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding” and the word “through” means “to and including.” In any other case,
the term “including” when used in any Loan Document means “including without
limitation.” The term “documents” means all writings, however evidenced and
whether in physical or electronic form, including all documents,
 

42

--------------------------------------------------------------------------------

 

instruments, agreements, notices, demands, certificates, forms, financial
statements, opinions and reports.
          (b) Certain References. Unless otherwise expressly indicated,
references (i) in this Agreement to an Exhibit, Schedule, Article, Section or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section or
clause in, this Agreement and (ii) in any Loan Document, to (A) any agreement
shall include, without limitation, all exhibits, schedules, appendixes and
annexes to such agreement and any modification to any term of such agreement but
only to the extent such modifications are not prohibited by the terms of any
Loan Document, (B) any statute shall be to such statute as modified from time to
time and to any successor legislation thereto, in each case as in effect at the
time any such reference is operative and (C) any time of day shall be a
reference to New York time. Titles of articles, sections, clauses, exhibits,
schedules and annexes contained in any Loan Document are without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto. Unless otherwise expressly indicated, the meaning of
any term defined (including by reference) in any Loan Document shall be equally
applicable to both the singular and plural forms of such term.
ARTICLE 2
THE FACILITIES
          Section 2.1 The Commitments. (a) Revolving Credit Commitments. On the
terms and subject to the conditions contained in this Agreement, each Revolving
Credit Lender severally, but not jointly, agrees to make loans in Dollars (each
a “Revolving Loan”) to the Borrowers from time to time on any Business Day
during the period commencing one Business Day after the Closing Date until the
Revolving Credit Termination Date in an aggregate principal amount at any time
outstanding for all such loans by such Lender not to exceed such Lender’s
Revolving Credit Commitment (less such Lender’s participation in outstanding
Swing Loans and L/C Obligations); provided, however, that at no time shall any
Revolving Credit Lender be obligated to make a Revolving Loan in excess of such
Lender’s Pro Rata Share of the amount by which the then effective Revolving
Credit Commitments exceeds the aggregate Revolving Credit Outstandings at such
time. Within the limits set forth in the first sentence of this clause (a),
amounts of Revolving Loans repaid may be reborrowed under this Section 2.1.
          (b) Term Loan Commitments. On the terms and subject to the conditions
contained in this Agreement, each Term Loan Lender severally, but not jointly,
agrees to make a loan (each a “Term Loan”) in Dollars to the Borrowers on the
Closing Date in an amount not to exceed such Lender’s Term Loan Commitment.
Amounts of Term Loans prepaid or repaid may not be reborrowed. Term Loans may be
Base Rate Loans or Eurodollar Loans, as further provided herein.
          Section 2.2 Borrowing Procedures. (a) Notice From the Borrower
Representative. Each Borrowing of new Loans shall be made on notice given by the
Borrower Representative to the Administrative Agent not later than (i) 1:00 p.m.
on the first Business Day, in the case of a Borrowing of Base Rate Loans and
(ii) 1:00 p.m. on the third Business Day, in the case of a Borrowing of
Eurodollar Rate Loans, prior to the date of the proposed Borrowing. Each such
notice may be made in a writing substantially in the form of Exhibit C (a
“Notice of Borrowing”) duly completed or by telephone if confirmed promptly, but
in any event within one (1) Business Day and prior to such Borrowing, with a
Notice of Borrowing. Loans shall be made
 

43

--------------------------------------------------------------------------------

 

as Base Rate Loans unless, outside of a suspension period pursuant to
Section 2.15, the Notice of Borrowing specifies that all or a portion thereof
shall be Eurodollar Rate Loans. Each Borrowing shall be in an aggregate amount
that is an integral multiple of $500,000 or must equal the Excess Availability
then in effect.
          (b) Notice to Each Lender. The Administrative Agent shall give to each
Lender prompt notice of the Administrative Agent’s receipt of a Notice of
Borrowing and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, prompt notice of the applicable interest rate. Each Lender shall,
before 1:00 p.m. on the date of the proposed Borrowing, make available to the
Administrative Agent at its address referred to in Section 11.11, such Lender’s
Pro Rata Share of such proposed Borrowing. Upon fulfillment or due waiver (i) on
the Closing Date, of the applicable conditions set forth in Section 3.1 and
(ii) on the Closing Date and any time thereafter, of the applicable conditions
set forth in Section 3.2, the Administrative Agent shall promptly make such
funds available to the Borrowers.
          (c) Non-Funding Lenders; Procedures.
          (i) Responsibility. The failure of any Non-Funding Lender to make any
Loan, to fund any purchase of any participation to be made or funded by it, or
to make any payment required by it hereunder on the date specified therefor
shall not relieve any other Lender of its obligations to make such Loan, fund
the purchase of any such participation, or make any other payment required
hereunder on such date, and neither the Administrative Agent nor, other than as
expressly set forth herein, any other Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan, fund the purchase of a
participation or make any other payment required hereunder.
          (ii) Voting Rights. Notwithstanding anything set forth herein to the
contrary, including Section 11.1, a Non-Funding Lender shall not have any voting
or consent rights under or with respect to any Loan Document or constitute a
“Lender”, “Term Loan Lender” or a “Revolving Credit Lender” (or be, or have its
Loans and Commitments, included in the determination of “Required Lenders”,
“Required Term Lenders”, “Required Revolving Lenders” or “Lenders directly
affected” pursuant to Section 11.1) for any voting or consent rights under or
with respect to any Loan Document, provided that (A) the Commitment of a
Non-Funding Lender may not be increased or extended, (B) the principal of a
Non-Funding Lender’s Loans may not be reduced or forgiven, and (C) the interest
rate applicable to Obligations owing to a Non-Funding Lender may not be reduced
in such a manner that by its terms affects such Non-Funding Lender more
adversely than other Lenders in such Facility, in each case without the consent
of such Non-Funding Lender. Moreover, for the purposes of determining Required
Lenders, Required Term Lenders and Required Revolving Lenders the Loans, L/C
Obligations, and Commitments held by Non-Funding Lenders shall be excluded from
the total Loans and Commitments outstanding.
          (iii) Borrower Payments to a Non-Funding Lender. The Administrative
Agent shall be entitled to hold, in a non-interest bearing account, all portions
of any payments received by the Administrative Agent for the benefit of any
Non-Funding Lender (other than any Lender that has a combined capital and
surplus and undivided profits of at least $500,000,000 and is a Non-Funding
Lender solely as a result of the operation of clause (c) of the definition
thereof with respect to a Person that directly or indirectly controls such
Lender) pursuant to this Agreement as cash collateral.
 

44

--------------------------------------------------------------------------------

 

The Administrative Agent is hereby authorized to use such cash collateral to pay
in full the Aggregate Excess Funding Amount to the appropriate Secured Parties
thereof, and then, to hold as cash collateral the amount of such Non-Funding
Lender’s Pro Rata Share, without giving effect to any reallocation pursuant to
Section 2.4(f)(ii), of all funding obligations until the Obligations are paid in
full in cash, all L/C Obligations have been discharged or cash collateralized
and all Commitments have been terminated. Upon any such unfunded obligations
owing by a Non-Funding Lender becoming due and payable, the Administrative Agent
shall be authorized to use such cash collateral to make such payment on behalf
of such Non-Funding Lender. With respect to such Non-Funding Lender’s failure to
fund Revolving Loans or purchase participations in Letters of Credit or L/C
Obligations, any amounts applied by the Administrative Agent to satisfy such
funding shortfalls shall be deemed to constitute a Revolving Loan or amount of
the participation required to be funded and, if necessary to effectuate the
foregoing, the other Revolving Credit Lenders shall be deemed to have sold, and
such Non-Funding Lender shall be deemed to have purchased, Revolving Loans or
Letter of Credit participation interests from the other Revolving Credit Lenders
until such time as the aggregate amount of the Revolving Loans and
participations in Letters of Credit and L/C Obligations are held by the
Revolving Credit Lenders in accordance with their Pro Rata Shares of the
Revolving Loans. Any amounts owing by a Non-Funding Lender to the Administrative
Agent which are not paid when due shall accrue interest at the interest rate
applicable during such period to Revolving Loans that are Base Rate Loans. In
the event that the Administrative Agent is holding cash collateral of a
Non-Funding Lender that cures pursuant to clause (iv) below or ceases to be a
Non-Funding Lender pursuant to the definition of Non-Funding Lender, the
Administrative Agent shall return the unused portion of such cash collateral to
such Lender.
          (iv) Cure. A Lender may cure its status as a Non-Funding Lender under
clause (a) of the definition of Non-Funding Lender if such Lender (A) fully pays
to the Administrative Agent, on behalf of the applicable Secured Parties, the
Aggregate Excess Funding Amount, plus all interest due thereon and, (B) timely
funds the next Revolving Loan required to be funded by such Lender or makes the
next reimbursement required to be made by such Lender. Any such cure shall not
relieve any Lender from liability for breaching its contractual obligations
hereunder.
          (v) Fees. A Lender that is a Non-Funding Lender pursuant to clause (a)
of the definition of Non-Funding Lender shall not earn and shall not be entitled
to receive, and Borrowers shall not be required to pay, such Lender’s portion of
the Unused Commitment Fee during the time such Lender is a Non-Funding Lender
pursuant to clause (a) thereof. In the event that any reallocation of L/C
Obligations occurs pursuant to Section 2.4(f)(ii), during the period of time
that such reallocation remains in effect, the Letter of Credit fees set forth in
Section 2.11(b) payable with respect to such reallocated portion shall be
payable to (A) all Revolving Credit Lenders based on their Pro Rata Share of
such reallocation or (B) to the L/C Issuer for any remaining portion not
reallocated to any other Revolving Credit Lenders.
          Section 2.3 Swing Loans. (a) Availability. On the terms and subject to
the conditions contained in this Agreement, the Swingline Lender agrees to make
loans in Dollars (each a “Swing Loan”) available to the Borrowers under the
Revolving Credit Facility from time to time on any Business Day during the
period commencing one Business Day after the Closing
 

45

--------------------------------------------------------------------------------

 

Date until the Revolving Credit Termination Date in an aggregate principal
amount at any time outstanding not to exceed its Swingline Commitment; provided,
however, that the Swingline Lender may not make any Swing Loan (x) to the extent
that after giving effect to such Swing Loan, the aggregate Revolving Credit
Outstandings would exceed the Revolving Credit Commitments and (y) in the period
commencing on the first Business Day after it receives notice from the
Administrative Agent or the Required Revolving Lenders that one or more of the
conditions precedent contained in Section 3.2 are not satisfied and ending when
such conditions are satisfied or duly waived. In connection with the making of
any Swing Loan, the Swingline Lender (in its capacity as Swingline Lender) may
but shall not be required to otherwise determine whether the conditions
precedent set forth in Section 3.2 have been satisfied or waived. Each Swing
Loan shall be a Base Rate Loan and must be repaid in full on the earliest of
(i) the funding date of any Borrowing of Revolving Loans and (ii) the Revolving
Credit Termination Date. Within the limits set forth in the first sentence of
this clause (a), amounts of Swing Loans repaid may be reborrowed under this
clause (a).
          (b) Borrowing Procedures. In order to request a Swing Loan, the
Borrower Representative shall give to the Administrative Agent a notice to be
received not later than 1:00 p.m. on the day of the proposed borrowing, which
may be made in a writing substantially in the form of Exhibit D duly completed
(a “Swingline Request”) or by telephone if confirmed promptly but, in any event,
prior to such borrowing, with such a Swingline Request. In addition, if any
Notice of Borrowing requests a Borrowing of Base Rate Loans, the Swing Line
Lender may, notwithstanding anything else to the contrary in Section 2.2, make a
Swing Loan available to the Borrowers in an aggregate amount not to exceed such
proposed Borrowing, and the aggregate amount of the corresponding proposed
Borrowing shall be reduced accordingly by the principal amount of such Swing
Loan. The Administrative Agent shall promptly notify the Swingline Lender of the
details of the requested Swing Loan. Upon receipt of such notice and subject to
the terms of this Agreement, the Swingline Lender may make a Swing Loan
available to the Borrowers by making the proceeds thereof available to the
Administrative Agent and, in turn, the Administrative Agent shall make such
proceeds available to the Borrowers on the date set forth in the relevant
Swingline Request.
          (c) Refinancing Swing Loans. The Swingline Lender may at any time (and
shall not less than once every two weeks) forward a demand to the Administrative
Agent (which the Administrative Agent shall, upon receipt, forward to each
Revolving Credit Lender) that each Revolving Credit Lender pay to the
Administrative Agent, for the account of the Swingline Lender, such Revolving
Credit Lender’s Pro Rata Share of all or a portion of the outstanding Swing
Loans. Each Revolving Credit Lender shall pay such Pro Rata Share to the
Administrative Agent for the account of the Swingline Lender. Upon receipt by
the Administrative Agent of such payment (other than during the continuation of
any Event of Default under Section 9.1(e)), such Revolving Credit Lender shall
be deemed to have made a Revolving Loan to the Borrowers, which, upon receipt of
such payment by the Swingline Lender from the Administrative Agent, the
Borrowers shall be deemed to have used in whole to refinance such Swing Loan. In
addition, regardless of whether any such demand is made, upon the occurrence of
any Event of Default under Section 9.1(e), each Revolving Credit Lender shall be
deemed to have acquired, without recourse or warranty, an undivided interest and
participation in each Swing Loan in an amount equal to such Lender’s Pro Rata
Share of such Swing Loan. If any payment made by any Revolving Credit Lender as
a result of any such demand is not deemed a Revolving Loan, such payment shall
be deemed a funding by such Lender of such participation. Such participation
shall not be otherwise required to be funded. Upon receipt by the Swingline
Lender of any payment
 

46

--------------------------------------------------------------------------------

 

from any Revolving Credit Lender pursuant to this clause (c) with respect to any
portion of any Swing Loan, the Swingline Lender shall promptly pay over to such
Revolving Credit Lender all payments of principal (to the extent received after
such payment by such Lender) and interest (to the extent accrued with respect to
periods after such payment) received by the Swingline Lender with respect to
such portion.
          (d) Obligation to Fund Absolute. Each Revolving Credit Lender’s
obligations pursuant to clause (c) above shall be absolute, unconditional and
irrevocable and shall be performed strictly in accordance with the terms of this
Agreement under any and all circumstances whatsoever, including (A) the
existence of any setoff, claim, abatement, recoupment, defense or other right
that such Lender, any Affiliate thereof or any other Person may have against the
Swingline Lender, any other Secured Party or any other Person, (B) the failure
of any condition precedent set forth in Section 3.2 to be satisfied or the
failure of the Borrowers or Borrower Representative to deliver any notice set
forth in Section 2.2(a) (each of which requirements the Revolving Credit Lenders
hereby irrevocably waive) and (C) any adverse change in the condition (financial
or otherwise) of any Loan Party.
          Section 2.4 Letters of Credit. (a) Commitment and Conditions. On the
terms and subject to the conditions contained herein, each L/C Issuer agrees to
Issue, at the request of the Borrower Representative, in accordance with such
L/C Issuer’s usual and customary business practices, and for the account of the
Borrowers (or, as long as the Borrowers remains responsible for the payment in
full of all amounts drawn thereunder and related fees, costs and expenses, for
the account of any Group Member), Letters of Credit (denominated in Dollars and
with face amounts that are multiples of $500,000 or such lesser amount as may be
agreed by the applicable L/C Issuer) from time to time on any Business Day
during the period commencing one Business Day after the Closing Date through the
earlier of the Revolving Credit Termination Date and seven (7) days prior to the
Scheduled Revolving Credit Termination Date; provided, however, that such L/C
Issuer shall not be under any obligation to Issue any Letter of Credit unless
such L/C Issuer and the Borrower Representative have agreed upon a fronting fee
with respect to such Letter of Credit or upon the occurrence of any of the
following, after giving effect to such Issuance:
          (i) (A) the aggregate Revolving Credit Outstandings would exceed the
aggregate Revolving Credit Commitments or (B) the L/C Obligations for all
Letters of Credit would exceed the L/C Sublimit;
          (ii) the expiration date of such Letter of Credit (A) is not a
Business Day, (B) is more than one year after the date of issuance thereof or
(C) is later than seven (7) days prior to the Scheduled Revolving Credit
Termination Date; provided, however, that any Letter of Credit with a term not
exceeding one year may provide for its renewal for additional periods, with each
such period not exceeding one year as long as (x) each of the Borrowers and such
L/C Issuer have the option to prevent such renewal before the expiration of such
term or any such period and (y) neither such L/C Issuer nor the Borrowers shall
permit any such renewal to extend such expiration date beyond the date set forth
in clause (C) of this Section 2.4(a)(ii); or
          (iii) (A) any fee due in connection with, and on or prior to, such
Issuance has not been paid, (B) such Letter of Credit is requested to be Issued
in a form that is not reasonably acceptable to such L/C Issuer or (C) such L/C
Issuer shall not have received, each in form and substance reasonably acceptable
to it and duly executed by the
 

47

--------------------------------------------------------------------------------

 

Borrowers (and, if such Letter of Credit is issued for the account of any other
Group Member, such Group Member), the documents that such L/C Issuer generally
uses in the ordinary course of its business for the Issuance of letters of
credit of the type of such Letter of Credit (collectively, the “L/C
Reimbursement Agreement”).
For each such Issuance, the applicable L/C Issuer may, but shall not be required
to, determine that, or take notice whether, the conditions precedent set forth
in Section 3.2 have been satisfied or waived in connection with the Issuance of
any Letter of Credit; provided, however, that no Letter of Credit shall be
Issued during the period starting on the first Business Day after the receipt by
such L/C Issuer of notice from the Administrative Agent or the Required
Revolving Lenders that any condition precedent contained in Section 3.2 is not
satisfied and ending on the date all such conditions are satisfied or duly
waived. Furthermore, GE Capital or any of its Affiliates as an L/C Issuer may
elect only to issue Letters of Credit in its own name and may only issue Letters
of Credit to the extent permitted by Requirements of Law.
Notwithstanding anything else to the contrary herein, if any Lender is a
Non-Funding Lender or Impacted Lender, then no L/C Issuer shall be obligated to
Issue any Letters of Credit unless either the Non-Funding Lender or Impacted
Lender has been replaced in accordance with Section 2.18 or Section 11.2, the
L/C Obligations of that Non-Funding Lender or Impacted Lender have been cash
collateralized, the Revolving Credit Commitments of the other Lenders have been
increased by an amount sufficient to satisfy the Administrative Agent that all
future L/C Obligations will be covered by all Revolving Credit Lenders who are
not Non-Funding Lenders or Impacted Lenders, or the L/C Obligations of such
Non-Funding Lender or Impacted Lender have been reallocated to other Revolving
Credit Lenders in a manner consistent with Section 2.4(f)(ii).
          (b) Notice of Issuance. The Borrower Representative shall give the
relevant L/C Issuer and the Administrative Agent a notice of any requested
Issuance of any Letter of Credit, which shall be effective only if received by
such L/C Issuer and the Administrative Agent not later than 11:00 a.m. on the
third Business Day prior to the date of such requested Issuance. Such notice may
be made in a writing substantially the form of Exhibit E duly completed or in a
writing in any other form acceptable to such L/C Issuer (an “L/C Request”) or by
telephone if confirmed promptly, but in any event within one (1) Business Day
prior to such Issuance, with such an L/C Request.
          (c) Reporting Obligations of L/C Issuers. Each L/C Issuer agrees to
provide the Administrative Agent (which, after receipt, the Administrative Agent
shall provide to each Revolving Credit Lender), in form and substance
satisfactory to the Administrative Agent, each of the following on the following
dates: (i) on or prior to (A) any Issuance of any Letter of Credit by such L/C
Issuer, (B) any drawing under any such Letter of Credit or (C) any payment (or
failure to pay when due) by the Borrowers of any related L/C Reimbursement
Obligation, notice thereof, which shall contain a reasonably detailed
description of such Issuance, drawing or payment, (ii) upon the request of the
Administrative Agent (or any Revolving Credit Lender through the Administrative
Agent), copies of any Letter of Credit Issued by such L/C Issuer and any related
L/C Reimbursement Agreement and such other documents and information as may
reasonably be requested by the Administrative Agent and (iii) on the first
Business Day of each calendar week, a schedule of the Letters of Credit Issued
by such L/C Issuer, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth the L/C Obligations for such Letters of
Credit outstanding on the last Business Day of the previous calendar week.
 

48

--------------------------------------------------------------------------------

 

          (d) Acquisition of Participations. Upon any Issuance of a Letter of
Credit in accordance with the terms of this Agreement resulting in any increase
in the L/C Obligations, each Revolving Credit Lender shall be deemed to have
acquired, without recourse or warranty, an undivided interest and participation
in such Letter of Credit and the related L/C Obligations in an amount equal to
such Lender’s Pro Rata Share of such L/C Obligations.
          (e) Reimbursement Obligations of the Borrowers. The Borrowers agree to
pay to the L/C Issuer of any Letter of Credit each L/C Reimbursement Obligation
owing with respect to such Letter of Credit no later than the first Business Day
after the Borrower Representative receives notice from such L/C Issuer that
payment has been made under such Letter of Credit or that such L/C Reimbursement
Obligation is otherwise due (the “L/C Reimbursement Date”) with interest thereon
computed as set forth in clause (i) below. In the event that any L/C Issuer
incurs any L/C Reimbursement Obligation not repaid by the Borrowers as provided
in this clause (e) (or any such payment by the Borrowers is rescinded or set
aside for any reason), such L/C Issuer shall promptly notify the Administrative
Agent of such failure (and, upon receipt of such notice, the Administrative
Agent shall forward a copy to each Revolving Credit Lender) and, irrespective of
whether such notice is given, such L/C Reimbursement Obligation shall be payable
on demand by the Borrowers with interest thereon computed (i) from the date on
which such L/C Reimbursement Obligation arose to the L/C Reimbursement Date, at
the interest rate applicable during such period to Revolving Loans that are Base
Rate Loans and (ii) thereafter until payment in full, at the interest rate
applicable during such period to past due Revolving Loans that are Base Rate
Loans.
          (f) Reimbursement Obligations of the Revolving Credit Lenders.
          (i) Upon receipt of the notice described in clause (e) above from the
Administrative Agent, each Revolving Credit Lender shall pay to the
Administrative Agent for the account of such L/C Issuer its Pro Rata Share of
such L/C Reimbursement Obligation.
          (ii) If any Lender (other than the Lender that is the L/C Issuer that
issued such Letter of Credit) is a Non-Funding Lender, that Non-Funding Lender’s
L/C Reimbursement Obligation shall, at the Administrative Agent’s election at
any time or upon any L/C Issuer’s written request delivered to the
Administrative Agent (whether before or after the occurrence of any Default or
Event of Default), be reallocated to and assumed by the other Lenders pro rata
in accordance with their Pro Rata Shares of the Revolving Loan (calculated as if
the Non-Funding Lender’s Pro Rata Share was reduced to zero and each other
Lender’s Pro Rata Share had been increased proportionately), provided that no
Lender shall be reallocated any such amounts or be required to fund any amounts
that would cause its Revolving Credit Outstandings to exceed its Revolving
Credit Commitment. The “Aggregate Excess Funding Amount” of a Non-Funding Lender
shall be the aggregate amount of (A) all unpaid obligations owing by such Lender
to the Administrative Agent, L/C Issuers, and other Lenders under the Loan
Documents, including such Lender’s Pro Rata Share of all Revolving Loans and L/C
Obligations, plus, without duplication, and (B) all other obligations of such
Non-Funding Lender reallocated to other Lenders pursuant to this clause (ii).
          (iii) By making any payments described in clauses (i) or (ii) above
(other than during the continuation of an Event of Default under subsection
9.1(e)(ii) as to any Borrower or Group Member), such Lender shall be deemed to
have made a
 

49

--------------------------------------------------------------------------------

 

Revolving Loan to the Borrowers, which, upon receipt thereof by such L/C Issuer,
the Borrowers shall be deemed to have used in whole to repay such L/C
Reimbursement Obligation. Any such payment that is not deemed a Revolving Loan
shall be deemed a funding by such Lender of its participation in the applicable
Letter of Credit and related L/C Reimbursement Obligation. Such participation
shall not otherwise be required to be funded. Following receipt by any L/C
Issuer of any payment from any Lender pursuant to this paragraph (f) with
respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer
shall promptly pay over to such Lender all duplicate payments received from
Persons other than Lenders making payment on behalf of a Loan Party by such L/C
Issuer with respect to such portion of such L/C Reimbursement Obligation.
          (iv) For the avoidance of doubt, no Revolving Credit Lender shall be
required to fund any amount which would result in its Pro Rata Outstandings
under the Revolving Credit Facility to exceed its Revolving Credit Commitment.
          (g) Obligations Absolute. The obligations of the Borrowers and the
Revolving Credit Lenders pursuant to clauses (d), (e) and (f) above shall be
absolute, unconditional and irrevocable and performed strictly in accordance
with the terms of this Agreement irrespective of (i) (A) the invalidity or
unenforceability of any term or provision in any Letter of Credit, any document
transferring or purporting to transfer a Letter of Credit, any Loan Document
(including the sufficiency of any such instrument), or any modification to any
provision of any of the foregoing, (B) any document presented under a Letter of
Credit being forged, fraudulent, invalid, insufficient or inaccurate in any
respect or failing to comply with the terms of such Letter of Credit or (C) any
loss or delay, including in the transmission of any document, (ii) the existence
of any setoff, claim, abatement, recoupment, defense or other right that any
Person (including any Group Member) may have against the beneficiary of any
Letter of Credit or any other Person, whether in connection with any Loan
Document or any other Contractual Obligation or transaction, or the existence of
any other withholding, abatement or reduction, (iii) in the case of the
obligations of any Revolving Credit Lender, (A) the failure of any condition
precedent set forth in Section 3.2 to be satisfied (each of which conditions
precedent the Revolving Credit Lenders hereby irrevocably waive) or (B) any
adverse change in the condition (financial or otherwise) of any Loan Party and
(iv) any other act or omission to act or delay of any kind of any Secured Party
or any other Person or any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section 2.4, constitute a legal or equitable discharge of any obligation of any
Borrower or any Revolving Credit Lender hereunder; provided, that nothing herein
shall relieve any L/C Issuer from liability to the Borrowers for its gross
negligence or willful misconduct in paying or failing to pay any drawing under a
Letter of Credit or from liability to the Revolving Credit Lenders for Issuing a
Letter of Credit in violation of the first sentence of the penultimate paragraph
of Section 2.4(a).
          Section 2.5 Reduction and Termination of the Commitments. (a)
Optional. The Borrowers may, upon at least five (5) Business Days’ prior written
notice to the Administrative Agent, terminate in whole or reduce in part ratably
any unused portion of the Revolving Credit Commitments; provided, however, that
each partial reduction shall be in an aggregate amount that is an integral
multiple of $1,000,000.
          (b) Mandatory. All outstanding (i) Revolving Credit Commitments shall
terminate on the Scheduled Revolving Credit Termination Date and (ii) Term Loan
Commitments shall terminate on the Closing Date after the funding of the Term
Loans; provided, however, that
 

50

--------------------------------------------------------------------------------

 

all Commitments shall terminate on October 15, 2010, if all of the conditions
precedent set forth in Section 3.1 have not been satisfied or duly waived on or
before such date.
          Section 2.6 Repayment of Loans. (a) The Borrowers promise to repay the
entire unpaid principal amount of the Revolving Loans and the Swing Loans on the
Scheduled Revolving Credit Termination Date.
          (b) The aggregate principal amount of the Term Loans shall be paid in
equal quarterly installments of $5,000,000 commencing on January 1, 2011 and
continuing on the first day of each January, April, July and October thereafter,
with a final scheduled installment of the Term Loans due and payable on the Term
Loan Maturity Date in an amount equal to the entire remaining principal balance
of the Term Loans.
          Section 2.7 Optional Prepayments. The Borrowers may prepay the
outstanding principal amount of any Loan in whole or in part at any time
(together with any breakage costs that may be owing pursuant to Section 2.16(a)
after giving effect to such prepayment); provided, however, that each partial
prepayment that is not of the entire outstanding amount under any Facility shall
be in an aggregate amount that is an integral multiple of $1,000,000.
          Section 2.8 Mandatory Prepayments. (a) Excess Cash Flow. The Borrowers
shall pay or cause to be paid to the Administrative Agent, within five
(5) Business Days after the last date Financial Statements can be delivered
pursuant to Section 6.1(b) for any Fiscal Year ending after the Closing Date, an
amount equal to (i) for any such Fiscal Year ending before the MedQuist
Consolidation Date, (A) 50% of the Excess Cash Flow of MedQuist for such Fiscal
Year if (1) such Fiscal Year ended on or before December 31, 2011 or (2) the
Consolidated Total Leverage Ratio of Holdings on the last day of such Fiscal
Year was equal to or greater than 1.50:1.00 and (B) otherwise 25% of the Excess
Cash Flow of MedQuist and (ii) for any such Fiscal Year ending on or after the
MedQuist Consolidation Date, (A) 50% of the Excess Cash Flow of Holdings for
such Fiscal Year if (1) such Fiscal Year ended on or before December 31, 2011 or
(2) the Consolidated Total Leverage Ratio of Holdings on the last day of such
Fiscal Year was equal to or greater than 1.50:1.00 and (B) otherwise 25% of
Excess Cash Flow of Holdings; provided, however, that with respect to the Fiscal
Year ended December 31, 2010, such calculation shall be based on the period
beginning on the Signing Date and ending on December 31, 2010; provided,
further, that, notwithstanding the foregoing, (i) for any Fiscal Year ending
before the MedQuist Consolidation Date, (A) if the Consolidated Net Leverage
Ratio is equal to or greater than 2:50:1:00, the Borrowers shall pay to the
Administrative Agent 65% of the Excess Cash Flow of MedQuist for such Fiscal
Year in lieu of the amount provided above if the amount calculated pursuant to
this clause is greater than what would otherwise be payable pursuant to this
Section 2.8(a), and (B) if the Consolidated Net Leverage Ratio is less than
2.50:1.00, but equal to or greater than 2.00:1.00, the Borrowers shall pay to
the Administrative Agent 60% of the Excess Cash Flow of MedQuist for such Fiscal
Year in lieu of the amount provided above if the amount payable pursuant to this
clause is greater than what would otherwise be payable pursuant to this Section
2.8(a), and (ii) for any Fiscal Year ending on or after the MedQuist
Consolidation Date, (A) if the Consolidated Net Leverage Ratio is equal to or
greater than 2.50:1.00, the Borrowers shall pay to the Administrative Agent 65%
of the Excess Cash Flow of Holdings for such Fiscal Year in lieu of the amount
provided above if the amount payable pursuant to this clause is greater than the
amount that would otherwise be payable pursuant to this Section 2.8(a), and
(B) if the Consolidated Net Leverage Ratio is less than 2.50:1.00, but equal to
or greater than 2.00:1.00, the Borrowers shall pay to the Administrative Agent
60% of the Excess Cash Flow of Holdings for
 

51

--------------------------------------------------------------------------------

 

such Fiscal Year in lieu of the amount provided above if the amount payable
pursuant to this clause is greater than the amount that would otherwise be
payable pursuant to this Section 2.8(a); and provided, finally, that all amounts
of Excess Cash Flow calculated pursuant to this Section 2.8(a) shall be reduced
by the amount of all voluntary prepayments of Indebtedness made during the
Fiscal Year for which Excess Cash Flow is being calculated (but only if such
Indebtedness may be reborrowed, to the extent such prepayment results in a
permanent reduction in commitments thereof and excluding any prepayment of the
Subordinated Notes).
          (b) Equity and Debt Issuances. Upon receipt on or after the Closing
Date by any Group Member of Net Cash Proceeds arising from the issuance or Sale
by any Group Member of its own Stock (other than (A) the first $100,000,000 of
Net Cash Proceeds from the Holdings IPO plus the Designated IPO Proceeds Amount,
and (B) any Net Cash Proceeds arising from the issuance of common Stock of
Holdings (1) to the Sponsor or any Affiliate of the Sponsor (other than its
portfolio companies) or (2) in the Ordinary Course of Business to any director,
member of the management or employee of Holdings or its Subsidiaries), the
Borrowers shall immediately pay or cause to be paid to the Administrative Agent
an amount equal to 50% of such Net Cash Proceeds; provided, however, that no
prepayment shall be required hereunder from the issuance of Stock by Holdings if
the Consolidated Total Leverage Ratio of Holdings for the most recently ended
Fiscal Quarter for which Financial Statements required under Section 6.1 have
been delivered was less than 1.50:1.00. Upon receipt on or after the Closing
Date by any Group Member of Net Cash Proceeds arising from the incurrence by any
Group Member of Indebtedness of the type specified in clause (a) or (b) of the
definition thereof (other than any such Indebtedness permitted hereunder in
Section 8.1), the Borrowers shall immediately pay or cause to be paid to the
Administrative Agent an amount equal to such Net Cash Proceeds.
          (c) Asset Sales and Property Loss Events. Within five (5) Business
Days of receipt by any Group Member of Net Cash Proceeds arising from (i) any
Sale by any Group Member of any of its property (excluding Net Cash Proceeds
arising from Sales of its own Stock and Sales of property permitted hereunder in
reliance upon Section 8.4 but including Net Cash Proceeds in excess of
$12,000,000 arising from the RCM Sale) or (ii) any Property Loss Event with
respect to any property of any Group Member to the extent resulting, in the
aggregate with all other such Property Loss Events, in the receipt by any of
them of Net Cash Proceeds in excess of $1,000,000, the Borrowers shall
immediately pay or cause to be paid to the Administrative Agent an amount equal
to such Net Cash Proceeds; provided, however, that, upon any such receipt, as
long as no Event of Default shall be continuing, any Group Member may make
Permitted Reinvestments with such Net Cash Proceeds and the Borrowers shall not
be required to make or cause such payment to the extent (x) such Net Cash
Proceeds are intended to be used to make Permitted Reinvestments and (y) on each
Reinvestment Prepayment Date for such Net Cash Proceeds, the Borrowers shall pay
or cause to be paid to the Administrative Agent an amount equal to the
Reinvestment Prepayment Amount applicable to such Reinvestment Prepayment Date
and such Net Cash Proceeds.
          (d) Indenture Prepayments. Notwithstanding the foregoing in this
Section 2.8, to the extent that any prepayment is required under the
Subordinated Note Documents in connection with any asset sales or equity
issuances, (together with any term of similar effect), the Borrowers shall, in
the event of receipt by any Loan Party or any Subsidiaries of any Loan Party of
the Net Cash Proceeds thereof, pay or cause to be paid to the Administrative
Agent an amount, not to exceed such Net Cash Proceeds, sufficient, and within
the time period required under the applicable Subordinated Note Documents, in
each case to ensure that no
 

52

--------------------------------------------------------------------------------

 

Group Member is required to prepay, redeem, defease, purchase or make an offer
to purchase any Indebtedness evidenced or governed by Subordinated Note
Documents or cause any of the foregoing, or grant or honor any option or other
right to do any of the foregoing, to the extent, in the absence of such
obligation of the Borrowers hereunder, a Group Member would be required to make
or cause any such prepayment, redemption, defeasance, purchase or offer or grant
any such option.
          (e) Excess Outstandings. On any date on which the aggregate principal
amount of Revolving Credit Outstandings exceeds the aggregate Revolving Credit
Commitments, the Borrowers shall pay to the Administrative Agent an amount equal
to such excess.
          (f) Application of Payments. Any payments made to the Administrative
Agent pursuant to this Section 2.8 shall be applied to the Obligations in
accordance with Section 2.12(b).
          Section 2.9 Interest. (a) Rate. All Loans and the outstanding amount
of all other Obligations (other than pursuant to Secured Hedging Agreements)
shall bear interest, in the case of Loans, on the unpaid principal amount
thereof from the date such Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and payable until, in
all cases, paid in full, except as otherwise provided in clause (c) below, as
follows: (i) in the case of Base Rate Loans, at a rate per annum equal to the
sum of the Base Rate and the Applicable Margin, each as in effect from time to
time, (ii) in the case of Eurodollar Rate Loans, at a rate per annum equal to
the sum of the Eurodollar Rate and the Applicable Margin, each as in effect for
the applicable Interest Period, and (iii) in the case of other Obligations, at a
rate per annum equal to the sum of the Base Rate and the Applicable Margin for
Revolving Loans that are Base Rate Loans, each as in effect from time to time.
          (b) Payments. Interest accrued shall be payable in arrears (i) if
accrued on the principal amount of any Loan, (A) at maturity (whether by
acceleration or otherwise), (B) if such Loan is a Term Loan, upon the payment or
prepayment of the principal amount on which such interest has accrued and (C)(1)
if such Loan is a Base Rate Loan (including a Swing Loan), on the last day of
each calendar quarter commencing on the first such day following the making of
such Loan, (2) if such Loan is a Eurodollar Rate Loan, on the last day of each
Interest Period applicable to such Loan and, if applicable, on each date during
such Interest Period occurring every three (3) months from the first day of such
Interest Period and (ii) if accrued on any other Obligation, on demand from any
time after the time such Obligation is due and payable (whether by acceleration
or otherwise).
          (c) Default Interest. Notwithstanding the rates of interest specified
in clause (a) above or elsewhere in any Loan Document (but without duplication
of any other default rate provided in any Loan Document, including
Section 2.11(b)), effective immediately upon (A) the occurrence of any Event of
Default under Section 9.1(e)(ii) or (B) the delivery of a notice by the
Administrative Agent or the Required Lenders to the Borrower Representative
during the continuance of any other Event of Default and, in each case, for as
long as any Event of Default shall be continuing, the principal balance of all
Obligations (including any Obligation that bears interest by reference to the
rate applicable to any other Obligation) then due and payable shall bear
interest at a rate that is 2% per annum in excess of the interest rate
applicable to such Obligations from time to time, payable on demand or, in the
absence of demand, on the date that would otherwise be applicable.
 

53

--------------------------------------------------------------------------------

 

          (d) Savings Clause. Anything herein to the contrary notwithstanding,
the obligations of the Borrowers hereunder shall be subject to the limitation
that payments of interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the extent) that
contracting for or receiving such payment by the respective Lender would be
contrary to the provisions of any law applicable to such Lender limiting the
highest rate of interest which may be lawfully contracted for, charged or
received by such Lender, and in such event the Borrowers shall pay such Lender
interest at the highest rate permitted by applicable law (“Maximum Lawful
Rate”); provided, however, that if at any time thereafter the rate of interest
payable hereunder is less than the Maximum Lawful Rate, the Borrowers shall
continue to pay interest hereunder at the Maximum Lawful Rate until such time as
the total interest received by the Administrative Agent, on behalf of Lenders,
is equal to the total interest that would have been received had the interest
payable hereunder been (but for the operation of this paragraph) the interest
rate payable since the Closing Date as otherwise provided in this Agreement.
          Section 2.10 Conversion and Continuation Options. (a) Option. The
Borrowers may elect (i) in the case of any Eurodollar Rate Loan, (A) to continue
such Eurodollar Rate Loan or any portion thereof for an additional Interest
Period on the last day of the Interest Period applicable thereto and (B) to
convert such Eurodollar Rate Loan or any portion thereof into a Base Rate Loan
at any time on any Business Day, subject to the payment of any breakage costs
required by Section 2.16(a), and (ii) in the case of Base Rate Loans (other than
Swing Loans), to convert such Base Rate Loans or any portion thereof into
Eurodollar Rate Loans at any time on any Business Day upon three (3) Business
Days’ prior notice received by 1:00 p.m. on such Business Day; provided,
however, that, (x) for each Interest Period, the aggregate amount of Eurodollar
Rate Loans having such Interest Period must be an integral multiple of
$1,000,000 and (y) no conversion in whole or in part of Base Rate Loans to
Eurodollar Rate Loans and no continuation in whole or in part of Eurodollar Rate
Loans shall be permitted at any time at which (1) an Event of Default shall be
continuing and the Administrative Agent or the Required Lenders shall have
determined in their sole discretion not to permit such conversions or
continuations or (2) such continuation or conversion would be made during a
suspension imposed by Section 2.15.
          (b) Procedure. Each such election shall be made by giving the
Administrative Agent at least three (3) Business Days’ prior notice in
substantially the form of Exhibit F (a “Notice of Conversion or Continuation”)
duly completed. The Administrative Agent shall promptly notify each Lender of
its receipt of a Notice of Conversion or Continuation and of the options
selected therein. If the Administrative Agent does not receive a timely Notice
of Conversion or Continuation from the Borrower Representative containing a
permitted election to continue or convert any Eurodollar Rate Loan, then, upon
the expiration of the applicable Interest Period, such Loan shall be
automatically converted to a Base Rate Loan. Each partial conversion or
continuation shall be allocated ratably among the Lenders in the applicable
Facility in accordance with their Pro Rata Share.
          Section 2.11 Fees. (a) Unused Commitment Fee. The Borrowers shall pay
to the Administrative Agent, for the ratable benefit of the Revolving Credit
Lenders, a fee (the “Unused Commitment Fee”) calculated on a daily basis in an
amount equal to (i) the ending daily balance of the aggregate Revolving Credit
Commitments, less (ii) the sum of the ending daily balance of all Revolving
Loans and L/C Obligations, in each case outstanding for each day occurring
during the preceding calendar quarter, multiplied by one-half of one percent
(0.50%) per annum. Such fee shall be payable quarterly in arrears on the last
day of the fiscal quarter following the date hereof and the last day of each
fiscal quarter thereafter. The Unused
 

54

--------------------------------------------------------------------------------

 

Commitment Fee provided in this subsection 2.11(a) shall accrue at all times
from and after execution and delivery of this Agreement through and including
the date on which the Revolving Credit Commitments are terminated. Following
receipt of the Unused Commitment Fee, the Administrative Agent shall pay to each
Revolving Credit Lender from, and to the extent of, the Unused Commitment Fee an
amount equal to its Pro Rata Share calculated as if the average daily balance of
Swing Loans for the preceding calendar month had been zero.
          (b) Letter of Credit Fees. The Borrowers agree to pay, with respect to
all Letters of Credit issued by any L/C Issuer, (i) to such L/C Issuer, the
fees, documentary and processing charges as separately agreed between the
Borrowers and such L/C Issuer or otherwise in accordance with such L/C Issuer’s
standard schedule in effect at the time of determination thereof, (ii) to the
Administrative Agent, for the benefit of the L/C Issuer, a fronting fee equal to
0.125% per annum (or such other fronting fee as such L/C Issuer and the Borrower
Representative shall agree), multiplied by the face amount of such Letter of
Credit and (iii) to the Administrative Agent, for the benefit of the Revolving
Credit Lenders according to their Pro Rata Shares, a fee accruing at a rate per
annum equal to the Applicable Margin for Revolving Loans that are Eurodollar
Rate Loans on the maximum undrawn face amount of such Letters of Credit, such
fees under clauses (ii) and (iii) shall be payable in arrears (A) on the last
day of each calendar quarter, ending after the issuance of such Letter of Credit
and (B) on the Revolving Credit Termination Date; provided, however, that the
fee payable under clause (iii) shall be increased by 2% per annum and shall be
payable, in addition to being payable on any date it is otherwise required to be
paid hereunder, on demand effective immediately upon (x) the occurrence of any
Event of Default under Section 9.1(e)(ii) or (y) the delivery of a notice by the
Administrative Agent or the Required Lenders to the Borrower Representative
during the continuance of any other Event of Default and, in each case, for as
long as such Event of Default shall be continuing.
          (c) Additional Fees. The Borrowers shall pay to the Administrative
Agent and its Related Persons their reasonable and customary fees and expenses
in connection with any payments made pursuant to Section 2.16(a) (Breakage
Costs) and shall pay to the Administrative Agent and its Related Persons, as
applicable, all additional fees described in the Fee Letter.
          Section 2.12 Application of Payments. (a) Application of Voluntary
Prepayments or Other Payments. Unless otherwise provided in this Section 2.12 or
elsewhere in any Loan Document, all payments and any other amounts received by
the Administrative Agent from or for the benefit of the Borrowers shall be
applied to repay the Obligations the Borrower Representative designates.
          (b) Application of Mandatory Prepayments. Subject to the provisions of
clause (c) below with respect to the application of payments during the
continuance of an Event of Default, any payment made by the Borrowers to the
Administrative Agent pursuant to Section 2.8 (other than pursuant to
Section 2.8(e)) or any other prepayment of the Obligations required to be
applied in accordance with this clause (b) shall be applied first, ratably to
the remaining installments of the Term Loans until the Term Loans have been paid
in full, second, to repay the outstanding principal balance of the Swing Loans
until paid in full, third, to repay the outstanding principal balance of the
Revolving Loans until paid in full (which shall not effect a permanent reduction
in the Revolving Credit Facility), and (if and only if an Event of Default has
occurred and is continuing), fourth, to provide cash collateral to the extent
and in the manner provided for in Section 9.3 and, then, any excess shall be
retained by the Borrowers. Subject to the provisions of clause (c) below with
respect to the application of payments during the
 

55

--------------------------------------------------------------------------------

 

continuance of an Event of Default, any payment made by the Borrowers to the
Administrative Agent pursuant to Section 2.8(e) shall be applied first, to repay
the outstanding principal balance of the Swing Loans until paid in full, second,
to repay the outstanding principal balance of the Revolving Loans until paid in
full (which shall not effect a permanent reduction in the Revolving Credit
Facility), and third (if and only if an Event of Default has occurred and is
continuing), to provide cash collateral to the extent and in the manner provided
for in Section 9.3.
          (c) Application of Payments During an Event of Default. Holdings and
each Borrower hereby irrevocably waives, and agrees to cause each Loan Party and
each other Group Member to waive, the right to direct the application during the
continuance of an Event of Default of any and all payments in respect of any
Obligation and any proceeds of Collateral and agrees that, notwithstanding the
provisions of clause (a) above, the Administrative Agent may, and, upon either
(A) the direction of the Required Lenders or (B) the termination of the
Revolving Credit Commitment or the acceleration of any Obligation pursuant to
Section 9.2, shall, apply all payments in respect of any Obligation, all funds
on deposit in any Cash Collateral Account and all other proceeds of Collateral
(i) first, to pay Obligations in respect of any cost or expense reimbursements,
fees or indemnities then due to the Administrative Agent, (ii) second, to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to the Lenders and the L/C Issuers, (iii) third, to pay
interest then due and payable in respect of the Loans and L/C Reimbursement
Obligations, (iv) fourth, to repay the outstanding principal amounts of the
Loans and funded L/C Reimbursement Obligations, to provide cash collateral for
contingent L/C Reimbursement Obligations in the manner and to the extent
described in Section 9.3 and to pay amounts owing with respect to Secured
Hedging Agreements and (v) fifth, to the ratable payment of all other
Obligations, and, then, any excess shall be paid to the Borrowers or as
otherwise ordered by a court of competent jurisdiction.
          (d) Application of Payments Generally. All payments that would
otherwise be allocated to the Revolving Credit Lenders pursuant to
Section 2.12(c) shall instead be allocated first, to repay interest on Swing
Loans, on any portion of the Revolving Loans that the Administrative Agent may
have advanced on behalf of any Lender and on any L/C Reimbursement Obligation,
in each case for which the Administrative Agent or, as the case may be, the L/C
Issuer has not then been reimbursed by such Lender or the Borrowers, second to
pay the outstanding principal amount of the foregoing obligations and third, to
repay the Revolving Loans. All repayments of any Revolving Loans or Term Loans
shall be applied first, to repay such Loans outstanding as Base Rate Loans and
then, to repay such Loans outstanding as Eurodollar Rate Loans, with those
Eurodollar Rate Loans having earlier expiring Interest Periods being repaid
prior to those having later expiring Interest Periods. Except as may be
otherwise expressly provided herein, all repayments of Term Loans shall be
applied to reduce the remaining installments of such outstanding principal
amounts of the Term Loans in the stated order of their maturities. If sufficient
amounts are not available to repay all outstanding Obligations described in any
priority level set forth in this Section 2.12, the available amounts shall be
applied, unless otherwise expressly specified herein, to such Obligations
ratably based on the proportion of the Secured Parties’ interest in such
Obligations. Any priority level set forth in this Section 2.12 that includes
interest shall include all such interest, whether or not accruing after the
filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceeding, and whether or not a claim for post-filing
or post-petition interest is allowed in any such proceeding.
 

56

--------------------------------------------------------------------------------

 

          Section 2.13 Payments and Computations. (a) Procedure. The Borrowers
shall make each payment under any Loan Document not later than 11:00 a.m. on the
day when due to the Administrative Agent by wire transfer or ACH transfer (which
shall be the exclusive means of payment hereunder) to the following account (the
“Collection Account”) (or at such other account or by such other means to such
other address as the Administrative Agent shall have notified the Borrower
Representative in writing within a reasonable time prior to such payment) in
immediately available Dollars and without setoff or counterclaim:
ABA No. 021-001-033
Account Number 502-861-90
Deutsche Bank Trust Company Americas, New York, New York
Account Name: GECC HFS/Mubadala (ACBS)
Reference: MedQuist Inc. (HFS2875)
The Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest or
fees to the Lenders, in accordance with the application of payments set forth in
Section 2.12. The Lenders shall make any payment under any Loan Document in
immediately available Dollars and without setoff or counterclaim. Each Lender
shall make each payment for the account of any L/C Issuer or Swingline Lender
required pursuant to Section 2.3 or 2.4 (A) if the notice or demand therefor was
received by such Lender prior to 11:00 a.m. on any Business Day, on such
Business Day and (B) otherwise, on the Business Day following such receipt of
notice or demand. Payments received by the Administrative Agent after 11:00 a.m.
shall be deemed to be received on the next Business Day.
          (b) Computations of Interests and Fees. All computations of interest
and of fees shall be made by the Administrative Agent on the basis of a year of
360 days (or, in the case of Base Rate Loans whose interest rate is calculated
based on the rate set forth in clause (a) of the definition of “Base Rate”,
365/366 days), in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
and fees are payable. Each determination of an interest rate or the amount of a
fee hereunder shall be made by the Administrative Agent (including
determinations of a Eurodollar Rate or Base Rate in accordance with the
definitions of “Eurodollar Rate” and “Base Rate”, respectively) and shall be
conclusive, binding and final for all purposes, absent manifest error.
          (c) Payment Dates. Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, the due date for such payment shall
be extended to the next succeeding Business Day without any increase in such
payment as a result of additional interest or fees; provided, however, that such
interest and fees shall continue accruing as a result of such extension of time.
          (d) Advancing Payments. Unless the Administrative Agent shall have
received notice from the Borrower Representative to the Lenders prior to the
date on which any payment is due hereunder that the Borrowers will not make such
payment in full, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent that the Borrowers shall not have made
such payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender together
with interest thereon (at the Federal Funds Rate for the first Business Day and
thereafter, at the rate applicable to Base Rate Loans
 

57

--------------------------------------------------------------------------------

 

under the applicable Facility) for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Administrative Agent.
          Section 2.14 Evidence of Debt. (a) Records of Lenders. Each Lender
shall maintain in accordance with its usual practice accounts evidencing
Indebtedness of the Borrowers to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement. In
addition, each Lender having sold a participation in any of its Obligations or
having identified an SPV as such to the Administrative Agent, acting as
Administrative Agent of the Borrowers solely for this purpose and solely for tax
purposes, shall establish and maintain at its address referred to in
Section 11.11 (or at such other address as such Lender shall notify the Borrower
Representative) a record of ownership, in which such Lender shall register by
book entry (A) the name and address of each such participant and SPV (and each
change thereto, whether by assignment or otherwise) and (B) the rights, interest
or obligation of each such participant and SPV in any Obligation, in any
Commitment and in any right to receive any payment hereunder.
          (b) Records of the Administrative Agent. The Administrative Agent,
acting as Administrative Agent of the Borrowers solely for tax purposes and
solely with respect to the actions described in this Section 2.14, shall
establish and maintain at its address referred to in Section 11.11 (or at such
other address as Administrative Agent may notify the Borrower Representative)
(A) a record of ownership (the “Register”) in which the Administrative Agent
agrees to register by book entry the interests (including any rights to receive
payment hereunder) of the Administrative Agent, each Lender and each L/C Issuer
in the Term Loans and the Revolving Credit Outstandings, each of their
obligations under this Agreement to participate in each Loan, Letter of Credit
and L/C Reimbursement Obligation, and any assignment of any such interest,
obligation or right and (B) accounts in the Register in accordance with its
usual practice in which it shall record (1) the names and addresses of the
Lenders and the L/C Issuers (and each change thereto pursuant to Section 2.18
(Substitution of Lenders) and Section 11.2 (Assignments and Participations;
Binding Effect)), (2) the Commitments of each Lender, (3) the amount of each
Loan and each funding of any participation described in clause (A) above, for
Eurodollar Rate Loans, the Interest Period applicable thereto, (4) the amount of
any principal or interest due and payable or paid, (5) the amount of the L/C
Reimbursement Obligations due and payable or paid and (6) any other payment
received by the Administrative Agent from the Borrowers and its application to
the Obligations.
          (c) Registered Obligations. Notwithstanding anything to the contrary
contained in this Agreement, the Loans (including any Notes evidencing such
Loans and, in the case of Revolving Loans, the corresponding obligations to
participate in L/C Obligations and Swing Loans) and the L/C Reimbursement
Obligations are registered obligations, the right, title and interest of the
Lenders and the L/C Issuers and their assignees in and to such Loans or L/C
Reimbursement Obligations, as the case may be, shall be transferable only upon
notation of such transfer in the Register and no assignment thereof shall be
effective until recorded therein. This Section 2.14 and Section 11.2 shall be
construed so that the Loans and L/C Reimbursement Obligations are at all times
maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2)
and 881(c)(2) of the Code and any related regulations (and any successor
provisions).
          (d) Prima Facie Evidence. The entries made in the Register and in the
accounts maintained pursuant to clauses (a) and (b) above shall, to the extent
permitted by applicable Requirements of Law, be prima facie evidence of the
existence and amounts of the
 

58

--------------------------------------------------------------------------------

 

obligations recorded therein; provided, however, that no error in such account
and no failure of any Lender or the Administrative Agent to maintain any such
account shall affect the obligations of any Loan Party to repay the Loans in
accordance with their terms. In addition, the Loan Parties, the Administrative
Agent, the Lenders and the L/C Issuers shall treat each Person whose name is
recorded in the Register as a Lender or L/C Issuer, as applicable, for all
purposes of this Agreement. Information contained in the Register with respect
to any Lender or any L/C Issuer shall be available for access by the Borrowers,
the Administrative Agent, such Lender or such L/C Issuer at any reasonable time
and from time to time upon reasonable prior notice. No Lender or L/C Issuer
shall, in such capacity, have access to or be otherwise permitted to review any
information in the Register other than information with respect to such Lender
or L/C Issuer unless otherwise agreed by the Administrative Agent.
          (e) Notes. Upon any Lender’s request, the Borrowers shall promptly
execute and deliver Notes to such Lender evidencing the Loans of such Lender in
a Facility and substantially in the form of Exhibit B-1 or B-2, as applicable;
provided, however, that only one Note for each Facility shall be issued to each
Lender, except (i) to an existing Lender exchanging existing Notes to reflect
changes in the Register relating to such Lender, in which case the new Notes
delivered to such Lender shall be dated the date of the original Notes and
(ii) in the case of loss, destruction or mutilation of existing Notes and
similar circumstances. Each Note, if issued, shall only be issued as means to
evidence the right, title or interest of a Lender or a registered assignee in
and to the related Loan, as set forth in the Register, and in no event shall any
Note be considered a bearer instrument or obligation.
          Section 2.15 Suspension of Eurodollar Rate Option. Notwithstanding any
provision to the contrary in this Article 2, the following shall apply:
          (a) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that (A) the Administrative Agent determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to which the
Eurodollar Rate is determined or (B) the Required Lenders notify the
Administrative Agent that the Eurodollar Rate for any Interest Period will not
adequately reflect the cost to the Lenders as a whole of making or maintaining
such Loans for such Interest Period, the Administrative Agent shall promptly so
notify the Borrower Representative and the Lenders, whereupon the obligation of
each Lender to make or to continue Eurodollar Rate Loans shall be suspended as
provided in clause (c) below until the Administrative Agent shall notify the
Borrower Representative that it or the Required Lenders, as the case may be,
have determined that the circumstances causing such suspension no longer exist.
          (b) Illegality. If any Lender determines in good faith that the
introduction of, or any change in or in the interpretation of, any Requirement
of Law after the date of this Agreement shall make it unlawful, or any
Governmental Authority shall assert that it is unlawful, for any Lender or its
applicable lending office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower Representative through the Administrative Agent,
the obligation of such Lender to make or to continue Eurodollar Rate Loans shall
be suspended as provided in clause (c) below until such Lender shall, through
the Administrative Agent, notify the Borrower Representative that it has
determined that it may lawfully make Eurodollar Rate Loans.
          (c) Effect of Suspension. If the obligation of any Lender to make or
to continue Eurodollar Rate Loans is suspended, (A) the obligation of such
Lender to convert Base
 

59

--------------------------------------------------------------------------------

 

Rate Loans into Eurodollar Rate Loans shall be suspended, (B) such Lender shall
make a Base Rate Loan at any time such Lender would otherwise be obligated to
make a Eurodollar Rate Loan, (C) the Borrower Representative may revoke any
pending Notice of Borrowing or Notice of Conversion or Continuation to make or
continue any Eurodollar Rate Loan or to convert any Base Rate Loan into a
Eurodollar Rate Loan and (D) each Eurodollar Rate Loan of such Lender shall, on
the last day of the current Interest Period thereof (or earlier if required by
law) be converted into a Base Rate Loan.
          Section 2.16 Breakage Costs; Increased Costs; Capital Requirements.
(a) Breakage Costs. The Borrowers shall compensate each Lender, upon demand from
such Lender to the Borrower Representative (with copy to the Administrative
Agent), for all Liabilities (including, in each case, those incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Lender to prepare to fund, to fund or to maintain the Eurodollar Rate Loans of
such Lender to the Borrowers but excluding any loss of the Applicable Margin on
the relevant Loans) that such Lender may incur (A) to the extent, for any reason
other than solely by reason of such Lender being a Non-Funding Lender, a
proposed Borrowing, conversion into or continuation of Eurodollar Rate Loans
does not occur on a date specified therefor in a Notice of Borrowing or a Notice
of Conversion or Continuation or in a similar request made by telephone by the
Borrower Representative, (B) to the extent any Eurodollar Rate Loan is paid
(whether through a scheduled, optional or mandatory prepayment) or converted to
a Base Rate Loan (including because of Section 2.15) on a date that is not the
last day of the applicable Interest Period or (C) as a consequence of any
failure by the Borrowers to repay Eurodollar Rate Loans when required by the
terms hereof. For purposes of this clause (a), each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it using a matching deposit or
other borrowing in the London interbank market.
          (b) Increased Costs. If at any time any Lender or L/C Issuer
determines in good faith that, after the date hereof, the adoption of, or any
change in or in the interpretation, application or administration of, or
compliance with, any Requirement of Law (other than any imposition or increase
of Eurodollar Reserve Requirements) from any Governmental Authority shall have
the effect of (i) increasing the cost to such Lender of making, funding or
maintaining any Eurodollar Rate Loan or to agree to do so or of participating,
or agreeing to participate, in extensions of credit, (ii) increasing the cost to
such L/C Issuer of Issuing or maintaining any Letter of Credit or of agreeing to
do so or (iii) imposing any other cost to such Lender or L/C Issuer with respect
to compliance with its obligations under any Loan Document, then, upon demand by
such Lender or L/C Issuer (with copy to the Administrative Agent), the Borrowers
shall pay to the Administrative Agent for the account of such Lender or L/C
Issuer amounts sufficient to compensate such Lender or L/C Issuer for such
increased cost;. Any amounts payable under this Section shall be without
duplication of any amounts payable in respect of Taxes under Section 2.17.
          (c) Increased Capital Requirements. If at any time any Lender or L/C
Issuer determines in good faith that, after the date hereof, the adoption of, or
any change in or in the interpretation, application or administration of, or
compliance with, any Requirement of Law (other than any imposition or increase
of Eurodollar Reserve Requirements) from any Governmental Authority regarding
capital adequacy, reserves, special deposits, compulsory loans, insurance
charges against property of, deposits with or for the account of, Obligations
owing to, or other credit extended or participated in by, any Lender or L/C
Issuer or any similar requirement (in each case other than any imposition or
increase of Eurodollar Reserve
 

60

--------------------------------------------------------------------------------

 

Requirements) shall have the effect of reducing the rate of return on the
capital of such Lender’s or L/C Issuer (or any corporation controlling such
Lender or L/C Issuer) as a consequence of its obligations under or with respect
to any Loan Document or Letter of Credit to a level below that which, taking
into account the capital adequacy policies of such Lender, L/C Issuer or
corporation, such Lender, L/C Issuer or corporation could have achieved but for
such adoption or change, then, upon demand from time to time by such Lender or
L/C Issuer (with a copy of such demand to the Administrative Agent), the
Borrowers shall pay to the Administrative Agent for the account of such Lender
amounts sufficient to compensate such Lender for such reduction.
          (d) Compensation Certificate. Each demand for compensation under this
Section 2.16 shall be accompanied by a certificate of the Lender or L/C Issuer
claiming such compensation, setting forth the amounts to be paid hereunder,
which certificate shall be conclusive, binding and final for all purposes,
absent manifest error; provided, that the Borrowers shall not be required to
compensate any Lender or L/C Issuer pursuant to this Section 2.16 for any
amounts incurred more than six months prior to the date that such Lender or L/C
Issuer notifies the Borrower Representative, in writing of the amounts and of
such Lender’s or L/C Issuer’s intention to claim compensation thereof; provided,
further, that if the event giving rise to such increase is retroactive, then the
six-month period referred to above shall be extended to include the period of
retroactive effect thereof. In determining such amount, such Lender or L/C
Issuer may use any reasonable averaging and attribution methods.
          Section 2.17 Taxes. (a) Payments Free and Clear of Taxes. Except as
otherwise provided in this Section 2.17, each payment by any Loan Party under
any Loan Document shall be made free and clear of, and without deduction for,
any present or future taxes, levies, imposts, deductions, charges or
withholdings and all Liabilities with respect thereto (collectively, but
excluding the taxes set forth in clauses (i), (ii) and (iii) below, “Taxes”),
other than (i) taxes imposed on or measured by reference to net income and
franchise taxes imposed in lieu of net income taxes, in each case imposed on any
Secured Party as a result of a present or former connection between such Secured
Party and the jurisdiction imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any connection arising solely
from such Person having executed, delivered or performed its obligations or
received a payment under, or enforced, any Loan Document), (ii) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction described in clause (i), and (iii) any withholding tax that
is imposed (including, without limitation, under Section 1441, 1442, 1471 or
1472 of the Code) on amounts payable to any Secured Party at the time such
Secured Party becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Secured Party’s failure to deliver the
documentation required to be delivered pursuant to clause (f) below, except to
the extent that such Secured Party or its assignor (if any) was entitled, at the
time of designation of a new lending office (or assignment) to receive
additional amounts from the Borrowers with respect to such withholding tax
pursuant to Section 2.17(b).
          (b) Gross-Up. If any Taxes shall be required by law to be deducted
from or in respect of any amount payable under any Loan Document (other than any
Secured Hedging Agreement) to any Secured Party (i) such amount shall be
increased as necessary to ensure that, after all such required deductions
(including deductions applicable to any additional sums payable under this
Section 2.17(b)) are made, such Secured Party receives the amount it would have
received had no such deductions been made, (ii) the relevant Loan Party shall
make such deductions, (iii) the relevant Loan Party shall timely pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable Requirements of Law and
 

61

--------------------------------------------------------------------------------

 

(iv) within 30 days after such payment is made, the relevant Loan Party shall
deliver to the Administrative Agent an original or certified copy of a receipt
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.
          (c) Other Taxes. In addition, the Borrowers agree to pay, and
authorizes the Administrative Agent to pay in its name, any stamp, documentary,
excise or property tax, charges or similar levies imposed by any applicable
Requirement of Law or Governmental Authority and all Liabilities with respect
thereto (including by reason of any delay in payment thereof), in each case
arising from the execution, delivery or registration of, or otherwise with
respect to, any Loan Document or any transaction contemplated therein
(collectively, “Other Taxes”). The Swingline Lender may, without any need for
notice, demand or consent from the Borrowers, by making funds available to the
Administrative Agent in the amount equal to any such payment, make a Swing Loan
to the Borrowers in such amount, the proceeds of which shall be used by the
Administrative Agent in whole to make such payment. Within 30 days after the
date of any payment of Taxes or Other Taxes by any Loan Party, the Borrowers
shall furnish to the Administrative Agent, at its address referred to in
Section 11.11, the original or a certified copy of a receipt evidencing payment
thereof.
          (d) Indemnification. Without duplication of any additional amounts
paid pursuant to Section 2.17(b), the Borrowers shall reimburse and indemnify,
within 30 days after receipt of demand therefor (with copy to the Administrative
Agent), each Secured Party for all Taxes and Other Taxes (including any Taxes
and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.17) paid by such Secured Party and all Liabilities with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted, provided that, if the Borrowers determine that any such Taxes or Other
Taxes were not correctly or legally imposed or asserted, the relevant Secured
Party shall allow the Borrowers to contest, the imposition of such Tax upon the
reasonable request of the Borrower Representative and at the Borrowers’ expense.
A certificate of the Secured Party (or of the Administrative Agent on behalf of
such Secured Party) claiming any compensation under this clause (d), setting
forth the amounts to be paid thereunder and delivered to the Borrower
Representative with a copy to the Administrative Agent (together with any
supporting detail reasonably requested by the Borrower Representative), shall be
conclusive, binding and final for all purposes, absence manifest error.
          (e) Mitigation. Any Secured Party claiming any additional amounts
payable pursuant to this Section 2.17 shall use its reasonable efforts
(consistent with its internal policies and Requirements of Law) to change the
jurisdiction of its lending office if such a change would reduce any such
additional amounts (or any similar amount that may thereafter accrue) and would
not, in the sole determination of such Lender, be otherwise disadvantageous to
such Lender.
          (f) Tax Forms. (i) Each Non-U.S. Lender Party that, at any of the
following times, is entitled to an exemption from or reduction of United States
withholding tax shall (w) on or prior to the date such Non-U.S. Lender Party
becomes a “Non-U.S. Lender Party” hereunder, (x) on or prior to the date on
which any such form or certification expires or becomes obsolete, (y) after the
occurrence of any event or change in facts requiring a change in the most recent
form or certification previously delivered by it pursuant to this clause (f) and
(z) from time to time if requested by the Borrower Representative or the
Administrative Agent (or, in the case of a participant or SPV, the relevant
Lender), provide the Administrative Agent and the Borrower Representative (or,
in the case of a participant or SPV, the relevant Lender) with two properly
completed and duly executed originals of each of the following, as applicable:
(A) IRS Form W-
 

62

--------------------------------------------------------------------------------

 

8ECI (claiming exemption from U.S. withholding tax because the income is
effectively connected with a U.S. trade or business), W-8BEN (claiming exemption
from, or a reduction of, U.S. withholding tax under an income tax treaty), as
applicable, or any successor forms thereto, and (B) in the case of a Non-U.S.
Lender Party claiming exemption under Sections 871(h) or 881(c) of the Code,
Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio
interest exemption) or any successor form and a certificate in form and
substance acceptable to the Administrative Agent that such Non-U.S. Lender Party
is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
(2) a “10 percent shareholder” of any Borrower within the meaning of
Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code or (C) any other applicable
document prescribed by the IRS certifying as to the entitlement of such Non-U.S.
Lender Party to such exemption from United States withholding tax or reduced
rate with respect to all payments to be made to such Non-U.S. Lender Party under
the Loan Documents. Unless the Borrower Representative and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments under any Loan Document to or for a Non-U.S. Lender Party are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Loan Parties and the Administrative
Agent shall withhold amounts required to be withheld by applicable Requirements
of Law from such payments at the applicable statutory rate.
          (ii) Each U.S. Lender Party shall (A) on or prior to the date such
U.S. Lender Party becomes a “U.S. Lender Party” hereunder, (B) on or prior to
the date on which any such form or certification expires or becomes obsolete,
(C) after the occurrence of any event or change in facts requiring a change in
the most recent form or certification previously delivered by it pursuant to
this clause (f) and (D) from time to time if requested by the Borrower
Representative or the Administrative Agent (or, in the case of a participant or
SPV, the relevant Lender), provide the Administrative Agent and the Borrower
Representative (or, in the case of a participant or SPV, the relevant Lender)
with two properly completed and duly executed originals of IRS Form W-9
(certifying that such U.S. Lender Party is entitled to an exemption from U.S.
backup withholding tax) or any successor form.
          (iii) Each Lender having sold a participation in any of its
Obligations or identified an SPV as such to the Administrative Agent shall
collect from such participant or SPV the documents described in this clause (f)
and provide them to the Administrative Agent.
          (g) Refunds. If any Secured Party determines that it has received any
refund of any Taxes or Other Taxes from the Governmental Authority to which such
Taxes or Other Taxes were paid as to which it has been indemnified by the
Borrowers or with respect to which the Borrowers have paid additional amounts
pursuant to this Section 2.17, it shall pay over such refund to the Borrowers
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrowers under this Section 2.17, with respect to Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of such Secured
Party and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the
Borrowers, upon request of such Secured Party, agree to repay the amount paid
over the Borrowers (plus any penalties, interest or other charges imposed by the
Governmental Authority to the extent accrued from the date such refund is paid
over to the Borrowers) to such Secured Party, together with any Liabilities
relating to such refund, in the event the Administrative Agent or such Secured
Party is required or requested to repay such
 

63

--------------------------------------------------------------------------------

 

refund to the Governmental Authority. This paragraph shall not be construed to
require any Secured Party to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to Borrowers or
any other Person.
          Section 2.18 Substitution of Lenders. (a) Substitution Right. In the
event that any Lender in any Facility (an “Affected Lender”), (i) makes a claim
under clause (b) (Increased Costs) or (c) (Increased Capital Requirements) of
Section 2.16, (ii) notifies the Borrower Representative pursuant to
Section 2.15(b) (Illegality) that it becomes illegal for such Lender to continue
to fund or make any Eurodollar Rate Loan in such Facility, (iii) makes a claim
for payment pursuant to Section 2.17(a) (Taxes), (iv) becomes a Non-Funding
Lender with respect to such Facility or (v) does not consent to any amendment,
waiver or consent to any Loan Document for which the consent of the Required
Lenders (or the Required Revolving Lenders or Required Term Lenders, as
applicable) is obtained but that requires the consent of other Lenders in such
Facility, the Borrowers may substitute for such Affected Lender in such Facility
any Lender or any Affiliate or Approved Fund of any Lender or any other Person
acceptable (which acceptance shall not be unreasonably withheld or delayed) to
the Administrative Agent (in each case, a “Substitute Lender”).
          (b) Procedure. To substitute such Affected Lender, the Borrower
Representative shall deliver a notice to the Administrative Agent and such
Affected Lender. The effectiveness of such substitution shall be subject to the
delivery to the Administrative Agent by the Substitute Lender of (i) payment for
the account of such Affected Lender, of, to the extent accrued through, and
outstanding on, the effective date for such payment or substitution, all
Obligations owing to such Affected Lender with respect to such Facility
(including those that will be owed because of such payment and all Obligations
that would be owed to such Lender if it was solely a Lender in such Facility)
(ii) if such Affected Lender is an L/C Issuer, cash collateral or one or more
backstop letters of credit for the benefit of such L/C Issuer, in form and
substance, and from an issuer, reasonably satisfactory to such L/C Issuer, in
either case in an amount equal to least 102% of the aggregate stated amount of
all outstanding Letters of Credit Issued by such L/C Issuer, (iii) in the case
of a payment in full of the Obligations owing to such Affected Lender in the
Revolving Credit Facility, payment of any amount that, after giving effect to
the termination of the Commitment of such Affected Lender, is required to be
paid pursuant to Section 2.8(e) (Excess Outstandings), (iv) payment of the
assignment fee set forth in Section 11.2(c) and (v) an assumption agreement in
form and substance reasonably satisfactory to the Administrative Agent whereby
the Substitute Lender shall, among other things, agree to be bound by the terms
of the Loan Documents and assume the Commitment of the Affected Lender under
such Facility.
          (c) Effectiveness. Upon satisfaction of the conditions set forth in
clause (b) above, the Administrative Agent shall record such substitution in the
Register, whereupon, in the case of any substitution in any Facility, (i) the
Affected Lender shall sell and be relieved of, and the Substitute Lender shall
purchase and assume, all rights and claims of such Affected Lender under the
Loan Documents with respect to such Facility, except that the Affected Lender
shall retain such rights expressly providing that they survive the repayment of
the Obligations and the termination of the Commitments, (ii) the Substitute
Lender shall become a “Lender” hereunder having a Commitment in such Facility in
the amount of such Affected Lender’s Commitment in such Facility and (iii) the
Affected Lender shall execute and deliver to the Administrative Agent an
Assignment to evidence such substitution and deliver any Note in its possession
with respect to such Facility; provided, however, that the failure of any
Affected Lender to execute any such
 

64

--------------------------------------------------------------------------------

 

Assignment or deliver any such Note shall not render such sale and purchase (or
the corresponding assignment) invalid. If the Affected Lender being replaced
pursuant to this Section 2.18 is an L/C Issuer, such Affected Lender shall cease
to have any further obligation hereunder as an L/C Issuer upon such substitution
becoming effective. If the Affected Lender being replaced pursuant to this
Section 2.18 is the Administrative Agent, the Administrative Agent shall be
deemed to have resigned effective immediately upon such substitution becoming
effective.
Notwithstanding the foregoing, with respect to a Lender that is a Non-Funding
Lender or an Impacted Lender, the Administrative Agent may, but shall not be
obligated to, obtain a replacement Lender and execute an Assignment on behalf of
such Non-Funding Lender or Impacted Lender at any time with three (3) Business
Days’ prior notice to such Lender (unless notice is not practicable under the
circumstances) and cause such Lender’s Loans and Commitments to be sold and
assigned, in whole or in part, at par.
          Section 2.19 Borrower Representative. Each Borrower hereby designates
and appoints MedQuist as its representative and agent on its behalf (the
“Borrower Representative”) for the purposes of issuing Notices of Borrowings,
Notices of Conversion/Continuation, L/C Requests, delivering certificates
(including Compliance Certificates), giving instructions with respect to the
disbursement of the proceeds of the Loans, selecting interest rate options,
giving and receiving all other notices and consents hereunder or under any of
the other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the Loan
Documents. Borrower Representative hereby accepts such appointment.
Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Loan Document from Borrower Representative as a
notice or communication from all Borrowers. Each action authorized to be taken
on behalf of a Borrower by Borrower Representative hereunder shall be deemed for
all purposes to have been taken by such Borrower and shall be binding upon and
enforceable against such Borrower to the same extent as if the same had been
taken directly by such Borrower.
ARTICLE 3
CONDITIONS TO LOANS AND LETTERS OF CREDIT
          Section 3.1 Conditions Precedent to Term Loans. The obligation of each
Lender to make any Term Loan on the Closing Date is subject to the satisfaction
or due waiver of each of the following conditions precedent:
          (a) Certain Documents. The Administrative Agent shall have received on
or prior to the Closing Date each of the following, each dated the Closing Date
unless otherwise agreed by the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent:
          (i) each document required to be delivered pursuant to Section 3.3(a);
          (ii) the Guaranty and Security Agreement, duly executed by Holdings
and each of its Subsidiaries (other than any Excluded Foreign Subsidiaries),
together with (A) copies of UCC, tax, judgment, fixture and Intellectual
Property search reports and of all effective prior filings listed therein,
together with evidence of the
 

65

--------------------------------------------------------------------------------

 

termination of such prior filings other than with respect to Permitted Liens, in
each case as may be reasonably requested by the Administrative Agent, and
(B) all certificates representing all certificated securities (as defined in the
UCC) being pledged pursuant to such Guaranty and Security Agreement and related
undated powers or endorsements duly executed in blank;
          (iii) an irrevocable voting proxy or power of attorney duly executed
by CBay India with respect to all Stock of CBay owned by CBay India, and a
separate agreement between the Administrative Agent, CBay and CBay India with
respect thereto, duly executed by CBay and CBay India;
          (iv) duly executed customary opinions of counsel to the Loan Parties
and CBay India, addressed to the Administrative Agent, the L/C Issuers and the
Lenders and addressing such matters as Administrative Agent may reasonably
request;
          (v) a certificate of a Responsible Officer of the Borrower
Representative to the effect that (A) each condition set forth in
Sections 3.1(c) and (d), Section 3.2(b) and Section 3.3(d) has been satisfied,
(B) each Loan Party is Solvent after giving effect to consummation of the
Related Transactions, and (C) attached thereto are complete and correct copies
of (x) the Related Documents and (y) all consents and authorizations required
pursuant to any material Contractual Obligations with any other Person and all
Permits of, notices to and filings with, any Governmental Authority, in each
case, as are necessary in connection with the consummation of transactions
contemplated by the Loan Documents and the Related Transactions (after giving
effect to the use of proceeds of the Loans on the Closing Date); and
          (vi) payoff letters duly executed and delivered by the Existing Agent
and the holders of the Existing CBay Debt, as applicable.
          (b) Fee and Expenses. There shall have been paid to the Administrative
Agent, for the account of the Administrative Agent, its Related Persons, any L/C
Issuer or any Lender, as the case may be, all fees and all reimbursements of
costs or expenses, in each case due and payable under any Loan Document on or
before the Closing Date and, in the case of the reimbursement of costs and
expenses, invoiced at least one Business Day prior to the Closing Date.
          (c) Related Transactions. Subject only to the funding of the initial
Loans hereunder and the use of proceeds thereof, (i) MedQuist shall have paid to
CBay its portion of the Recapitalization Dividend, (ii) $85,000,000 of
Subordinated Notes shall have been issued and Holdings shall have received the
net proceeds thereof from the purchasers thereof and (iii) all obligations due
under the Existing Credit Agreement, the Existing Subordinated Note and the
Existing CBay Debt will have been repaid in full and the Existing Credit
Agreement, all commitments to extend credit thereunder, the Existing
Subordinated Note and the Existing CBay Debt shall have been terminated, as
evidenced by payoff letters delivered pursuant to Section 3.1(a)(vi).
          (d) Outstanding Indebtedness. After giving effect to the Related
Transactions, the Group Members shall have no Indebtedness as of the Closing
Date other than (i) Indebtedness incurred under this Agreement,
(ii) Indebtedness incurred under the Subordinated Notes and (iii) up to
$11,000,000 of other Indebtedness existing prior the Closing Date and not
 

66

--------------------------------------------------------------------------------

 

incurred in connection with the Related Transactions. There shall not occur as a
result of, and after giving effect to, the consummation of the Related
Transactions, a default (or any event which with the giving of notice or lapse
of time or both will be a default) under any Material Agreement of Holdings and
its Subsidiaries. No Revolving Loans shall be made and no Letters of Credit
shall be Issued on the Closing Date.
          (e) Conditions to Effectiveness. Each condition precedent set forth in
Section 3.3 shall have been met or duly waived as of the Closing Date.
          (f) Closing Date. The Closing Date shall occur either on or prior to
October 15, 2010.
          Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.
The obligation of each Lender on any date to make any Loan and of each L/C
Issuer on any date to Issue any Letter of Credit is subject to the satisfaction
of each of the following conditions precedent:
          (a) Request. The Administrative Agent (and, in the case of any
Issuance, the relevant L/C Issuer) shall have received, to the extent required
by Article II, a written, timely and duly executed and completed Notice of
Borrowing, Swingline Request or, as the case may be, L/C Request.
          (b) Representations and Warranties; No Defaults. The following
statements shall be true on such date, both before and after giving effect to
such Loan or, as applicable, such Issuance: (i) the representations and
warranties set forth in any Loan Document shall be true and correct (A) if such
date is the Closing Date, on and as of such date and (B) otherwise, in all
material respects on and as of such date or, to the extent such representations
and warranties expressly relate to an earlier date, on and as of such earlier
date and (ii) no Default shall be continuing.
The representations and warranties set forth in any Notice of Borrowing,
Swingline Request or L/C Request (or any certificate delivered in connection
therewith) shall be deemed to be made again on and as of the date of the
relevant Loan or Issuance and the acceptance of the proceeds thereof or of the
delivery of the relevant Letter of Credit.
          Section 3.3 Conditions Precedent to Effectiveness of this Agreement.
The effectiveness of this Agreement is subject to the satisfaction or due waiver
of each of the following conditions precedent:
          (a) Certain Documents. The Administrative Agent shall have received on
or prior to the Signing Date each of the following, each dated the Signing Date
unless otherwise agreed by the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent:
          (i) this Agreement duly executed by Holdings and the Borrowers and,
for the account of each Lender having requested the same by notice to the
Administrative Agent received at least three (3) Business Days prior to the
Closing Date, Notes in each applicable Facility conforming to the requirements
set forth in Section 2.14(e);
 

67

--------------------------------------------------------------------------------

 

          (ii) a copy of each Constituent Document of each Loan Party that is on
file with any Governmental Authority in its jurisdiction of organization,
certified as of a recent date by such Governmental Authority, together with, if
applicable, certificates attesting to the good standing of such Loan Party in
(x) such jurisdiction and (y) each other jurisdiction where such Loan Party is
qualified to do business as a foreign entity and where such qualification is
necessary for the conduct of such Loan Party’s business (and, if appropriate in
any such jurisdiction, related tax certificates) except where the failure to so
qualify would not reasonably be expected to have a Material Adverse Effect;
          (iii) a certificate of the secretary or other officer of each Loan
Party in charge of maintaining books and records of such Loan Party certifying
as to (A) the names and signatures of each officer of such Loan Party that is
authorized to and that will execute and deliver any Loan Document on the Signing
Date or Closing Date, (B) the Constituent Documents of such Loan Party attached
to such certificate are complete and correct copies of such Constituent
Documents as in effect on the date of such certification (or, for any such
Constituent Document delivered pursuant to clause (iv) above, that there have
been no changes from such Constituent Document so delivered) and (C) the
resolutions of such Loan Party’s board of directors or other appropriate
governing body approving and authorizing the execution, delivery and performance
of each Loan Document to which such Loan Party is a party;
          (iv) the Subordination Agreement, duly executed by the initial holders
of the Subordinated Notes, Holdings and the Borrowers;
          (v) (x) interim Consolidated unaudited monthly Financial Statements of
Holdings and its Subsidiaries for each fiscal month ended after June 30, 2010
and on or prior to 45 days before the Closing Date, each in the form of the
monthly Financial Statements as of June 30, 2010 provided to the Administrative
Agent prior to the Closing Date, (y) a pro forma estimated Consolidated balance
sheet of Holdings and its Subsidiaries at the Closing Date after giving effect
to the Related Transactions and (z) Holdings’ business plan which shall include
a financial forecast on a quarterly basis for the first twelve months after the
Closing Date and on an annual basis thereafter through 2015 prepared by
Holdings’ management; and
          (vi) insurance certificates naming the Administrative Agent as
additional insured or loss payee, as required by Section 7.5.
          (b) Escrow. Each of the documents, instruments and certificates
referenced in Section 3.1(a) (other than the opinions under clause (iv) and
payoff letters under clause (vi) thereof) shall have been executed and delivered
into escrow on terms and conditions reasonably satisfactory to the
Administrative Agent.
          (c) Representations and Warranties; No Defaults. After giving pro
forma effect to the Related Transactions as if they had occurred on the Signing
Date, the representations and warranties set forth in any Loan Document shall be
true and correct on and as of such date as if the Signing Date were the Closing
Date and no Default shall be continuing.
          (d) Minimum EBITDA; Maximum Leverage. Consolidated EBITDA of Holdings
for the twelve fiscal month period ended on July 31, 2010 shall be no less than
$85,000,000. After giving effect to the Related Transactions, the ratio of
Consolidated Total
 

68

--------------------------------------------------------------------------------

 

Debt of Holdings as of the Closing Date to Consolidated EBITDA of Holdings for
the twelve fiscal month period ended on July 31, 2010 shall not exceed 3.35 to
1.00, and the ratio of Consolidated Senior Debt of Holdings as of the Closing
Date to Consolidated EBITDA of Holdings for the twelve fiscal month period ended
on July 31, 2010 shall not exceed 2.35 to 1.00.
          (e) Declaration of Recapitalization Dividend. Simultaneously with this
Agreement becoming effective, MedQuist shall have (i) declared the payment of
the Recapitalization Dividend conditioned upon the funding of the Term Loans and
the receipt of the proceeds from the issuance of the Subordinated Notes and
(ii) have otherwise taken such other actions as are necessary in order to be
permitted under applicable NASDAQ rules and regulations to pay the
Recapitalization Dividend on the Closing Date.
          Section 3.4 Determinations of Initial Borrowing Conditions. For
purposes of determining compliance with the conditions specified in Sections 3.1
and 3.3, each Lender shall be deemed to be satisfied with each document and each
other matter required to be satisfactory to such Lender unless, prior to the
Closing Date or Signing Date, as applicable, the Administrative Agent receives
notice from such Lender specifying such Lender’s objections and such Lender has
not made available its Pro Rata Share of any Borrowing scheduled to be made on
the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
          To induce the Lenders, the L/C Issuers and the Administrative Agent to
enter into the Loan Documents, Holdings and each Borrower represents and
warrants to each of them each of the following on and as of each date applicable
pursuant to Section 3:
          Section 4.1 Corporate Existence; Compliance with Law. Each Group
Member (a) is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its organization, (b) is duly
qualified to do business as a foreign entity and in good standing under the laws
of each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, (c) has all requisite
corporate or similar power and authority to own, and operate its property and to
conduct its business as now or currently proposed to be conducted, (d) is in
compliance with all applicable Requirements of Law except where the failure to
be in compliance would not reasonably be expected to have a Material Adverse
Effect and (e) has all necessary Permits from or by, has made all necessary
filings with, and has given all necessary notices to, each Governmental
Authority having jurisdiction, to the extent required for such ownership,
operation or conduct of business, except where the failure to obtain such
Permits, make such filings or give such notices would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; provided, however,
that the representations and warranties under clause (a) and (b) above with
respect to the Excluded Foreign Subsidiaries are limited to the knowledge of the
Loan Parties.
          Section 4.2 Loan and Related Documents. (a) Power and Authority. The
execution, delivery and performance by each Loan Party of the Loan Documents and
Related Documents to which it is a party and the consummation of the Related
Transactions and other transactions contemplated therein (i) are within such
Loan Party’s corporate or similar powers and, at the time of execution thereof,
have been duly authorized by all necessary corporate and
 

69

--------------------------------------------------------------------------------

 

similar action, (ii) do not (A) contravene such Loan Party’s Constituent
Documents, (B) violate any applicable material Requirement of Law in any
material respect, (C) conflict with, contravene, constitute a default or breach
under, or result in or permit the termination or acceleration of, any material
Contractual Obligation of any Group Member (including other Related Documents or
Loan Documents) other than those that would not, in the aggregate, have a
Material Adverse Effect, (D) do not materially adversely affect any Permit of
such Loan Party other than those that would not, in the aggregate, have a
Material Adverse Effect or (E) result in the imposition of any Lien (other than
a Permitted Lien) upon any property of any Group Member and (iii) do not require
any Permit of, or filing with, any Governmental Authority or any consent of, or
notice to, any Person, other than (A) with respect to the Loan Documents, the
filings required to perfect the Liens created by the Loan Documents, (B) those
that have been, or will be prior to the Closing Date, obtained or made, copies
of which have been, or will be prior to the Closing Date, delivered to the
Administrative Agent, and each of which on the Closing Date will be in full
force and effect and (C) except with respect to the borrowing of the Loans, the
guarantying of the Obligations and the granting of Liens under the Loan
Documents, those which, if not obtained or made, would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
          (b) Due Execution and Delivery. Each Loan Document and Related
Document has been duly executed and delivered to the other parties thereto by
each Loan Party party thereto, is the legal, valid and binding obligation of
such Loan Party and is enforceable against such Loan Party in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization or moratorium or similar laws affecting the rights or remedies of
creditors generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
          (c) Subordinated Note. The Obligations constitute “Senior Debt” or any
similar concept under and as defined in the Subordination Agreement. No other
Indebtedness qualifies as “Senior Debt” or any similar concept under the
Subordination Agreement.
          Section 4.3 Ownership of Group Members. Set forth on Schedule 4.3 is a
complete and accurate list showing, as of the Closing Date, for each Group
Member other than Holdings, its jurisdiction of organization, the number of
shares of each class of Stock outstanding on the Closing Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by any Borrower or Holdings. As of the Closing Date, all outstanding
Stock of each Group Member has been validly issued, is fully paid and
non-assessable (to the extent applicable) and, except in the case of Holdings,
is owned beneficially and of record by a Group Member free and clear of all
Liens other than Permitted Liens. As of the Closing Date, there are no Stock
Equivalents with respect to the Stock of any Group Member (other than Holdings).
As of the Closing Date, there are no Contractual Obligations or other
understandings to which any Group Member is a party with respect to (including
any restriction on) the issuance, voting, Sale or pledge of any Stock or Stock
Equivalent of any Group Member.
          Section 4.4 Financial Statements. (a) Each of (i) the audited
Consolidated balance sheet of Holdings as at December 31, 2009, and the related
Consolidated statements of income, retained earnings and cash flows of Holdings
for the Fiscal Year then ended, certified by KPMG LLP, and (ii) subject to the
absence of footnote disclosure and normal year-end audit adjustments, the
unaudited Consolidated balance sheets of Holdings as at July 31, 2010 and the
related Consolidated statements of income, retained earnings and cash flows of
Holdings for the seven (7) months then ended, copies of each of which have been
furnished to the Administrative
 

70

--------------------------------------------------------------------------------

 

Agent, fairly present in all material respects the Consolidated financial
position, results of operations and cash flow of the Group Members as at the
dates indicated and for the periods indicated in accordance with GAAP.
          (b) On the Closing Date, (i) none of Holdings or its Subsidiaries has
any material liability or obligation (including Indebtedness, Guaranty
Obligations, contingent liabilities and liabilities for taxes, long-term leases
and unusual forward or long-term commitments) that is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto and
which is otherwise prohibited by this Agreement and (ii) since the date of the
unaudited Financial Statements referenced in clause (a)(ii) above, there has
been no Sale of any material property of Holdings or its Subsidiaries and no
acquisition of any material property.
          (c) The Initial Projections have been prepared by Holdings in light of
the past operations of the business of Holdings and its Subsidiaries and reflect
projections for the five-year period beginning on July 1, 2010 on a quarterly
basis through June 30, 2011 and on a year-by-year basis thereafter. As of the
Closing Date, the Initial Projections have been prepared in good faith based
upon assumptions believed by the preparer thereof to be reasonable, it being
understood and agreed that financial projections are not a guarantee of
financial performance and actual results may differ from financial projections
and such differences may be material.
          (d) The unaudited Consolidated balance sheet of Holdings (the “Pro
Forma Balance Sheet”) delivered to the Administrative Agent prior to the date
hereof, has been prepared as of July 31, 2010 and reflects as of such date, on a
Pro Forma Basis for the Related Transactions the Consolidated financial
condition of Holdings.
          Section 4.5 Material Adverse Effect. Since December 31, 2009, no
Material Adverse Effect has occurred.
          Section 4.6 Solvency. As of the Closing Date, both before and after
giving effect to the Related Transactions, each Loan Party is Solvent. On any
date after the Closing Date, both before and after giving effect to the Loans
and Letters of Credit to be made or Issued on such date and the use of proceeds
thereof, the Loan Parties taken as a whole are Solvent.
          Section 4.7 Litigation. There are no pending (or, to the knowledge of
any Group Member, threatened in writing) actions, investigations, suits,
proceedings, audits or claims affecting any Group Member with, by or before any
Governmental Authority (x) that would reasonably be expected to have a Material
Adverse Effect or (y) that involve the Loan Documents, the Related Documents or
the Related Transactions.
          Section 4.8 Taxes. Except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, all
Federal, state, local and foreign tax returns, reports and statements
(collectively, the “Tax Returns”) required to be filed by any Group Member have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct, and all taxes, charges and other impositions reflected therein or
otherwise due and payable have been paid prior to the date on which any
Liability may be added thereto for non-payment thereof, in each case except with
respect to matters contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
appropriate Group Member in accordance with GAAP. As of the Closing Date, no
material Tax Return is under audit or examination by any Governmental Authority
and no notice of such an
 

71

--------------------------------------------------------------------------------

 

audit or examination or any assertion of any material claim for Taxes has been
given or made by any Governmental Authority. As of the Closing Date, proper and
accurate amounts have been withheld by each Group Member from their respective
employees for all periods in material compliance with the tax, social security
and unemployment withholding provisions of applicable Requirements of Law and
such withholdings have been timely paid to the respective Governmental
Authorities. No Group Member has participated in a “listed transaction” within
the meaning of Treasury Regulation Section 1.6011-4(b) or has been a member of
an affiliated, combined or unitary group other than the group of which a Group
Member is or was the common parent.
          Section 4.9 Margin Regulations. No Borrower is engaged in the business
of extending credit for the purpose of, and no proceeds of any Loan or other
extensions of credit hereunder will be used for the purpose of, buying or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve
Board) or extending credit to others for the purpose of purchasing or carrying
any such margin stock, in each case in contravention of Regulation T, U or X of
the Federal Reserve Board.
          Section 4.10 No Defaults. No Group Member is in default under or with
respect to any Contractual Obligation of any Group Member, other than those that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
          Section 4.11 Investment Company Act. No Group Member is an “investment
company” as defined in, or subject to regulation or restrictions under, the
Investment Company Act of 1940, as amended and the rules and regulations
promulgated thereunder.
          Section 4.12 Labor Matters. There are no strikes, work stoppages,
slowdowns or lockouts existing, pending (or, to the knowledge of any Group
Member, threatened) against or involving any Group Member, except, for those
that would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.12, as of the Closing Date,
(a) there is no collective bargaining or similar agreement with any union, labor
organization, works council or similar representative covering any employee of
any Group Member, (b) no petition for certification or election of any such
representative is existing or pending with respect to any employee of any Group
Member and (c) no such representative has sought certification or recognition
with respect to any employee of any Group Member.
          Section 4.13 ERISA. Each Benefit Plan, and each trust thereunder,
intended to qualify for tax exempt status under Section 401 or 501 of the Code
(or other Requirements of Law) has received a favorable determination letter
from the IRS (or other applicable Governmental Authority), to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code covering all
applicable tax law changes, with respect to such qualification, and nothing has
occurred since the date of such determination that would adversely affect such
determination. Except for those that would not, in the aggregate, be reasonably
expected to result in a Material Adverse Effect, (x) each Benefit Plan is in
compliance in form and operation with its terms and with applicable provisions
of ERISA, the Code and other Requirements of Law, (y) there are no existing or
pending (or to the knowledge of any Group Member, threatened) claims (other than
routine claims for benefits in the normal course), sanctions, actions, lawsuits
or other proceedings or investigation involving any Benefit Plan to which any
Group Member has incurred or otherwise has or could have an obligation or any
Liability and (z) no ERISA Event has occurred or is reasonably expected to
occur. On the Closing Date, no ERISA Event has occurred in connection with which
obligations and liabilities (contingent or otherwise) remain
 

72

--------------------------------------------------------------------------------

 

outstanding. No Benefit Plan and no other employee benefit plan maintained,
sponsored or contributed to by any Loan Party or ERISA Affiliate is a defined
benefit pension plan or is subject to the minimum funding requirements of
Section 412 of the Code or Title IV of ERISA. No Loan Party or ERISA Affiliate
has any obligation to contribute to any Multiemployer Plan, or has within any of
the five calendar years immediately preceding the date this assurance is given,
made or accrued an obligation to make contributions to any Multiemployer Plan.
Each Loan Party and each ERISA Affiliate have made all material contributions to
or under each Benefit Plan and Multiemployer Plan required by law within the
applicable time limits prescribed thereby, the terms of such Benefit Plan or
Multiemployer Plan, respectively, or any contract or agreement requiring
contributions to a Benefit Plan or Multiemployer Plan, except where any failure
to comply, individually or in the aggregate, would not reasonably be expected to
result in a material liability. There exists no Unfunded Pension Liability with
respect to any Title IV Plan, except as would not reasonably be expected to
result in a material liability.
          Section 4.14 Environmental Matters. Except as set forth on
Schedule 4.14, (a) the operations of each Group Member are and have been in
compliance with all applicable Environmental Laws, including obtaining,
maintaining and complying with all Permits required by any applicable
Environmental Law, other than non-compliances that, in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, (b) no Group
Member is party to, and no Group Member and no real property currently (or to
the knowledge of any Group Member previously) owned, leased, subleased, operated
or otherwise occupied by or for any Group Member (but solely to the knowledge of
the Group Members with respect to any real property neither occupied by nor
owned by any Group Member) is subject to or the subject of, any Contractual
Obligation or any pending (or, to the knowledge of any Group Member, threatened)
order, action, investigation, suit, proceeding, audit, claim, demand, dispute or
notice of violation or of potential liability or similar notice, in each
instance under or pursuant to any Environmental Law, other than those that, in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect, (c) no Group Member has caused or allowed a Release of Hazardous
Materials at, to or from any real property of any Group Member and each such
real property is free of contamination by any Hazardous Materials except for
such Release or contamination that would not reasonably be expected to result,
in the aggregate, in a Material Adverse Effect, (d) no Group Member has received
any information request or notice of potential responsibility under CERCLA or
similar Environmental Laws, that, in the aggregate, would be reasonably expected
to have a Material Adverse Effect and (e) each Group Member has made available
to the Administrative Agent copies of all existing material environmental
reports, reviews and audits and all documents containing material information
pertaining to actual or potential material Environmental Liabilities, in each
case to the extent such reports, reviews, audits and documents are in their
possession, custody or control.
          Section 4.15 Intellectual Property. Each Group Member owns or licenses
all Intellectual Property that is necessary for the operations of its businesses
except as, in the aggregate, would not be reasonably expected to have a Material
Adverse Effect. To the knowledge of each Group Member, (a) the conduct and
operations of the businesses of each Group Member does not infringe,
misappropriate or violate any Intellectual Property owned by any other Person
and (b) no other Person has contested any right, title or interest of any Group
Member in, or relating to, any Intellectual Property, other than, in each case,
as would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
 

73

--------------------------------------------------------------------------------

 

          Section 4.16 Title; Real Property. Each Group Member has good and
valid fee simple title to all owned real property and valid leasehold interests
in all leased real property, and owns or leases all personal property necessary
for the conduct of its business except as would not reasonably be expected to
have a Material Adverse Effect, and none of such property is subject to any Lien
except Permitted Liens. As of the Closing Date, no Group Member owns any fee
simple interest in any real Property.
          Section 4.17 Full Disclosure. All of the representations or warranties
made by any Loan Party or any of their respective Subsidiaries in the Loan
Documents as of the date such representations and warranties were made or deemed
made, and all of the information other than the Projections and general economic
or specific industry information that has been made available to the Secured
Parties by or on behalf of any Group Member or any of their respective
Subsidiaries (including the information contained in any Financial Statement or
Disclosure Document), when taken as a whole and after giving effect to all
supplements previously made thereto, was, when furnished, complete and correct
in all material respects and did not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements were made. All projections that
are part of such information (including those set forth in any Projections
delivered subsequent to the Signing Date) have been prepared in good faith based
upon assumptions believed by the preparer thereof to be reasonable at the time
made and at the time such projections are made available (it being understood
and agreed that financial projections are not a guarantee of financial
performance and actual results may differ from financial projections and such
differences may be material).
          Section 4.18 Anti-Terrorism Laws. No Group Member and, to the
knowledge of each Group Member, no joint venture or subsidiary thereof is in
violation in any material respects of any United States Requirements of Law
relating to terrorism, sanctions or money laundering, including the United
States Executive Order No. 13224 on Terrorist Financing and the Patriot Act.
          Section 4.19 Material Agreements. Except for matters which, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, each Material Agreement (a) is in full force and
effect, unless it has expired at the end of its stated term or been replaced by
an agreement or agreements not materially less favorable to the Loan Parties
than the Material Agreement which it replaces and (b) has not been amended or
modified (other than amendments or modifications permitted by Section 8.11(c)).
          Section 4.20 Health Care Matters. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Group
Member, and any Person acting on their behalf, is in compliance in all respects
with all Health Care Laws applicable to it, its products and its properties or
other assets or its business or operation.
          Section 4.21 Health Care Permits. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, (a) each
Group Member, and any Person acting on their behalf, has in effect all material
health care Permits necessary for it to own, lease or operate its properties and
other assets and to carry on its business and operations as presently conducted,
(b) all such Permits are in full force and effect and there exists no default
under, or violation of, any such Permit, (c) no condition exists or event has
occurred which, in itself or with the giving of notice or lapse of time or both,
has resulted or would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such Permit and (d) there is
 

74

--------------------------------------------------------------------------------

 

no material claim that any such Permit is not in full force and effect, and no
presently existing circumstance exists or event has occurred which could
reasonably be expected to result in a material violation of the Health Care
Laws. As of the Closing Date, Schedule 4.21 sets forth an accurate, complete and
current list of all material health care Permits with respect to the business of
each Group Member.
          Section 4.22 Exclusion. Except as would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, none of the Group
Members, nor any Person acting on behalf of any Group Member has been, or has
been threatened to be, (i) excluded from any Governmental Payor Program pursuant
to 42 U.S.C. § 1320a-7b and related regulations, (ii) “suspended” or “debarred”
from selling products to the U.S. government or its agencies pursuant to the
Federal Acquisition Regulation, relating to debarment and suspension applicable
to federal government agencies generally (42 C.F.R. Subpart 9.4), or other
applicable laws or regulations, (iii) debarred, disqualified, suspended or
excluded from participation in Medicare, Medicaid or any other health care
program or is listed on the General Services Administration list of excluded
parties, nor is any such debarment, disqualification, suspension or exclusion
threatened or pending, or (iv) made a party to any other action by any
Governmental Authority that may prohibit it from selling products or providing
services to any governmental or other purchaser pursuant to any federal, state
or local laws or regulations.
          Section 4.23 HIPAA. Except as would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect, each Group Member is in
compliance with all applicable federal, state and local laws and regulations
regarding the privacy and security of health information and electronic
transactions, including HIPAA, and the provisions of all business associate
agreements (as such term is defined by HIPAA) to which it is a party and has
implemented adequate policies, procedures and training designed to assure
continued compliance and to detect non-compliance. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, to the
extent applicable to any Loan Party and for so long as (1) any Loan Party is a
“covered entity” as defined in 45 C.F.R. § 160.103, (2) any Loan Party is a
“business associate” as defined in 45 C.F.R. § 160.103, (3) any Loan Party is
subject to or covered by the HIPAA Administrative Requirements codified at 45
C.F.R. Parts 160 & 162 (the “Transactions Rule”) and/or the HIPAA Security and
Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the “Privacy and
Security Rules”), and/or (4) any Loan Party sponsors any “group health plans” as
defined in 45 C.F.R. § 160.103, such Loan Party has: (i) completed thorough and
detailed surveys, audits, inventories, reviews, analyses and/or assessments,
including risk assessments, (collectively “Assessments”) of all material areas
of its business and operations subject to HIPAA and/or that could be materially
and adversely affected by the failure of such Loan Party, or any Person acting
on behalf of any Loan Party, as the case may be, to the extent these Assessments
are appropriate or required for such Loan Party to be in compliance with HIPAA;
(ii) developed a detailed plan and time line for becoming in compliance with
HIPAA (a “HIPAA Compliance Plan”); and (iii) implemented those provisions of its
HIPAA Compliance Plan necessary to ensure that such Loan Party is in compliance
with HIPAA.
ARTICLE 5
FINANCIAL COVENANTS
          Each of Holdings and each Borrower agrees with the Lenders, the L/C
Issuers and the Administrative Agent to each of the following, as long as any
Obligation (other than any Contingent Loan Document Obligations) or any
Commitment remains outstanding:
 

75

--------------------------------------------------------------------------------

 

          Section 5.1 Maximum Consolidated Senior Leverage Ratio. Holdings shall
not have, on the last day of each Fiscal Quarter set forth below, a Consolidated
Senior Leverage Ratio greater than the maximum ratio set forth opposite such
Fiscal Quarter:

          MAXIMUM CONSOLIDATED FISCAL QUARTER ENDING   SENIOR LEVERAGE RATIO
September 30, 2010   3.00:1.00 December 31, 2010   2.75:1.00 March 31, 2011  
2.60:1.00 June 30, 2011   2.35:1.00 September 30, 2011   2.15:1.00 December 31,
2011   2.15:1.00 March 31, 2012   2.00:1.00 June 30, 2012   1.70:1.00
September 30, 2012   1.60:1.00 December 31, 2012   1.50:1.00 March 31, 2013  
1.40:1.00 June 30, 2013   1.20:1.00 September 30, 2013   1.10:1.00 December 31,
2013   1.10:1.00 March 31, 2014   1.10:1.00 June 30, 2014 and thereafter  
1.00:1.00

          Section 5.2 Maximum Consolidated Total Leverage Ratio. Holdings shall
not have, on the last day of each Fiscal Quarter set forth below, a Consolidated
Total Leverage Ratio greater than the maximum ratio set forth opposite such
Fiscal Quarter:

          MAXIMUM CONSOLIDATED FISCAL QUARTER ENDING   TOTAL LEVERAGE RATIO
September 30, 2010   4.00:1.00 December 31, 2010   4.00:1.00 March 31, 2011  
3.75:1.00 June 30, 2011   3.50:1.00 September 30, 2011   3.25:1.00 December 31,
2011   3.00:1.00 March 31, 2012   3.00:1.00 June 30, 2012   2.70:1.00

 

76

--------------------------------------------------------------------------------

 

          MAXIMUM CONSOLIDATED FISCAL QUARTER ENDING   TOTAL LEVERAGE RATIO
September 30, 2012   2.60:1.00 December 31, 2012   2.50:1.00 March 31, 2013  
2.40:1.00 June 30, 2013   2.20:1.00 September 30, 2013   2.10:1.00 December 31,
2013   2.00:1.00 March 31, 2014   2.00:1.00 June 30, 2014   1.75:1.00
September 30, 2014   1.70:1.00 December 31, 2014   1.65:1.00 March 31, 2015  
1.60:1.00 June 30, 2015 and thereafter   1.50:1.00

          Section 5.3 Minimum Consolidated Interest Coverage Ratio. Holdings
shall not have, on the last day of each Fiscal Quarter set forth below, a
Consolidated Interest Coverage Ratio for the four (4) Fiscal Quarter period
ending on such day less than the minimum ratio set forth opposite such Fiscal
Quarter:

      FISCAL QUARTER ENDING   MINIMUM CONSOLIDATED
INTEREST COVERAGE RATIO September 30, 2010   2.75:1.00 December 31, 2010  
2.75:1.00 March 31, 2011   2.75:1.00 June 30, 2011   3.00:1.00 September 30,
2011   3.25:1.00 December 31, 2011   3.25:1.00 March 31, 2012   3.50:1.00
June 30, 2012   3.50:1.00 September 30, 2012   3.75:1.00 December 31, 2012  
3.75:1.00 March 31, 2013 and thereafter   4.00:1.00

 

77

--------------------------------------------------------------------------------

 

ARTICLE 6
REPORTING COVENANTS
          Each of Holdings and each Borrower agrees with the Lenders, the L/C
Issuers and the Administrative Agent to each of the following, as long as any
Obligation (other than any Contingent Loan Document Obligations) or any
Commitment remains outstanding:
          Section 6.1 Financial Statements. The Borrowers shall deliver to the
Administrative Agent (who will distribute the same to the Lenders promptly upon
its receipt thereof) each of the following in a format reasonably satisfactory
to the Administrative Agent:
          (a) Monthly Reports. Within 30 days after the end of each month, the
internal Consolidated unaudited balance sheet of each of MedQuist and CBay as of
the close of such fiscal month and related Consolidated statements of income and
cash flow for such fiscal month and that portion of the Fiscal Year ending as of
the close of such fiscal month, setting forth in comparative form the figures
for the corresponding period in the prior Fiscal Year (after the first
anniversary of the Closing Date) prepared for management and consistent with
past practice.
          (b) Quarterly Reports. As soon as available, and in any event within
45 days after the end of each Fiscal Quarter of each Fiscal Year (i) ending
before the MedQuist Consolidation Date, the Consolidated unaudited balance sheet
of Holdings, the Consolidated unaudited balance sheet of MedQuist and all
eliminations necessary to reconcile such balance sheets and (ii) ending on or
after the MedQuist Consolidation Date, the Consolidated unaudited balance sheet
of Holdings, in each case as of the close of such Fiscal Quarter, and including
related Consolidated statements of income and cash flow for such Fiscal Quarter
and that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter, setting forth in comparative form (x) the figures for the corresponding
period in the prior Fiscal Year (after the first anniversary of the Closing
Date) and (y) the figures for the corresponding period set forth in the most
recent corresponding Projections received by the Administrative Agent pursuant
to Section 6.1(f), in each case certified by a Responsible Officer of the
Borrower Representative as fairly presenting in all material respects the
Consolidated financial position, results of operations and cash flow of Holdings
and/or MedQuist, as applicable, as at the dates indicated and for the periods
indicated in accordance with GAAP (subject to the absence of footnote disclosure
and normal year-end audit adjustments).
          (c) Annual Reports. As soon as available, and in any event within
90 days after the end of each Fiscal Year (i) ending before the MedQuist
Consolidation Date, the Consolidated balance sheet of Holdings and the
Consolidated balance sheet of MedQuist and (ii) ending on or after the MedQuist
Consolidation Date, the Consolidated balance sheet of Holdings, in each case as
of the end of such year and including related Consolidated statements of income,
stockholders’ equity and cash flow for such Fiscal Year, each prepared in
accordance with GAAP, together with an opinion of the Group Members’ Accountants
that such Consolidated Financial Statements fairly present in all material
respects the Consolidated financial position, results of operations and cash
flow of Holdings and/or MedQuist, as applicable, as at the dates indicated and
for the periods indicated therein in accordance with GAAP without qualification
as to the scope of the audit or as to going concern or other similar
qualification, it being understood that the Borrowers may satisfy the
requirements of this clause (c) by delivery, in the manner provided in Section
11.11(a), of their annual reports on Form 10-K (or any successor form), as filed
with the Securities and Exchange Commission.
 

78

--------------------------------------------------------------------------------

 

          (d) Compliance Certificate. Together with each delivery of any
Financial Statement pursuant to clause (b) or (c) above, a Compliance
Certificate duly executed by a Responsible Officer of the Borrower
Representative that, among other things, (i) if delivered together with any
Financial Statement pursuant to clause (c) above, includes the calculations used
in determining Excess Cash Flow, (ii) if delivered together with any Financial
Statements pursuant to clauses (b) or (c) above, (A) demonstrates compliance
with each financial covenant contained in Article 5 and (B) contains a detailed
calculation of Additional Available Cash as of the date of such Financial
Statements including any reduction thereof described in clauses (v) and (vi) of
the definition thereof, and (iii) states that no Default is continuing as of the
date of delivery of such Compliance Certificate or, if a Default is continuing,
states the nature thereof and the action that the Borrowers propose to take with
respect thereto.
          (e) Corporate Chart and Other Collateral Updates. Together with each
delivery of any Financial Statement pursuant to clause (c) above, a certificate
by a Responsible Officer of the Borrower Representative that (i) the Corporate
Chart attached thereto (or the last Corporate Chart delivered pursuant to this
clause (e)) is correct and complete as of the date of such Compliance
Certificate, (ii) there has been no material change in the information provided
in Schedule 3, Schedule 4, Schedule 5 or Schedule 6 to the Guaranty and Security
Agreement since the date of the execution of this Agreement or the last
Compliance Certificate delivered pursuant to this clause (e), as applicable, or,
if there has been a material change in such information, complete and correct
supplements to such Schedules have been delivered to the Administrative Agent or
are attached to such certificate, and (iii) if any term of any Constituent
Document of any Group Member has been modified on or prior to the date of
delivery of such Compliance Certificate in accordance with Section 8.11,
complete and correct copies of all documents evidencing such modification have
been delivered to the Administrative Agent or are attached to such certificate.
          (f) Additional Projections. As soon as available and in any event not
later than 30 days after the beginning of each Fiscal Year, (i) forecasts
prepared by management of the Borrowers including in such forecasts (A) a
projected Consolidated balance sheet, income statement and statement of cash
flows and (B) a statement of all of the material assumptions on which such
forecasts are based for each Fiscal Quarter in such Fiscal Year containing
substantially the same type of financial information as that contained in the
Initial Projections.
          (g) Audit Reports, Management Letters, Etc. Together with each
delivery of any Financial Statement for any Fiscal Year pursuant to clause (c)
above, copies of each management letter, audit report or similar letter or
report received by any Group Member from any independent registered certified
public accountant (including the Group Members’ Accountants) in connection with
such Financial Statements or any audit thereof, each certified to be complete
and correct copies by a Responsible Officer of the Borrower Representative as
part of the Compliance Certificate delivered in connection with such Financial
Statements.
          (h) Insurance. Together with each delivery of any Financial Statement
for any Fiscal Year pursuant to clause (c) above, each in form and substance
reasonably satisfactory to the Administrative Agent and certified as complete
and correct by a Responsible Officer of the Borrower Representative as part of
the Compliance Certificate delivered in connection with such Financial
Statements, a summary of all material insurance coverage maintained as of the
date thereof by any Group Member.
 

79

--------------------------------------------------------------------------------

 

          (i) Government Contracts. At the time of delivery of each of the
annual Financial Statements delivered pursuant to Section 6.1(c), (i) a listing
of government contracts of Borrower subject to the Federal Assignment of Claims
Act of 1940, and (ii) a list of any applications for the registration of any
Patent, Trademark or Copyright filed by any Loan Party with the United States
Patent and Trademark Office, the United States Copyright Officer or any similar
office or agency in the prior Fiscal Quarter.
          (j) Other. Reasonably promptly after request, such documents and
information with respect to the business, property, condition (financial or
otherwise), legal, financial or corporate or similar affairs or operations of
any Loan Party (and during the continuance of a Default, any Group Member) as
the Administrative Agent or such Lender through the Administrative Agent may
from time to time reasonably request.
          Section 6.2 Other Events. The Borrower Representative shall give the
Administrative Agent notice (who will distribute the same to the Lenders
promptly upon its receipt thereof) of each of the following (which may be made
by telephone if promptly confirmed in writing) promptly after any Responsible
Officer of any Loan Party knows:
          (a) (i) the occurrence or existence of any Default or Event of Default
and (ii) any event that such Responsible Officer believes would reasonably be
expected to have a Material Adverse Effect, specifying, in each case, the nature
and anticipated effect thereof and any action proposed to be taken in connection
therewith;
          (b) any event (other than any event involving loss or damage to
property) reasonably expected to result in a mandatory payment of the
Obligations pursuant to Section 2.8, stating the material terms and conditions
of such transaction and estimating the Net Cash Proceeds thereof;
          (c) the commencement of any action, investigation, suit or proceeding
by or before any Governmental Authority brought against any Group Member that
would reasonably be expected to have a Material Adverse Effect;
          (d) notice of any material civil or criminal investigation or the
commencement of proceedings before any Governmental Authority alleging a
material violation of any Health Care Laws;
          (e) the acquisition of any real property with a fair market value in
excess of $2,000,000 owned by any Loan Party;
          (f) any default under (after the expiration of any cure period with
respect to such default and after giving effect to any written waiver of such
default) any Subordinated Note Document; and
          (g) any material default under any Material Agreement (after the
expiration of any cure period with respect to such default and after giving
effect to any written waiver of such default) or any termination of any Material
Agreement, other than a termination in connection with the replacement thereof
with an agreement or agreements not materially less favorable to the Loan
Parties.
 

80

--------------------------------------------------------------------------------

 

Each notice pursuant to this Section shall be in electronic form accompanied by
a statement by a Responsible Officer on behalf of the Borrower Representative
setting forth details of the occurrence referred to therein, and stating what
action the Borrowers or other Person proposes to take with respect thereto and
at what time.
          Section 6.3 Copies of Notices and Reports. The Borrower Representative
shall promptly deliver to the Administrative Agent (who will distribute the same
to the Lenders promptly upon its receipt thereof) copies of each of the
following: (a) all reports that Holdings transmits to its security holders
generally, (b) all periodic reports and reports on Form 8-K that any Group
Member files with the Securities and Exchange Commission and (c) all material
documents transmitted or received pursuant to, or in connection with, any
Related Document.
          Section 6.4 Labor Matters. The Borrower Representative shall give the
Administrative Agent notice (who will distribute the same to the Lenders
promptly upon its receipt thereof) of each of the following (which may be made
by telephone if promptly confirmed in writing), promptly after, and in any event
within 30 days after any Responsible Officer of any Loan Party knows: (a) the
commencement of any material labor dispute to which any Group Member is a party,
including any strikes, lockouts or other disputes relating to any of such
Person’s plants and other facilities and (b) the incurrence by any Group Member
of any Worker Adjustment and Retraining Notification Act or related or similar
liability incurred with respect to the closing of any plant or other facility of
any such Person (other than, in the case of this clause (b), those that would
not, in the aggregate, be reasonably expected to have a Material Adverse
Effect).
          Section 6.5 ERISA-Related Information. The Borrower Representative
shall supply to the Administrative Agent:
          (a) promptly and in any event within 15 days after any ERISA Affiliate
files a Schedule B (or such other schedule as contains actuarial information) to
IRS Form 5500 in respect of a Title IV Plan with Unfunded Pension Liabilities, a
copy of such IRS Form 5500 (including the Schedule B);
          (b) promptly and in any event within 30 days after any ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred, a certificate of
the chief financial officer of the ERISA Affiliate describing such ERISA Event
and the action, if any, proposed to be taken with respect to such ERISA Event
and a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA
Event and any notices received by such ERISA Affiliate from the PBGC or any
other governmental agency with respect thereto; provided that, in the case of
ERISA Events under paragraph (g) of the definition thereof, the 30-day period
set forth above shall be a 10-day period, and, in the case of ERISA Events under
paragraph (e) of the definition thereof, in no event shall notice be given later
than the occurrence of the ERISA Event; and
          (c) promptly and in any event within 30 days after the adoption of, or
the commencement of contributions to, any Benefit Plan subject to Section 412 of
the Code or Title IV of ERISA by any ERISA Affiliate, or the adoption of any
amendment to a Benefit Plan subject to Section 412 of the Code or Title IV of
ERISA which results in a material increase in contribution obligations of any
ERISA Affiliate, a detailed written description thereof from the chief financial
officer of such ERISA Affiliate.
 

81

--------------------------------------------------------------------------------

 

ARTICLE 7
AFFIRMATIVE COVENANTS
          Each of Holdings and each Borrower agrees with the Lenders, the L/C
Issuers and the Administrative Agent to each of the following, as long as any
Obligation (other than any Contingent Loan Document Obligations) or any
Commitment remains outstanding:
          Section 7.1 Maintenance of Corporate Existence. Each Group Member
shall preserve and maintain its legal existence, except in the consummation of
transactions expressly permitted by Sections 8.4 and 8.7.
          Section 7.2 Compliance with Laws, Etc. Each Group Member shall comply
with all applicable Requirements of Law, except for such failures to comply that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
          Section 7.3 Payment of Obligations. Each Group Member shall pay or
discharge before they become delinquent (a) all material claims, taxes,
assessments, charges and levies imposed by any Governmental Authority and
(b) all other material lawful claims that if unpaid would, by the operation of
applicable Requirements of Law, become a Lien upon any property of any Group
Member, except, in each case, for those whose amount or validity is being
contested in good faith by proper proceedings diligently conducted and for which
adequate reserves are maintained on the books of the appropriate Group Member in
accordance with GAAP.
          Section 7.4 Maintenance of Property. Each Group Member shall maintain
and preserve (a) in good working order and condition all of its property
necessary in the conduct of its business and (b) all rights, Permits, licenses,
approvals and privileges necessary, used or useful, whether because of its
ownership, lease, sublease or other operation or occupation of property or other
conduct of its business, and shall make all necessary or appropriate filings
with, and give all required notices to, Government Authorities, except for such
failures to maintain and preserve the items set forth in clauses (a) and (b)
above that would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
          Section 7.5 Maintenance of Insurance. Each Group Member shall
(a) maintain or cause to be maintained in full force and effect all policies of
insurance with respect to the property and businesses of the Group Members
(including policies of life, fire, theft, product liability, public liability,
Flood Insurance, property damage, other casualty, employee fidelity, workers’
compensation, business interruption and employee health and welfare insurance)
with financially sound and reputable insurance companies or associations (in
each case that are not Affiliates of any Borrower) of a nature and providing
such coverage as is sufficient and as is customarily carried by businesses of
the size and character of the business of the Group Members, and (b) cause all
such insurance relating to any property or business of any Loan Party to name
the Administrative Agent on behalf of the Secured Parties as additional insured
or loss payee, as appropriate and to provide that insurer will provide 30 days’
prior notice of any cancellation thereof to the Administrative Agent.
Notwithstanding the requirement in subsection (a) above, Federal Flood Insurance
shall not be required for (x) real property not located in a Special Flood
Hazard Area, or (y) real property located in a Special Flood Hazard Area in a
community that does not participate in the National Flood Insurance Program.
 

82

--------------------------------------------------------------------------------

 

          Section 7.6 Keeping of Books. The Group Members shall keep proper
Consolidated books of record and account, in which full, true and correct
entries shall be made in accordance with GAAP and all other applicable
Requirements of Law of all material financial transactions and the assets and
business of the Group Members.
          Section 7.7 Access to Books and Property. Each Loan Party (and during
the continuance of a Default, each Group Member) shall permit the Administrative
Agent and its Related Persons, as often as reasonably requested, at any
reasonable time during normal business hours, with reasonable advance notice and
with the following right of inspection not to be exercised more frequently than
two (2) separate times during any Fiscal Year of Holdings (except that, during
the continuance of an Event of Default, no such notice shall be required and the
Administrative Agent may exercise all rights hereunder (including the right of
inspection) at any and all times during the continuance thereof) to (a) visit
and inspect the property of each Loan Party (and during the continuance of a
Default, each Group Member) and examine and make copies of and abstracts from,
the corporate (and similar), financial, operating and other books and records of
each Loan Party (and during the continuance of a Default, each Group Member),
(b) discuss the affairs, finances and accounts of each Loan Party (and during
the continuance of a Default, each Group Member) with any officer or director of
any Loan Party (and during the continuance of a Default, any Group Member) and
(c) communicate directly with any registered certified public accountants
(including the Group Members’ Accountants) of any Loan Party (and during the
continuance of a Default, each Group Member); provided, the Loan Parties shall
not be responsible for costs and expenses more than twice per year unless an
Event of Default has occurred and is continuing. Each Lender may accompany the
Administrative Agent on any visit or inspection once during any Fiscal Year of
Holdings at the reasonable expense of the Loan Parties and at such Lender’s own
expense for any additional visit or inspection during such Fiscal Year. Each
Loan Party (and during the continuance of a Default, each Group Member) shall
authorize their respective registered certified public accountants (including
the Group Members’ Accountants) to communicate directly with the Administrative
Agent and its Related Persons and to disclose to the Administrative Agent and
its Related Persons all financial statements and other documents and information
as they might have and the Administrative Agent reasonably requests with respect
to any Loan Party (and during the continuance of a Default, any Group Member).
          Section 7.8 Environmental. Each Group Member shall comply with, and
maintain its real property, whether owned, leased, subleased or otherwise
operated or occupied, in compliance with, all applicable Environmental Laws
(including by implementing any Remedial Action necessary for such Group Member
to achieve such compliance or that is required by orders and directives of any
Governmental Authority) except for failures to comply or maintain that would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Without limiting the foregoing, if an Event of Default is continuing or if the
Administrative Agent at any time has a reasonable basis to believe that there
exist violations of Environmental Laws by any Group Member or that there exist
any Environmental Liabilities, in each case, that would have, in the aggregate,
a Material Adverse Effect, then each Group Member shall, promptly upon receipt
of request from the Administrative Agent, cause the performance of, and allow
the Administrative Agent and its Related Persons access to such real property
for the purpose of conducting, such reasonable environmental audits and
assessments, including subsurface sampling of soil and groundwater, and cause
the preparation of such reports, in each case as the Administrative Agent may
from time to time reasonably request. Such audits, assessments and reports, to
the extent not conducted by the Administrative Agent or any of its Related
Persons, shall be conducted and prepared by reputable environmental consulting
firms
 

83

--------------------------------------------------------------------------------

 

reasonably acceptable to the Administrative Agent and shall be in form and scope
reasonably acceptable to the Administrative Agent.
          Section 7.9 Use of Proceeds. The proceeds of the Loans shall be used
by the Borrowers (and, to the extent distributed to them by the Borrowers, each
other Group Member) solely (a) to consummate the Related Transactions, the
Exchange Offer and for the payment of related transaction costs, fees and
expenses, (b) for the payment of transaction costs, fees and expenses incurred
in connection with the Loan Documents and the transactions contemplated therein
and (c) for working capital and general corporate and similar purposes.
          Section 7.10 Additional Collateral and Guaranties. To the extent not
delivered to the Administrative Agent on or before the Closing Date (including
in respect of after-acquired property and Persons that become Subsidiaries of
any Loan Party after the Closing Date), each Group Member shall, promptly, do
each of the following, unless otherwise agreed by the Administrative Agent:
          (a) deliver to the Administrative Agent such modifications to the
terms of the Loan Documents (or, to the extent applicable as determined by the
Administrative Agent, such other documents), in each case in form and substance
reasonably satisfactory to the Administrative Agent and as the Administrative
Agent deems necessary or advisable in order to ensure the following:
          (i) (A) each Subsidiary of any Loan Party that has entered into
Guaranty Obligations with respect to any Indebtedness of the Borrowers and
(B) each Wholly Owned Subsidiary of any Loan Party shall guaranty, as primary
obligor and not as surety, the payment of the Obligations of the Borrowers; and
          (ii) each Loan Party (including any Person required to become a
Guarantor pursuant to clause (i) above) shall effectively grant to the
Administrative Agent, for the benefit of the Secured Parties, a valid and
enforceable security interest in substantially all of its property as security
for the Obligations of such Loan Party, either by supplement to the Guaranty and
Security Agreement or by separate agreement on substantially the same terms;
provided, however, that, unless the Borrowers and the Administrative Agent
otherwise agree, in no event shall (x) any Excluded Foreign Subsidiary be
required to guaranty the payment of any Obligation, (y) the Loan Parties,
individually or collectively, be required to pledge in excess of 65% of the
outstanding Voting Stock of any Excluded Foreign Subsidiary or (z) a security
interest be required to be granted on any property of any Excluded Foreign
Subsidiary as security for any Obligation;
          (b) deliver to the Administrative Agent all certificates representing
all Securities pledged and required to be delivered pursuant to the documents
delivered pursuant to clause (a) above, together with undated powers or
endorsements duly executed in blank;
          (c) upon the reasonable request of the Administrative Agent, deliver
to it (x) appraisals that the Administrative Agent or any Lender determines are
required to comply with FIRREA, (y) within 45 days of receipt of notice from the
Administrative Agent that real property of the Loan Parties which is subject to
a Mortgage is located in a Special Flood Hazard Area, Federal Flood Insurance as
required by Section 7.5, and (z) a Mortgage, in each case on any real
 

84

--------------------------------------------------------------------------------

 

property with a fair market value in excess of $2,000,000 owned by any Loan
Party, together with all Mortgage Supporting Documents relating thereto;
          (d) use commercially reasonable efforts to deliver to the
Administrative Agent landlord waivers for any additional locations where the
books and records of the Loan Parties are located;
          (e) reasonably promptly upon the request by the Administrative Agent,
take all other actions necessary or advisable to ensure the validity or
continuing validity of any guaranty for any Obligation or any Lien securing any
Obligation, to perfect, maintain, evidence or enforce any Lien securing any
Obligation or to ensure such Liens have the same priority as that of the Liens
on similar Collateral set forth in the Loan Documents as in effect on the
Closing Date, including the filing of UCC financing statements in such
jurisdictions as may be required by the Loan Documents or applicable
Requirements of Law or as the Administrative Agent may otherwise reasonably
request; and
          (f) if reasonably requested by the Administrative Agent, deliver to
the Administrative Agent customary legal opinions relating to the matters
described in this Section 7.10, which opinions shall be in form and substance
and from counsel reasonably satisfactory to, the Administrative Agent.
          Section 7.11 Controlled Deposit Accounts and Controlled Securities
Accounts. No later than forty-five days after the Closing Date, or such later
date to which the Administrative Agent may agree in writing, each Loan Party
shall (a) deposit all of its cash in deposit accounts that are Controlled
Deposit Accounts, provided, however, that each Group Member may maintain
zero-balance accounts for the purpose of managing local disbursements and may
maintain payroll, withholding tax and other fiduciary accounts and (b) deposit
all of its Cash Equivalents in securities accounts that are Controlled
Securities Accounts, in each case except for cash and Cash Equivalents the
aggregate value of which does not exceed $250,000 at any time.
          Section 7.12 Compliance Program. The Group Members shall continue to
maintain a compliance program related to their obligations as a “business
associate” of “covered entities,” as such terms are defined by HIPAA, including
employee training and policies and procedures on the appropriate use and
disclosure of protected health information. The Group Members shall revise and
update such compliance program, as appropriate, to take into account any changes
in law or regulation affecting such program in any material respect.
          Section 7.13 Interest Rate Contracts. The Borrower shall, within
90 days after the Closing Date, enter into and thereafter maintain Interest Rate
Contracts on terms and with counterparties reasonably satisfactory to the
Administrative Agent, to provide protection against fluctuation of interest
rates until the second anniversary of the Closing Date for a notional amount
that, when added to the aggregate principal amount of Consolidated Total Debt of
Holdings bearing interest at a fixed rate, equals at least 50% of the aggregate
principal amount of the Consolidated Total Debt of Holdings (excluding Revolving
Loans and Swingline Loans).
          Section 7.14 Post Closing Covenant.
          (a) Not later than thirty days after the Closing Date, or such later
date to which the Administrative Agent may agree in writing, the Loan Parties
shall have delivered to the
 

85

--------------------------------------------------------------------------------

 

Administrative Agent a copy of each Constituent Document of CBay India that is
on file with any Governmental Authority in India, certified as of a recent date
by such Governmental Authority.
          (b) Not later than forty-five days after the Closing Date, or such
later date to which the Administrative Agent may agree in writing, the Loan
Parties shall have complied with the requirements of Section 7.11.
          (c) Not later than forty-five days after the Closing Date, or such
later date to which the Administrative Agent may agree in writing, the Loan
Parties shall have complied with the requirements of Section 7.10(d) with
respect to locations where books and records of the Loan Parties are maintained.
ARTICLE 8
NEGATIVE COVENANTS
          Each of Holdings and each Borrower agrees with the Lenders, the L/C
Issuers and the Administrative Agent to each of the following, as long as any
Obligation (other than any Contingent Loan Document Obligations) or any
Commitment remains outstanding:
          Section 8.1 Indebtedness. No Group Member shall incur or otherwise
remain liable with respect to, any Indebtedness except for the following:
          (a) the Obligations;
          (b) Indebtedness existing on the Signing Date and set forth on
Schedule 8.1, together with any Permitted Refinancing thereof;
          (c) Indebtedness consisting of Capitalized Lease Obligations (other
than with respect to a lease entered into as part of a Sale and Leaseback
Transaction) and purchase money Indebtedness to finance the acquisition, repair,
improvement or construction of fixed or capital assets of such Group Member, in
each case incurred by any Group Member (other than Holdings) together with any
Permitted Refinancing thereof; provided, however, that (i) the aggregate
outstanding principal amount of all such Indebtedness permitted under this
clause (c) does not exceed $5,000,000 (plus $1,000,000 per Fiscal Year occurring
after the 2010 Fiscal Year) at any one time and (ii) the principal amount of
such Indebtedness does not exceed the lower of the cost or fair market value
(calculated at the time an acquisition, repair, improvement or construction is
made) of the property so acquired or built or of such repairs or improvements
financed, whether directly or through a Permitted Refinancing, with such
Indebtedness;
          (d) Capitalized Lease Obligations incurred by any Group Member (other
than Holdings) arising under Sale and Leaseback Transactions involving the sale
of assets permitted hereunder in reliance upon Sections 8.4(d) or (e);
          (e) Indebtedness owed by one Group Member to any other Group Member to
the extent that the resulting Investment held by the payee of such Indebtedness
constitutes a Permitted Investment under Section 8.3(e);
 

86

--------------------------------------------------------------------------------

 

          (f) (i) obligations under Interest Rate Contracts entered into to
comply with Section 7.13 and (ii) obligations under Hedging Agreements entered
into in the Ordinary Course of Business and not for speculation;
          (g) Guaranty Obligations of any Group Member with respect to
Indebtedness of any Group Member (except with respect to Permitted Refinancings,
for which Guaranty Obligations are permitted only to the extent set forth in the
definition thereof), to the extent that such Guaranty constitutes a Permitted
Investment under Section 8.3(e);
          (h) Indebtedness of any Group Member (other than Holdings) in respect
of performance bonds, bid bonds, appeal bonds, surety bonds, performance and
completion guarantees and similar obligations, in each case, that are incurred
in the Ordinary Course of Business and not in connection with the borrowing of
money or Hedging Agreement;
          (i) Indebtedness of any Group Member consisting of (i) obligations to
pay insurance premiums, or (ii) take or pay obligations contained in supply
agreements, in each case, with such obligations arising in the Ordinary Course
of Business and not in connection with the borrowing of money or Hedging
Agreements;
          (j) Indebtedness evidenced by the Subordinated Notes;
          (k) unsecured Indebtedness of any Group Member representing deferred
compensation to employees, consultants or independent contractors of a Group
Member incurred in the Ordinary Course of Business, or of a Person whose
liability for such compensation has been assumed pursuant to a Permitted
Acquisition;
          (l) Indebtedness in respect of automatic clearing house arrangements,
employee issued credit or purchase cards and overdraft protections, in each
case, incurred in the Ordinary Course of Business by any Group Member, provided
that (i) such Indebtedness (other than credit or purchase cards) is extinguished
within ten (10) Business Days of its incurrence and (ii) such Indebtedness in
respect of credit or purchase cards is extinguished within sixty (60) days of
its incurrence;
          (m) Indebtedness of Excluded Foreign Subsidiaries, provided that such
Indebtedness is for working capital or general corporate purposes in an
aggregate principal amount not to exceed $7,000,000 at any time outstanding;
          (n) to the extent constituting Indebtedness, any earn-out or similar
obligations of any Group Member incurred in connection with Permitted
Acquisitions;
          (o) Indebtedness, and any Permitted Refinancing thereof, (i) of a
Person which became a Group Member after the Closing Date that existed at the
time such Person became a Group Member, provided that such Indebtedness was not
incurred in contemplation of such Person becoming a Group Member or
(ii) otherwise incurred in connection with a Permitted Acquisition and
subordinated to the Obligations on terms and conditions reasonably acceptable to
the Administrative Agent; provided, however, that all such Indebtedness under
this clause (o) shall not exceed $5,000,000 in the aggregate at any time
outstanding;
          (p) other Indebtedness of any Group Member (other than Holdings) not
exceeding in the aggregate at any time outstanding $1,500,000;
 

87

--------------------------------------------------------------------------------

 

          (q) Indebtedness of Holdings or MedQuist owing to former officers,
directors, consultants and employees (or any spouses, ex-spouses or estates of
any of the foregoing) of a Group Member incurred in connection with the
repurchase of Stock and Stock Equivalents of Holdings or MedQuist that have been
issued to such Persons, provided that the amount of such Indebtedness pursuant
to this clause (q) shall not exceed an aggregate outstanding principal balance
of $5,000,000 at any time, and the Indebtedness pursuant to this clause (q)
shall be subordinated to the Obligations on terms and conditions reasonably
acceptable to the Administrative Agent; and
          (r) all customary premiums (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest on
Indebtedness described in each of Sections 8.1(a) through (q) above.
          Section 8.2 Liens. No Group Member shall incur, maintain or otherwise
suffer to exist any Lien upon or with respect to any of its property, whether
now owned or hereafter acquired, except for the following:
          (a) Liens created pursuant to any Loan Document;
          (b) Customary Permitted Liens of Group Members;
          (c) Liens existing on the Signing Date and set forth on Schedule 8.2;
          (d) Liens on the property of any Group Member (other than Holdings)
securing Indebtedness of such Group Member permitted hereunder in reliance upon
Section 8.1(c); provided, however, that (i) such Liens exist prior to the
acquisition of, or attach substantially simultaneously with, or within 90 days
after, the acquisition, repair, improvement or construction of, such property
financed, whether directly or through a Permitted Refinancing, by such
Indebtedness and (ii) such Liens do not extend to any property of any Group
Member other than the property (and proceeds thereof) acquired or built, or the
improvements or repairs, financed, whether directly or through a Permitted
Refinancing, by such Indebtedness;
          (e) Liens on the property of Group Members securing the Permitted
Refinancing of any Indebtedness secured by any Lien on such property permitted
hereunder in reliance upon clause (c) or (d) above or this clause (e) without
any change in the property subject to such Liens;
          (f) Liens with respect to the Property of any Excluded Foreign
Subsidiary securing Indebtedness of such Excluded Foreign Subsidiary that is
permitted under Section 8.1(m);
          (g) Liens with respect to Indebtedness permitted under Section 8.1(e)
and (g), provided that (i) such Liens shall be expressly subordinated in all
respects to the Liens securing the Obligations on terms reasonably satisfactory
to the Administrative Agent, (ii) any Indebtedness owing by a Loan Party to a
Person who is not a Loan Party shall not be secured at any time and (iii) any
Guaranty Obligation of a Subsidiary that is not a Loan Party may not be secured
by Property of any other Loan Party;
          (h) Liens on Property which is the subject of a Capitalized Lease
Obligation permitted by Section 8.1(d);
 

88

--------------------------------------------------------------------------------

 

          (i) Liens on Property acquired in connection with a Permitted
Acquisition that was subject to such Lien prior to such Permitted Acquisition to
the extent such Lien was not made in connection with or in contemplation of such
Permitted Acquisition and which only secures Indebtedness permitted to be
assumed in connection with such Permitted Acquisition or any Permitted
Refinancing thereof; and
          (j) Liens on Property of Group Members not otherwise permitted by this
Section 8.2 so long as the aggregate principal amount of Indebtedness and other
obligations secured thereby does not exceed $1,000,000 at any time.
          Section 8.3 Investments. No Group Member shall make or maintain any
Investment except for the following:
          (a) Investments existing on the Signing Date and set forth on
Schedule 8.3;
          (b) Investments in cash and Cash Equivalents;
          (c) (i) endorsements for collection or deposit in the Ordinary Course
of Business consistent with past practice, (ii) extensions of trade credit
arising or acquired in the Ordinary Course of Business and (iii) Investments
acquired in connection with the settlement of delinquent accounts arising in the
Ordinary Course of Business, in connection with the bankruptcy or reorganization
of suppliers or customers or as security for such claims, or upon the
foreclosure by a Loan Party of its Lien with respect to any secured Investment;
          (d) Investments by Loan Parties made as part of a Permitted
Acquisition and Investments held by any Person acquired as part of a Permitted
Acquisition (and not made in connection with or in contemplation of such
Permitted Acquisition);
          (e) Investments by (i) any Loan Party in or to any other Loan Party
(other than Holdings, except to the extent such Investment could be made as a
Restricted Payment to Holdings), (ii) any Loan Party in or to a Group Member
which is not a Loan Party not to exceed, for all such Investments, (x)
$4,000,000 in the aggregate outstanding at any time when the Consolidated Total
Leverage Ratio of Holdings is equal to or greater than 1.50:1.00 and (y)
$4,000,000 plus Additional Available Cash at any time when the Consolidated
Total Leverage Ratio of Holdings is less than 1.50:1.00 or (iii) a Group Member
who is not a Loan Party to another Group Member; provided that (x) if the
Investments described in foregoing clauses (i) or (ii) are extensions of credit
evidenced by notes, such notes shall be pledged and delivered to the
Administrative Agent, for the benefit of the Secured Parties and (y) any
Investment constituting an extension of credit to a Loan Party described in
clause (i) or (iii), is expressly subordinated to the repayment of the
Obligations;
          (f) loans and advances to officers, directors, consultants and
employees of a Group Member (i) to finance the purchase of Stock and Stock
Equivalents of Holdings or MedQuist, provided that the amount of such loans and
advances used to acquire such Stock and Stock Equivalents shall not exceed an
aggregate outstanding principal balance of $500,000 at any time, (ii) for
reasonable and customary business related travel expenses, entertainment
expenses and moving expenses, and similar expenses, in each case, incurred in
the Ordinary Course of Business and with loans and advances for all such
expenses not to exceed $500,000 in the aggregate outstanding at any time, and
(iii) for additional purposes not contemplated by clause (i)
 

89

--------------------------------------------------------------------------------

 

or (ii) above, provided that the aggregate principal amount at any time
outstanding with respect to this clause 8.3(f)(iii) shall not exceed $500,000;
          (g) Investments received as the non-cash portion of consideration
received in connection with transactions permitted pursuant to Sections 8.4(a),
(d) or (e); provided that the aggregate principal amount at any time outstanding
with respect to such Investments received under Section 8.4(a) shall not exceed
$1,000,000;
          (h) Investments made to repurchase or retire Stock or Stock
Equivalents of Holdings (or any direct or indirect parent thereof) or MedQuist
in accordance with Section 8.5(d);
          (i) Guarantees by a Group Member of leases (other than of Capital
Leases) or of other obligations that do not constitute Indebtedness, in each
case, entered into in the Ordinary Course of Business;
          (j) Guarantees permitted under Section 8.1;
          (k) advances made in connection with purchases of goods or services in
the Ordinary Course of Business;
          (l) deposits of cash made in the Ordinary Course of Business to secure
performance of operating leases;
          (m) Investments in Hedging Agreements and Interest Rate Contracts
permitted under Section 8.1(f);
          (n) Investments in the common Stock of MedQuist made in connection
with the Exchange Offer; and
          (o) other Investments not exceeding (i) $2,000,000 in the aggregate
since the Signing Date plus (ii) Additional Available Cash to the extent the
Consolidated Total Leverage Ratio of Holdings both before and after giving
effect to such Investment is less than 1.50:1.00.
          Section 8.4 Asset Sales. No Group Member shall Sell any of its
Property (other than cash), enter into any Sale and Leaseback Transaction or
(other than with respect to Holdings) issue shares of its own Stock, except for
the following:
          (a) In each case to the extent entered into in the Ordinary Course of
Business (i) obsolete, worn-out, used or surplus Property to the extent such
Property is not necessary for the operation of the Group Members’ businesses;
(ii) inventory, equipment and goods sold; and (iii) cash and Cash Equivalents;
          (b) (i) any Sale of any property by (A) any Loan Party to any other
Loan Party (other than Holdings, except to the extent that such property could
be distributed as a Restricted Payment to Holdings) and (B) any Group Member
that is not a Loan Party to any other Group Member that is not a Loan Party,
(ii) any Sale by any Loan Party to a Group Member that is not a Loan Party and
any Sale by a Group Member that is not a Loan Party to any Loan Party provided
that all such Sales do not exceed in the aggregate (x) $1,000,000 for all such
sales made at any time when the Consolidated Total Leverage Ratio of Holdings is
equal to or greater than 1.5:1.0, (y) $5,000,000 for all such sales made at any
time when the Consolidated Total Leverage
 

90

--------------------------------------------------------------------------------

 

Ratio of Holdings is equal to or greater than 1.0:1.0 and less than 1.5:1.0 and
(z) $10,000,000 for all such sales at any time when the Consolidated Total
Leverage Ratio of Holdings is less than 1.0:1.0, and provided further that to
the extent any such Sale under this clause (ii) is not for fair market value,
the resulting Investment by such Loan Party constitutes a Permitted Investment
under Sections 8.3(e) or (o), (iii) any Restricted Payment by any Group Member
permitted pursuant to Section 8.5 and (iv) any distribution by Holdings of the
proceeds of Restricted Payments from any other Group Member to the extent
permitted in Section 8.5;
          (c) (i) any Sale or issuance by Holdings of its own Stock, (ii) any
Sale or issuance by any Group Member of its own Stock to any Loan Party, or by
any Group Member that is not a Loan Party to another Group Member that is not a
Loan Party to the extent that the resulting Investment is a Permitted Investment
under Section 8.3(e); provided, however, that the proportion of the Stock of any
Group Member (both on an outstanding and fully-diluted basis) held by the Loan
Parties, taken as a whole, and pledged to the Administrative Agent is not
reduced as a result of such Sale or issuance and (iii) to the extent necessary
to satisfy any Requirement of Law in the jurisdiction of incorporation of any
Group Member, any Sale or issuance by such Group Member of its own Stock
constituting directors’ qualifying shares or nominal holdings;
          (d) dispositions of Property not otherwise permitted hereunder that
are made for fair market value; provided, that (i) at the time of any
disposition, no Default or Event of Default shall exist or shall result from
such disposition, (ii) not less than 75% of the aggregate sales price from such
disposition shall be paid in cash or Cash Equivalents, (iii) the aggregate fair
market value of all Property so sold by the Group Members, together, shall not
exceed in any Fiscal Year the greater of (x) one percent (1%) of the total
assets of the Group Members reflected on the Financial Statements delivered to
the Administrative Agent in accordance with Section 6.1 for the preceding Fiscal
Year, and (y) $2,500,000 and (iv) after giving effect to such disposition, the
Loan Parties are in compliance on a pro forma basis with the covenants set forth
in Article 5, recomputed for the most recent Fiscal Quarter for which Financial
Statements have been delivered;
          (e) other dispositions of Property the fair market value of which
shall not exceed, in the aggregate, $500,000;
          (f) any (i) sale or discounting of accounts receivable arising in the
Ordinary Course of Business in connection with the compromise or collection
thereof and (ii) involuntary sale, transfer, assignment or other disposition
resulting from a Property Loss Event upon the receipt of the applicable net
proceeds for such Property Loss Event;
          (g) licenses, sublicenses, leases or subleases granted in the Ordinary
Course of Business not interfering with the business of the Group Members in any
material respect;
          (h) Property to the extent that (i) such Property is exchanged for
credit against the purchase price of similar replacement Property or (ii) the
proceeds of such disposition are promptly applied to the purchase price of such
replacement Property, in each case, provided that to the extent the Property
being transferred constitutes Collateral, such replacement Property shall be
made subject to the Liens arising under the Loan Documents;
          (i) the Group Members may effect any transaction permitted by
Section 8.3, 8.5 or 8.7;
 

91

--------------------------------------------------------------------------------

 

          (j) lease of any tangible Property and licensing or contribution of
Intellectual Property pursuant to joint marketing arrangements with other
Persons, in each case, in the Ordinary Course of Business;
          (k) the RCM Sale;
          (l) the A-Life Sale; and
          (m) dispositions of any Property between or among the Group Members as
a substantially concurrent interim disposition in connection with a disposition
of such Property otherwise permitted pursuant to clauses (a) through (k) above.
          Section 8.5 Restricted Payments. No Group Member shall declare, pay or
make any Restricted Payment except for the following (and Holdings shall not use
the proceeds of any Restricted Payment made in reliance under clause (c) below
other than as set forth in such clause (c)):
          (a) Restricted Payments (i) by a Loan Party to any Loan Party other
than Holdings (except as otherwise permitted under any other clause of this
Section 8.5) and (ii) by any Group Member that is not a Loan Party to any Group
Member;
          (b) dividends and distributions declared and paid on the common Stock
of any Group Member ratably to the holders of such common Stock and payable only
in common Stock of such Group Member;
          (c) cash dividends or distributions on the Stock of the Group Members
(other than Holdings) to Holdings paid and declared solely for the purpose of
funding the following:
     (i) payments by Holdings in respect of taxes then due and owing by Holdings
in respect of the other Group Members;
     (ii) ordinary operating expenses of Holdings; provided, however, that the
amount of such cash dividends paid in any Fiscal Year shall not exceed
$6,000,000 in the aggregate;
     (iii) payments with respect to withholding or similar taxes payable or
expected to be payable by or with respect to any present or former employee,
director, manager or consultant (or their respective Affiliates, estates or
immediate family members) for any repurchases of Stock or Stock Equivalents in
Holdings including deemed repurchases in connection with the exercise of stock
options, provided in each case that payments made under this clause (iii) shall
not exceed $500,000 in the aggregate; and
     (iv) to pay the consideration necessary to consummate any Permitted
Acquisition in accordance with the agreements evidencing such Permitted
Acquisition;
 

92

--------------------------------------------------------------------------------

 

provided, however, that no action that would otherwise be permitted hereunder in
reliance upon this clause (c) (other than clause (i) or (ii) above) shall be
permitted if a Default is then continuing or would result therefrom;
          (d) the Group Members may redeem, acquire, retire or repurchase (and
the Group Members may declare and pay cash Restricted Payments to another Group
Member (or any direct or indirect parent thereof), the proceeds of which are
used to so redeem, acquire, retire or repurchase) shares of Stock or Stock
Equivalents of Holdings or any Excluded Foreign Subsidiary (or any options or
warrants or stock appreciation rights issued with respect to any of such Stock
or Stock Equivalents) (or to allow Holdings (or any direct or indirect parent
thereof) or any Excluded Foreign Subsidiary to so redeem, retire, acquire or
repurchase its Stock or Stock Equivalents) held by current or former officers,
managers, consultants, directors and employees (or their respective spouses,
former spouses, successors, executors, administrators, heirs, legatees or
distributees) of a Group Member (or any direct or indirect parent thereof), with
the proceeds of cash Restricted Payments from a Group Member, upon the death,
disability, retirement or termination of employment of any such Person or
otherwise in accordance with any stock option or stock appreciation rights plan,
any management, director and/or employee stock ownership or incentive plan,
stock subscription plan, employment termination agreement or any other
employment agreements or equity holders’ agreement; provided that
     (i) no Default or Event of Default has occurred and is continuing or would
arise as a result of such Restricted Payment;
     (ii) the aggregate Restricted Payments permitted in any fiscal year of
Holdings shall not exceed $5,000,000; and
     (iii) with respect to any redemption of Stock or Stock Equivalents in an
Excluded Foreign Subsidiary or Stock or Stock Equivalents held by current or
former officers, managers, consultants, directors and employees (or their
respective spouses, former spouses, successors, executors, administrators,
heirs, legatees or distributees) of an Excluded Foreign Subsidiary, such
Restricted Payment shall be funded solely by such Excluded Foreign Subsidiary or
with the proceeds of an Investment in such Excluded Subsidiary permitted under
Section 8.3 hereof;
          (e) Holdings may redeem in whole or in part any of its Stock or Stock
Equivalents for another class of Stock or Stock Equivalents of Holdings or
rights to acquire Stock or Stock Equivalents in Holdings, provided that (i) the
funds used to effect such redemption shall be provided solely from concurrent
equity contributions or issuances of new shares of Holdings’ Stock or Stock
Equivalents and (ii) any terms and provisions material to the interests of the
Secured Parties, when taken as a whole, contained in such other class of Stock
or Stock Equivalents are at least as advantageous to the Secured Parties as
those contained in the Stock or Stock Equivalents redeemed thereby; and
          (f) Restricted Payments by the Group Members to fund Investments
permitted by Sections 8.3(e) or (o);
          (g) cash dividends and distributions by any Group Member to fund
indemnification payments owed by Holdings to selling shareholders under
stockholders or registration rights agreements entered into in connection with
the Exchange Offer or the Holdings
 

93

--------------------------------------------------------------------------------

 

IPO or owed by Holdings under the Sponsor Consulting Agreement; provided, that
at the time of any such dividend or distribution, no Default or Event of Default
shall exist or shall result therefrom;
          (h) repurchases of Stock of selling shareholders other than CBay in
connection with the Exchange Offer or the Holdings IPO for consideration not to
exceed $5,000,000 in the aggregate; provided, that at the time of any such
repurchase, no Default or Event of Default shall exist or shall result
therefrom;
          (i) cash dividends and distributions by any Group Member to fund
Holdings’ obligation arising under the Sponsor Consulting Agreement to reimburse
Sponsor and Lehman for out-of-pocket expenses not to exceed $250,000 per Fiscal
Year; provided, that at the time of any such dividend or distribution, no
Default or Event of Default shall exist or shall result therefrom; and
          (j) other Restricted Payments by the Group Members not to exceed
$500,000 in the aggregate during the term of this Agreement plus, to the extent
the Consolidated Total Leverage Ratio of Holdings is less than 1.00:1.00 both
before and after giving effect to such Restricted Payment and any Indebtedness
incurred in connection therewith, Additional Available Cash; provided, that at
the time any such Restricted Payment is made no Default or Event of Default
shall exist or shall result therefrom.
          Section 8.6 Prepayments of Indebtedness Under Subordinated Notes. No
Group Member shall (a) prepay, redeem, purchase, defease or otherwise satisfy
prior to the scheduled maturity date thereof any Indebtedness evidenced by
Subordinated Note Documents, (b) set apart any property for such purpose,
whether to a sinking fund, a similar fund or otherwise, or (c) make any payment
in violation of any subordination provisions applicable thereto; provided,
however, that each Group Member may, in each case to the extent permitted under
the Subordination Agreement, (i) make regularly scheduled or otherwise required
repayments or redemptions of Indebtedness evidenced by Subordinated Note
Documents and (ii) to the extent no Default or Event of Default exists or would
result therefrom, make optional prepayments or redemptions of Indebtedness
evidenced by Subordinated Note Documents with Additional Available Cash to the
extent that the Consolidated Total Leverage Ratio of Holdings is less than
1.50:1.00 prior to giving effect to any such prepayment or redemption.
          Section 8.7 Fundamental Changes. No Group Member shall merge,
consolidate or amalgamate with any Person, or liquidate or dissolve, except for
the following:
          (a) to consummate any Permitted Acquisition;
          (b) a Loan Party may merge, amalgamate or consolidate with, or
dissolve or liquidate into any other Loan Party (other than Holdings), or may
merge, amalgamate or consolidate with any other Person that is incorporated or
otherwise organized under the laws of a state of the United States of America,
provided that (i) a Borrower shall be the continuing or surviving entity, or if
a Borrower is not involved with such merger, amalgamation or consolidation, such
Guarantor or such other Person, as the case may be, shall be the continuing or
surviving entity, (ii) if such other Person constitutes the continuing or
surviving entity, it shall have become a Guarantor simultaneously with such
transaction and satisfied the requirements of Section 7.10, (iii) no Default or
Event of Default shall have occurred and be continuing at the date of such
merger, amalgamation, consolidation, dissolution or liquidation or would result
 

94

--------------------------------------------------------------------------------

 

therefrom and (iv) the Administrative Agent shall have a first priority Lien on
all of the Stock and all Stock Equivalents on a fully diluted basis in the
surviving Borrower, Guarantor or such other Person and on all Property of the
surviving Borrower or Guarantor or to the extent required by Section 7.10, such
other Person;
          (c) Holdings may merge, amalgamate or consolidate with, or dissolve or
liquidate into, any other Loan Party; provided that (i) no Default or Event of
Default shall have occurred and be continuing at the date of such merger,
amalgamation consolidation, dissolution or liquidation or would result
therefrom, (ii) Holdings shall be the surviving entity and after giving effect
to such merger, amalgamation consolidation, dissolution or liquidation Holdings
shall be in compliance with the requirements of Section 8.8(b) and (iii) the
requirements of Section 7.10 shall have been satisfied;
          (d) any Excluded Foreign Subsidiary may merge, amalgamate or
consolidate with, or dissolve or liquidate into, another Excluded Foreign
Subsidiary, provided that no Default or Event of Default shall have occurred and
be continuing at the date of such merger, amalgamation consolidation,
dissolution or liquidation or would result therefrom and the requirements of
Section 7.10 shall have been satisfied;
          (e) any Guarantor (other than Holdings) may merge, amalgamate or
consolidate with or into any Group Member that is not a Loan Party; provided
that if such Guarantor is not the surviving entity or the surviving entity has
not satisfied the requirements of Section 7.10, such merger, amalgamation or
consolidation shall be deemed to be an “Investment” and subject to the
limitations set forth in Section 8.3(e) or (o);
          (f) any Group Member (other than Holdings or a Borrower) may liquidate
or dissolve if (x) the Borrowers determine in good faith that such liquidation
or dissolution is in the best interests of the Borrowers and is not materially
disadvantageous to the Lenders and (y) to the extent such Group Member is a
Guarantor, any Property not otherwise disposed of or transferred in accordance
with Sections 8.3 or 8.4, or, in the case of any such business of such Group
Member discontinued, such business, shall be transferred to, or otherwise owned
or conducted by, another Guarantor or a Borrower after giving effect to such
liquidation or dissolution
          (g) Holdings may convert to a Delaware corporation pursuant to the
provisions of Section 265 of the Delaware Corporation Law; and
          (h) to the extent not otherwise permitted by this Section 8.7, the
Group Members may consummate (i) a merger, dissolution, liquidation,
consolidation or amalgamation, the purpose of which is to effect a disposition
permitted pursuant to Section 8.4 or (ii) a merger the purpose of which is to
effect an Investment permitted pursuant to Section 8.3, provided that, in each
case, (x) no Default or Event of Default would result from the consummation
thereof, (y) if such merger, dissolution, liquidation, consolidation or
amalgamation undertaken to effect an Investment pursuant to clause (ii) above
involves a Borrower or a Guarantor, such Borrower, or if a Borrower is not
involved, such Guarantor, shall be the continuing or surviving entity and
(z) the parties shall have satisfied the requirements of Section 7.10.
          Section 8.8 Change in Nature of Business. (a) No Group Member (other
than Holdings) shall engage in any material line of business substantially
different from those lines of business carried on by it on the Signing Date or
any business reasonably related thereto, complementary thereto, ancillary
thereto or a reasonable extension thereof.
 

95

--------------------------------------------------------------------------------

 

          (b) Holdings, and prior to the MedQuist Consolidation Date, MedQuist,
shall not engage in any business activities or own any Property other than
(i) ownership of the Stock and Stock Equivalents of its Subsidiaries or as
permitted under Section 8.3, (ii) activities incidental to maintenance of its
corporate existence or as otherwise permitted under this Agreement (including
the payment of tax payables and other corporate overhead expenses), (iii) the
Related Transactions, the Exchange Offer and the Holdings IPO, (iv) performing
its obligations incidental to any of the foregoing under the Loan Documents,
other Indebtedness permitted by this Agreement and documentation entered into in
connection with the Related Transactions, the Exchange Offer, the Holdings IPO
or any Permitted Acquisition or Investment permitted by Section 8.3, (v)
entering into and consummating transactions expressly permitted under this
Agreement and (vi) making Restricted Payments permitted by Section 8.5.
          Section 8.9 Transactions with Affiliates. No Group Member shall,
except as otherwise expressly permitted herein, enter into any other transaction
with, or for the benefit of, any Affiliate of any Borrower that is not a Loan
Party (including Guaranty Obligations with respect to any obligation of any such
Affiliate), except for:
          (a) transactions expressly permitted by this Agreement;
          (b) transactions among Loan Parties;
          (c) transactions among Group Members that are not Loan Parties;
          (d) tax sharing arrangements on customary terms entered into among the
Group Members to provide for the allocation of the tax liability to be
discharged with a Restricted Payment under Section 8.5(c)(i);
          (e) any issuance of Stock or Stock Equivalents in Holdings, or other
payments, awards or grants in cash or Stock or Stock Equivalents of Holdings
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the board of directors of Holdings and in accordance
with Requirements of Law, and any issuance of Stock of MedQuist upon the
exercise of stock options existing on the Signing Date;
          (f) employment and severance arrangements and health, disability and
similar insurance or benefit plans between Group Members and their respective
directors, officers, employees (including management and employee benefit plans
or agreements, subscription agreements or similar agreements pertaining to the
repurchase of Stock and Stock Equivalents pursuant to put/call rights or similar
rights with current or former employees, officers or directors and stock option
or incentive plans and other compensation arrangements) in the Ordinary Course
of Business or as otherwise approved by the board of directors of the applicable
Group Member;
          (g) payment of reasonable compensation to officers and employees for
actual services rendered to Group Members (other than an Excluded Foreign
Subsidiary unless such payment is funded solely by such Excluded Foreign
Subsidiary or with the proceeds of an Investment in such Excluded Foreign
Subsidiary permitted under Section 8.3 hereof) in the Ordinary Course of
Business;
          (h) the payment of customary fees and reasonable out-of-pocket costs
to, and indemnities provided on behalf of, directors, managers, consultants
(other than Sponsor or its
 

96

--------------------------------------------------------------------------------

 

Affiliates), officers and employees of Group Members in the Ordinary Course of
Business to the extent attributable to the ownership or operation of any Group
Member (other than an Excluded Foreign Subsidiary unless such payment is funded
solely by such Excluded Foreign Subsidiary or with the proceeds of an Investment
in such Excluded Foreign Subsidiary permitted under Section 8.3);
          (i) the Related Transactions, the Exchange Offer, the Holdings IPO and
the payment of expenses (subject to the limitations set forth in clauses (j) and
(k) below with respect to the expenses described therein) with respect thereto;
          (j) reimbursement of expenses of selling shareholders by Holdings
required under stockholders or registration rights agreements entered into in
connection with the Exchange Offer or the Holdings IPO in an aggregate amount
not to exceed $2,500,000; provided, that at the time of any such payment, no
Default or Event of Default shall exist or shall result therefrom;
          (k) payments by Holdings to the Sponsor or directors of Holdings
designated by the Sponsor required under agreements to be entered into by
Holdings in connection with the Exchange Offer or the Holdings IPO in an
aggregate amount not to exceed $12,000,000; provided, that at the time of any
such payment, no Default or Event of Default shall exist or shall result
therefrom;
          (l) transactions pursuant to permitted agreements in existence or
contemplated on the Signing Date and set forth on Schedule 8.9 or any amendment
thereto to the extent such an amendment is not adverse, taken as a whole, to the
Secured Parties in any material respect;
          (m) Restricted Payments permitted under Section 8.5;
          (n) mergers, consolidations, amalgamations, liquidations and
dissolutions permitted under Section 8.7;
          (o) Investments permitted by Section 8.3;
          (p) payments to the Sponsor or Lehman in the Stock of Holdings under
the Sponsor Consulting Agreement to satisfy the remaining fees payable
thereunder;
          (q) payments to Sponsor or shareholders of any Group Member to the
extent such payments could be made as Restricted Payments under Sections 8.5(g),
(h) and (i); and
          (r) all other transactions entered into pursuant to the reasonable
requirements of the business of such Group Member upon fair and reasonable terms
substantially as favorable to such Group Member as would be obtained in a
comparable arm’s length transaction with a Person not an Affiliate of any Group
Member.
          Section 8.10 Third-Party Restrictions on Indebtedness, Liens,
Investments or Restricted Payments. No Group Member shall incur or otherwise
suffer to exist or become effective any Contractual Obligation limiting the
ability of (a) any Subsidiary of Holdings to make Restricted Payments to, or
loans or advances to, or repay Indebtedness or Sell property to, any Group
Member which is a direct or indirect parent entity of such Subsidiary or (b) any
Group Member to incur or suffer to exist any Lien upon any property of any Group
Member, whether
 

97

--------------------------------------------------------------------------------

 

now owned or hereafter acquired, securing any of its Obligations (including any
“equal and ratable” clause and any similar Contractual Obligation requiring,
when a Lien is granted on any property, another Lien to be granted on such
property or any other property), except, for each of clauses (a) and (b) above,
(i) in connection with any document or instrument governing Liens permitted
pursuant to Section 8.2(d) (provided that any such restriction contained therein
relates only to the Property or Properties subject to such permitted Liens),
(ii) Contractual Obligations that exist on the Signing Date and (to the extent
not otherwise permitted by this Section 8.10 are listed on Schedule 8.10 hereto)
any refinancings and extensions of any such Contractual Obligations if the terms
and conditions thereof, taken as a whole, do not materially expand the scope of
such limitation, (iii) Contractual Obligations representing Indebtedness of a
Group Member that is not a Guarantor to the extent such Indebtedness is
permitted by Section 8.1, (iv) Contractual Obligations that are customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted under this Agreement, that is applicable solely to
such joint venture, (v) Contractual Obligations that are binding on a Group
Member at the time such Group Member first becomes a Group Member, so long as
such Contractual Obligations were not entered into in contemplation of such
Person becoming a Group Member, (vi) Contractual Obligations that arise pursuant
to agreements entered into with respect to any sale, transfer, lease or other
disposition of Property or a Person permitted by Section 8.4 and apply solely to
the Property or Person to be so sold, transferred, leased or otherwise disposed
of, (vii) Contractual Obligations that are customary restrictions on leases,
subleases, licenses or asset sale agreements otherwise permitted hereby so long
as such restrictions relate only to the Property subject thereto,
(viii) Contractual Obligations that are customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of a Group
Member, (ix) Contractual Obligations that are customary provisions restricting
assignment of an agreement entered into in the Ordinary Course of Business,
(x) customary net worth provisions contained in real property leases entered
into by a Group Member, so long as the Borrowers have determined in good faith
that such net worth provisions could not reasonably be expected to impair the
ability of the Group Members to meet their respective ongoing obligations and
(xi) restrictions contained in the Loan Documents.
          Section 8.11 Modification of Certain Documents. No Group Member shall
do any of the following:
          (a) waive or otherwise modify any term of any Constituent Document of
any Loan Party (including the terms of any of their outstanding Stock or Stock
Equivalents), except for those modifications and waivers that do not adversely
affect the interests of the Lenders;
          (b) waive or otherwise modify any term of any Subordinated Note
Document if the effect thereof is to (i) increase the yield other than as
expressly permitted under the Subordination Agreement, (ii) change the due dates
for principal or interest, other than to extend such dates, (iii) modify any
default or event of default, other than to delete it or make it less
restrictive, (iv) add any covenant with respect thereto, (v) modify any
subordination provision, (vi) modify any redemption or prepayment provision,
other than to extend the dates therefor or to reduce the premiums payable in
connection therewith or (vii) increase any obligation of any Group Member or
confer additional rights to the holders of the Subordinated Notes in a manner
materially adverse to any Group Member or any Secured Party;
          (c) waive or otherwise modify any term of any Material Agreement
except for those modifications and waivers that would not reasonably be expected
to have a Material Adverse Effect; and
 

98

--------------------------------------------------------------------------------

 

          (d) permit any Indebtedness (other than the Obligations) to qualify as
“Senior Debt” or any similar concept under the Subordinated Note Documents or
permit the Obligations to cease qualifying as such.
          Section 8.12 Fiscal Year. No Group Member shall change its Fiscal Year
or its method for determining Fiscal Quarters or fiscal months.
          Section 8.13 Margin Regulations. No Group Member shall use all or any
portion of the proceeds of any credit extended hereunder to purchase or carry
margin stock (within the meaning of Regulation U of the Federal Reserve Board)
in contravention of Regulation U of the Federal Reserve Board.
          Section 8.14 Compliance with ERISA. No ERISA Affiliate shall cause or
suffer to exist (a) any event that could result in the imposition of a Lien with
respect to any Title IV Plan or Multiemployer Plan or (b) any other ERISA Event,
that would, in the aggregate, be reasonably expected to have a Material Adverse
Effect. No Group Member shall cause or suffer to exist any event that could
result in the imposition of a Lien with respect to any Benefit Plan.
          Section 8.15 Hazardous Materials. No Group Member shall cause or allow
any Release of any Hazardous Material at, to or from any real property owned,
leased, subleased or otherwise operated or occupied by any Group Member that
would violate any Environmental Law, form the basis for any Environmental
Liabilities, other than such violations, Environmental Liabilities and effects
that would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Notwithstanding anything contained in this Article 8, during the period
commencing on the Signing Date until, but excluding, the Closing Date, the Group
Members shall not be obligated to comply with the covenants in this Article 8 to
the extent such covenants would result in a breach of or cause a default under
any other Contractual Obligation to which the Group Members are party which was
(i) in place on the Signing Date, (ii) not entered into in contemplation of
entering into this Agreement or the other Loan Documents and (iii) not a
Contractual Obligation to which only the Group Members are a party.
ARTICLE 9
EVENTS OF DEFAULT
          Section 9.1 Definition. Each of the following shall be an Event of
Default:
          (a) the Borrowers shall fail to pay (i) any principal of any Loan or
any L/C Reimbursement Obligation when the same becomes due and payable or
(ii) any interest on any Loan, any fee under any Loan Document or any other
Obligation (other than those set forth in clause (i) above) and, in the case of
this clause (ii), such non-payment continues for a period of five (5) days after
the due date therefor; or
          (b) any representation, warranty or certification made or deemed made
by any Loan Party (or any Responsible Officer thereof) in any Loan Document
shall prove to have been incorrect in any material respect (without duplication
of any materiality qualifier contained herein or therein) when made or deemed
made; or
 

99

--------------------------------------------------------------------------------

 

          (c) any Loan Party shall fail to comply with (i) any provision of
Article 5 (Financial Covenants), Section 6.2(a)(i) (Other Events), Section 7.1
(Maintenance of Corporate Existence), Section 7.9 (Use of Proceeds) or Article 8
(Negative Covenants), (ii) any provision of Section 6.1 (Financial Statements)
if, in the case of this clause (ii), such failure shall remain unremedied for
15 days after the earlier of (A) the date on which a Responsible Officer of any
Loan Party becomes aware of such failure and (B) the date on which notice
thereof shall have been given to the Borrower Representative by the
Administrative Agent or (iii) any other provision of any Loan Document if, in
the case of this clause (iii), such failure shall remain unremedied for 30 days
after the earlier of (A) the date on which a Responsible Officer of any Loan
Party becomes aware of such failure and (B) the date on which notice thereof
shall have been given to the Borrower Representative by the Administrative
Agent; or
          (d) (i) any Group Member shall fail to make any payment when due
(whether due because of scheduled maturity, required prepayment provisions,
acceleration, demand or otherwise) on any Indebtedness of any Group Member
(other than the Obligations or any Hedging Agreement) and, in each case, such
failure relates to Indebtedness having a principal amount of $5,000,000 or more,
(ii) any other event shall occur or condition shall exist under any Contractual
Obligation relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness, (iii) any such Indebtedness shall become or be declared to be
due and payable, or be required to be prepaid, redeemed, defeased or repurchased
in full prior to the stated maturity thereof or the holder thereof has the right
to require such redemption, defeasance or repurchase or (iv) any default has
occurred under any Subordinated Note Documents (after giving effect to all
notice and cure periods with respect thereto; or
          (e) (i) any Group Member shall generally not pay its debts as such
debts become due, shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors,
(ii) any proceeding shall be instituted by or against any Group Member seeking
to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, composition of it
or its debts or any similar order, in each case under any Requirement of Law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee, conservator, liquidating agent, liquidator, other similar
official or other official with similar powers, in each case for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against (but not by or with the consent of) any Group Member, either
such proceedings shall remain undismissed or unstayed for a period of 60 days or
more or any action sought in such proceedings shall occur (including without
limitation any entry of an order for relief in any such proceeding) or (iii) any
Group Member shall take any corporate or similar action to authorize any action
described in clause (i) or (ii) above; or
          (f) one or more judgments, orders or decrees (or other similar
process) shall be rendered against any Group Member (i)(A) in the case of
monetary judgments, orders and decrees, involving an aggregate amount (excluding
amounts adequately covered by insurance payable to any Group Member, to the
extent the relevant insurer has not denied coverage therefor) in excess of
$5,000,000 or (B) in the case of non-monetary judgments, that would have, in the
aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings shall
have been commenced by any creditor upon any such judgment, order or decree or
(B) such judgment, order or decree shall not have been vacated or discharged for
a period of 45 consecutive days and there
 

100

--------------------------------------------------------------------------------

 

shall not be in effect (by reason of a pending appeal or otherwise) any stay of
enforcement thereof; or
          (g) except pursuant to a valid, binding and enforceable termination or
release permitted under the Loan Documents and executed by the Administrative
Agent or as otherwise expressly permitted under any Loan Document, (i) any
material provision of any Loan Document shall, at any time after the delivery of
such Loan Document, fail to be valid and binding on, or enforceable (other than
pursuant to the express terms thereof) against, or shall be revoked or
repudiated by any Loan Party party thereto, (ii) any Loan Document purporting to
grant a Lien to secure any Obligation shall, at any time after the delivery of
such Loan Document, fail to create a valid and enforceable Lien on any
Collateral with an aggregate value in excess of $500,000 purported to be covered
thereby or such Lien shall fail or cease to be a perfected Lien with the
priority required in the relevant Loan Document (other than as a result of the
failure of the Administrative Agent to take any action within its control) or
(iii) any contractual subordination provision in any Subordinated Note Document
shall, in whole or in part, terminate or otherwise fail or cease to be valid and
binding on, or enforceable against, any holder of the Subordinated Notes, (or
such holder shall so state in writing), or any Group Member shall state in
writing that any of the events described in clause (i), (ii) or (iii) above
shall have occurred; or
          (h) any Material Agreement shall be terminated for any reason unless
(i) such Material Agreement is replaced with an agreement that is not materially
less favorable to the Group Members, (ii) existing Material Agreements provide
substantially the same benefits as such terminated Material Agreement as are
necessary for the proper conduct of such Group Member’s business as conducted as
of the date of such termination, (iii) such Group Member has an alternative
source of obtaining such benefits (including by internal development) or
(iv) the termination of such Material Agreement could not reasonably be expected
to have a Material Adverse Effect; or
          (i) any Holding Company shall incur any Indebtedness or issue any
Stock or Stock Equivalent and use the proceeds of such incurrence or issuance to
make dividend, payment or other distribution with respect to the holders of its
Stock or Stock Equivalents;
          (j) there shall occur any Change of Control; or
          (k) either (i) one or more ERISA Events shall have occurred,
(ii) there is or arises an Unfunded Pension Liability with respect to any Title
IV Plan, or (iii) there is or arises any potential Withdrawal Liability, if any
ERISA Affiliate were to withdraw completely from one or more Multiemployer
Plans, and the liability of any ERISA Affiliate contemplated by the foregoing
clauses (i), (ii) and (iii), either individually or in the aggregate, has had,
or would reasonably be expected to have, a Material Adverse Effect.
          Section 9.2 Remedies. During the continuance of any Event of Default,
the Administrative Agent may, and, at the request of the Required Lenders,
shall, in each case by notice to the Borrower Representative and in addition to
any other right or remedy provided under any Loan Document or by any applicable
Requirement of Law, do each of the following: (a) declare all or any portion of
the Revolving Credit Commitments terminated, whereupon the Revolving Credit
Commitments shall immediately be reduced by such portion or, in the case of a
termination in whole, shall terminate together with any obligation any Lender
may have hereunder to make any Loan and any L/C Issuer may have hereunder to
Issue any Letter of Credit or (b) declare immediately due and payable all or
part of any Obligation (including any accrued
 

101

--------------------------------------------------------------------------------

 

but unpaid interest thereon), whereupon the same shall become immediately due
and payable, without presentment, demand, protest or further notice or other
requirements of any kind, all of which are hereby expressly waived by Holdings
and each Borrower (and, to the extent provided in any other Loan Document, other
Loan Parties); provided, however, that, effective immediately upon the
occurrence of the Events of Default specified in Section 9.1(e)(ii), (x) the
Revolving Credit Commitment of each Lender to make Loans and the commitment of
each L/C Issuer to Issue Letters of Credit shall each automatically be
terminated and (y) each Obligation (including in each case any accrued all
accrued but unpaid interest thereon) shall automatically become and be due and
payable, without presentment, demand, protest or further notice or other
requirement of any kind, all of which are hereby expressly waived by Holdings
and each Borrower (and, to the extent provided in any other Loan Document, any
other Loan Party).
          Section 9.3 Actions in Respect of Letters of Credit. At any time
(i) upon the Revolving Credit Termination Date, (ii) after the Revolving Credit
Termination Date when the aggregate funds on deposit in L/C Cash Collateral
Accounts shall be less than 102% of the L/C Obligations for all Letters of
Credit at such time and (iii) as required by Section 2.12, the Borrowers shall
pay to the Administrative Agent in immediately available funds at the
Administrative Agent’s office referred to in Section 11.11, for deposit in a L/C
Cash Collateral Account, the amount required so that, after such payment, the
aggregate funds on deposit in the L/C Cash Collateral Accounts equals or exceeds
102% of the L/C Obligations for all Letters of Credit at such time (not to
exceed, in the case of clause (iii) above, the payment to be applied pursuant to
Section 2.12 to provide cash collateral for Letters of Credit).
          Section 9.4 Cash Collateral Accounts. The Administrative Agent shall
not have any responsibility for, or bear any risk of loss of, any investment or
income of any funds in any Cash Collateral Account. From time to time after
funds are deposited in any Cash Collateral Account, the Administrative Agent may
apply funds then held in such Cash Collateral Account to the payment of
Obligations in accordance with Section 2.12. No Group Member and no Person
claiming on behalf of or through any Group Member shall have any right to demand
payment of any funds held in any Cash Collateral Account at any time prior to
the termination of all Commitments and the payment in full of all Obligations
and, in the case of L/C Cash Collateral Accounts, the termination of all
outstanding Letters of Credit.
ARTICLE 10
THE ADMINISTRATIVE AGENT
          Section 10.1 Appointment and Duties. (a) Appointment of Administrative
Agent. Each Lender and each L/C Issuer hereby appoints GE Capital (together with
any successor Administrative Agent pursuant to Section 10.9) as the
Administrative Agent hereunder and authorizes the Administrative Agent to
(i) execute and deliver the Loan Documents and accept delivery thereof on its
behalf from any Group Member, (ii) take such action on its behalf and to
exercise all rights, powers and remedies and perform the duties as are expressly
delegated to the Administrative Agent under such Loan Documents and
(iii) exercise such powers as are reasonably incidental thereto.
          (b) Duties as Collateral and Disbursing Agent. Without limiting the
generality of clause (a) above, the Administrative Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders and L/C Issuers),
and is hereby authorized, to (i) act as the disbursing and collecting agent for
the Lenders and the L/C Issuers with respect to
 

102

--------------------------------------------------------------------------------

 

all payments and collections arising in connection with the Loan Documents
(including in any proceeding described in Section 9.1(e)(ii) or any other
bankruptcy, insolvency or similar proceeding), and each Person making any
payment in connection with any Loan Document to any Secured Party is hereby
authorized to make such payment to the Administrative Agent, (ii) file and prove
claims and file other documents necessary or desirable to allow the claims of
the Secured Parties with respect to any Obligation in any proceeding described
in Section 9.1(e)(ii) or any other bankruptcy, insolvency or similar proceeding
(but not to vote, consent or otherwise act on behalf of such Secured Party),
(iii) act as collateral agent for each Secured Party for purposes of the
perfection of all Liens created by such agreements and all other purposes stated
therein, (iv) manage, supervise and otherwise deal with the Collateral, (v) take
such other action as is necessary or desirable to maintain the perfection and
priority of the Liens created or purported to be created by the Loan Documents,
(vi) except as may be otherwise specified in any Loan Document, exercise all
remedies given to the Administrative Agent and the other Secured Parties with
respect to the Collateral, whether under the Loan Documents, applicable
Requirements of Law or otherwise and (vii) execute any amendment, consent or
waiver under the Loan Documents on behalf of any Lender that has consented in
writing to such amendment, consent or waiver; provided, however, that the
Administrative Agent hereby appoints, authorizes and directs each Lender and L/C
Issuer to act as collateral sub-agent for the Administrative Agent, the Lenders
and the L/C Issuers for purposes of the perfection of all Liens with respect to
the Collateral, including any deposit account maintained by a Loan Party with,
and cash and Cash Equivalents held by, such Lender or L/C Issuer, and may
further authorize and direct the Lenders and the L/C Issuers to take further
actions as collateral sub-agents for purposes of enforcing such Liens or
otherwise to transfer the Collateral subject thereto to the Administrative
Agent, and each Lender and L/C Issuer hereby agrees to take such further actions
to the extent, and only to the extent, so authorized and directed.
          (c) Limited Duties. Under the Loan Documents, the Administrative Agent
(i) is acting solely on behalf of the Lenders and the L/C Issuers (except to the
limited extent provided in Section 2.14(b) with respect to the Register and in
Section 10.11), with duties that are entirely administrative in nature,
notwithstanding the use of the defined term “Administrative Agent”, the terms
“agent”, “administrative agent” and “collateral agent” and similar terms in any
Loan Document to refer to the Administrative Agent, which terms are used for
title purposes only, (ii) is not assuming any obligation under any Loan Document
other than as expressly set forth therein or any role as agent, fiduciary or
trustee of or for any Lender, L/C Issuer or any other Secured Party and
(iii) shall have no implied functions, responsibilities, duties, obligations or
other liabilities under any Loan Document, and each Lender and L/C Issuer hereby
waives and agrees not to assert any claim against the Administrative Agent based
on the roles, duties and legal relationships expressly disclaimed in clauses (i)
through (iii) above.
          Section 10.2 Binding Effect. Each Lender and each L/C Issuer agrees
that (i) any action taken by the Administrative Agent or the Required Lenders
(or, if expressly required hereby, a greater proportion of the Lenders) in
accordance with the provisions of the Loan Documents, (ii) any action taken by
the Administrative Agent in reliance upon the instructions of Required Lenders
(or, where so required, such greater proportion) and (iii) the exercise by the
Administrative Agent or the Required Lenders (or, where so required, such
greater proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Secured Parties.
 

103

--------------------------------------------------------------------------------

 

          Section 10.3 Use of Discretion. (a) No Action without Instructions.
The Administrative Agent shall not be required to exercise any discretion or
take, or to omit to take, any action, including with respect to enforcement or
collection, except any action it is required to take or omit to take (i) under
any Loan Document or (ii) pursuant to instructions from the Required Lenders
(or, where expressly required by the terms of this Agreement, a greater
proportion of the Lenders).
          (b) Right Not to Follow Certain Instructions. Notwithstanding clause
(a) above, the Administrative Agent shall not be required to take, or to omit to
take, any action (i) unless, upon demand, the Administrative Agent receives an
indemnification satisfactory to it from the Lenders (or, to the extent
applicable and acceptable to the Administrative Agent, any other Secured Party)
against all Liabilities that, by reason of such action or omission, may be
imposed on, incurred by or asserted against the Administrative Agent or any
Related Person thereof or (ii) that is, in the opinion of the Administrative
Agent or its counsel, contrary to any Loan Document or applicable Requirement of
Law.
          Section 10.4 Delegation of Rights and Duties. The Administrative Agent
may, upon any term or condition it specifies, delegate or exercise any of its
rights, powers and remedies under, and delegate or perform any of its duties or
any other action with respect to, any Loan Document by or through any trustee,
co-agent, employee, attorney-in-fact and any other Person (including any Secured
Party). Any such Person shall benefit from this Article 10 to the extent
provided by the Administrative Agent.
          Section 10.5 Reliance and Liability. (a) The Administrative Agent may,
without incurring any liability hereunder, (i) treat the payee of any Note as
its holder until such Note has been assigned in accordance with Section 11.2(b),
(ii) rely on the Register to the extent set forth in Section 2.14, (iii) consult
with any of its Related Persons and, whether or not selected by it, any other
advisors, accountants and other experts (including advisors to, and accountants
and experts engaged by, any Loan Party) and (iv) rely and act upon any document
and information (including those transmitted by Electronic Transmission) and any
telephone message or conversation, in each case believed by it to be genuine and
transmitted, signed or otherwise authenticated by the appropriate parties.
          (b) None of the Administrative Agent and its Related Persons shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with any Loan Document, and each Lender, L/C Issuer, Holdings and
each Borrower hereby waive and shall not assert (and Holdings and each Borrower
shall cause each other Loan Party to waive and agree not to assert) any right,
claim or cause of action based thereon, except to the extent of liabilities
resulting primarily from the gross negligence or willful misconduct of the
Administrative Agent or, as the case may be, such Related Person (each as
determined in a final, non-appealable judgment by a court of competent
jurisdiction) in connection with the duties expressly set forth herein. Without
limiting the foregoing, the Administrative Agent:
          (i) shall not be responsible or otherwise incur liability for any
action or omission taken in reliance upon the instructions of the Required
Lenders or for the actions or omissions of any of its Related Persons selected
with reasonable care (other than employees, officers and directors of the
Administrative Agent, when acting on behalf of the Administrative Agent);
 

104

--------------------------------------------------------------------------------

 

          (ii) shall not be responsible to any Secured Party for the due
execution, legality, validity, enforceability, effectiveness, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any Lien
created or purported to be created under or in connection with, any Loan
Document;
          (iii) makes no warranty or representation, and shall not be
responsible, to any Secured Party for any statement, document, information,
representation or warranty made or furnished by or on behalf of any Related
Person or any Loan Party in connection with any Loan Document or any transaction
contemplated therein or any other document or information with respect to any
Loan Party, whether or not transmitted or (except for documents expressly
required under any Loan Document to be transmitted to the Lenders) omitted to be
transmitted by the Administrative Agent, including as to completeness, accuracy,
scope or adequacy thereof, or for the scope, nature or results of any due
diligence performed by the Administrative Agent in connection with the Loan
Documents; and
          (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any provision of any Loan Document, whether any
condition set forth in any Loan Document is satisfied or waived, as to the
financial condition of any Loan Party or as to the existence or continuation or
possible occurrence or continuation of any Default or Event of Default and shall
not be deemed to have notice or knowledge of such occurrence or continuation
unless it has received a notice from the Borrower Representative, any Lender or
L/C Issuer describing such Default or Event of Default clearly labeled “notice
of default” (in which case the Administrative Agent shall promptly give notice
of such receipt to all Lenders);
and, for each of the items set forth in clauses (i) through (iv) above, each
Lender, L/C Issuer, Holdings and each Borrower hereby waives and agrees not to
assert (and Holdings and each Borrower shall cause each other Loan Party to
waive and agree not to assert) any right, claim or cause of action it might have
against the Administrative Agent based thereon.
          Section 10.6 The Administrative Agent Individually. The Administrative
Agent and its Affiliates may make loans and other extensions of credit to,
acquire Stock and Stock Equivalents of, engage in any kind of business with, any
Loan Party or Affiliate thereof as though it were not acting as the
Administrative Agent and may receive separate fees and other payments therefor.
To the extent the Administrative Agent or any of its Affiliates makes any Loan
or otherwise becomes a Lender hereunder, it shall have and may exercise the same
rights and powers hereunder and shall be subject to the same obligations and
liabilities as any other Lender and the terms “Lender”, “Revolving Credit
Lender”, “Term Loan Lender”, “Required Lender”, “Required Revolving Lender” and
“Required Term Lender” and any similar terms shall, except where otherwise
expressly provided in any Loan Document, include, without limitation, the
Administrative Agent or such Affiliate, as the case may be, in its individual
capacity as Lender, Revolving Credit Lender, Term Loan Lender or as one of the
Required Lenders, Required Revolving Lenders or Required Term Lenders,
respectively.
          Section 10.7 Lender Credit Decision. Each Lender and each L/C Issuer
acknowledges that it shall, independently and without reliance upon the
Administrative Agent, any Lender or L/C Issuer or any of their Related Persons
or upon any document (including the Disclosure Documents) solely or in part
because such document was transmitted by the Administrative Agent or any of its
Related Persons, conduct its own independent investigation of
 

105

--------------------------------------------------------------------------------

 

the financial condition and affairs of each Loan Party and make and continue to
make its own credit decisions in connection with entering into, and taking or
not taking any action under, any Loan Document or with respect to any
transaction contemplated in any Loan Document, in each case based on such
documents and information as it shall deem appropriate. Except for documents
expressly required by any Loan Document to be transmitted by the Administrative
Agent to the Lenders or L/C Issuers, the Administrative Agent shall not have any
duty or responsibility to provide any Lender or L/C Issuer with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Loan Party or any
Affiliate of any Loan Party that may come in to the possession of the
Administrative Agent or any of its Related Persons.
          Section 10.8 Expenses; Indemnities. (a) Each Lender agrees to
reimburse the Administrative Agent and each of its Related Persons (to the
extent not reimbursed by any Loan Party) promptly upon demand for such Lender’s
Pro Rata Share with respect to the Facilities of any reasonable costs and
expenses (including fees, charges and disbursements of financial, legal and
other advisors and Other Taxes paid in the name of, or on behalf of, any Loan
Party) that may be incurred by the Administrative Agent or any of its Related
Persons in connection with the preparation, syndication, execution, delivery,
administration, modification, consent, waiver or enforcement (whether through
negotiations, through any work-out, bankruptcy, restructuring or other legal or
other proceeding or otherwise) of, or legal advice in respect of its rights or
responsibilities under, any Loan Document.
          (b) Each Lender further agrees to indemnify the Administrative Agent
and each of its Related Persons (to the extent not reimbursed by any Loan
Party), from and against such Lender’s aggregate Pro Rata Share with respect to
the Facilities of the Liabilities (including taxes, interests and penalties
imposed for not properly withholding or backup withholding on payments made to
on or for the account of any Lender) that may be imposed on, incurred by or
asserted against the Administrative Agent or any of its Related Persons in any
matter relating to or arising out of, in connection with or as a result of any
Loan Document, any Related Document or any other act, event or transaction
related, contemplated in or attendant to any such document, or, in each case,
any action taken or omitted to be taken by the Administrative Agent or any of
its Related Persons under or with respect to any of the foregoing; provided,
however, that no Lender shall be liable to the Administrative Agent or any of
its Related Persons to the extent such liability has resulted from the gross
negligence, bad faith or willful misconduct of the Administrative Agent or, as
the case may be, such Related Person, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order.
          Section 10.9 Resignation of the Administrative Agent or L/C Issuer.
(a) The Administrative Agent may resign at any time by delivering notice of such
resignation to the Lenders and the Borrower Representative 30 days prior to the
effective date of resignation set forth in such notice; provided, however, that
such notice requirement shall be waived to the extent the Administrative Agent
is deemed to have resigned pursuant to Section 2.18(c). If the Administrative
Agent delivers any such notice, the Required Lenders shall have the right to
appoint a successor Administrative Agent. If, within 30 days after the retiring
Administrative Agent having given notice of resignation, no successor
Administrative Agent has been appointed, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent from
among the Lenders (provided such Lender accepts such appointment). Each
appointment under this clause (a) shall be subject to the prior consent of the
Borrowers,
 

106

--------------------------------------------------------------------------------

 

which may not be unreasonably withheld but shall not be required during the
continuance of a Default.
          (b) Effective immediately upon its resignation, (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents, (ii) the Lenders shall assume and perform all of the duties
of the Administrative Agent until a successor Administrative Agent shall have
accepted a valid appointment hereunder, (iii) the retiring Administrative Agent
and its Related Persons shall no longer have the benefit of any provision of any
Loan Document other than with respect to any actions taken or omitted to be
taken while such retiring Administrative Agent was, or because such
Administrative Agent had been, validly acting as the Administrative Agent under
the Loan Documents and (iv) subject to its rights under Section 10.3, the
retiring Administrative Agent shall take such action as may be reasonably
necessary to assign to the successor Administrative Agent its rights as the
Administrative Agent under the Loan Documents. Effective immediately upon its
acceptance of a valid appointment as the Administrative Agent, a successor
Administrative Agent shall succeed to, and become vested with, all the rights,
powers, privileges and duties of the retiring Administrative Agent under the
Loan Documents.
          (c) Any L/C Issuer may resign at any time by delivering notice of such
resignation to the Administrative Agent, effective on the date set forth in such
notice. Upon such resignation, the L/C Issuer shall remain an L/C Issuer and
shall retain its rights and obligations in its capacity as such (other than any
obligation to Issue Letters of Credit but including the right to receive fees or
to have Lenders participate in any L/C Reimbursement Obligation thereof) with
respect to Letters of Credit issued by such L/C Issuer prior to the date of such
resignation and shall otherwise be discharged from all other duties and
obligations under the Loan Documents.
          Section 10.10 Release of Collateral or Guarantors. Each Lender and L/C
Issuer hereby consents to the release and hereby directs the Administrative
Agent to release (or, in the case of clause (b)(ii) below, release or
subordinate) the following:
          (a) any Subsidiary of Holdings from its guaranty of any Obligation of
any Loan Party if all of the Securities of such Subsidiary owned by any Group
Member are Sold in a Sale permitted under the Loan Documents (including pursuant
to a waiver or consent) to a Person that is not a Group Member; and
          (b) any Lien held by the Administrative Agent for the benefit of the
Secured Parties against (i) any Collateral that is Sold by a Loan Party in a
Sale permitted by the Loan Documents (including pursuant to a valid waiver or
consent), to a Person that is not a Group Member, (ii) any property subject to a
Lien permitted hereunder in reliance upon Section 8.2(d) or (e) and (iii) all of
the Collateral and all Loan Parties, upon in the case of this clause (iii), (A)
termination of the Commitments, (B) payment and satisfaction in full of all
Loans, all L/C Reimbursement Obligations and all other Obligations that the
Administrative Agent has been notified in writing by the holder of such
Obligation are then due and payable or will become due and payable as a result
of the termination of the Credit Agreement or the release of Liens under the
Loan Documents, (C) deposit of cash collateral with respect to all L/C
Obligations and other asserted contingent Obligations (or, in the case of any
L/C Obligations, a back-up letter of credit has been issued) in amounts and on
terms and conditions and with parties satisfactory to the Administrative Agent
and each Indemnitee that is owed such Obligations and (D) to the extent
requested by the Administrative Agent, receipt by the Administrative Agent of
liability releases
 

107

--------------------------------------------------------------------------------

 

from the Loan Parties each in form and substance reasonably acceptable to the
Administrative Agent.
Each Lender and L/C Issuer hereby directs the Administrative Agent, and the
Administrative Agent hereby agrees, upon receipt of reasonable advance notice
from the Borrower Representative, to execute and deliver or file such documents
and to perform other actions reasonably necessary to release the guaranties and
Liens when and as directed in this Section 10.10.
          Section 10.11 Additional Secured Parties. The benefit of the
provisions of the Loan Documents directly relating to the Collateral or any Lien
granted thereunder shall extend to and be available to any Secured Party that is
not a Lender or L/C Issuer as long as, by accepting such benefits, such Secured
Party agrees, as among the Administrative Agent and all other Secured Parties,
that such Secured Party is bound by (and, if requested by the Administrative
Agent, shall confirm such agreement in a writing in form and substance
acceptable to the Administrative Agent) this Article 10, Section 11.8 (Right of
Setoff), Section 11.9 (Sharing of Payments) and Section 11.20 (Confidentiality)
and the decisions and actions of the Administrative Agent and the Required
Lenders (or, where expressly required by the terms of this Agreement, a greater
proportion of the Lenders) to the same extent a Lender is bound; provided,
however, that, notwithstanding the foregoing, (a) such Secured Party shall be
bound by Section 10.8 only to the extent of Liabilities, costs and expenses with
respect to or otherwise relating to the Collateral held for the benefit of such
Secured Party, in which case the obligations of such Secured Party thereunder
shall not be limited by any concept of Pro Rata Share or similar concept,
(b) except as set forth specifically herein, each of the Administrative Agent,
the Lenders and the L/C Issuers shall be entitled to act at its sole discretion,
without regard to the interest of such Secured Party, regardless of whether any
Obligation to such Secured Party thereafter remains outstanding, is deprived of
the benefit of the Collateral, becomes unsecured or is otherwise affected or put
in jeopardy thereby, and without any duty or liability to such Secured Party or
any such Obligation and (c) except as set forth specifically herein, such
Secured Party shall not have any right to be notified of, consent to, direct,
require or be heard with respect to, any action taken or omitted in respect of
the Collateral or under any Loan Document.
          Section 10.12 Joint Lead Arrangers, Bookrunners and Other Agents.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Joint Lead Arrangers, Bookrunners,
Documentation Agent and Syndication Agent shall not have any duties or
responsibilities, nor shall the Joint Lead Arrangers, Bookrunners, Documentation
Agent or Syndication Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Joint Lead Arrangers, Bookrunners,
Documentation Agent or Syndication Agent. At any time that any Lender serving
(or whose Affiliate is serving) as a Joint Lead Arranger, Bookrunner,
Documentation Agent or Syndication Agent shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Loans and the
Revolving Loan Commitment, such Lender (or an Affiliate of such Lender acting as
a Joint Lead Arranger, a Bookrunner, Documentation Agent or Syndication Agent,
shall be deemed to have concurrently resigned as such Joint Lead Arranger,
Bookrunner, Documentation Agent and/or Syndication Agent.
 

108

--------------------------------------------------------------------------------

 

ARTICLE 11
MISCELLANEOUS
          Section 11.1 Amendments, Waivers, Etc. (a) No amendment or waiver of
any provision of any Loan Document (other than the Fee Letter, the Control
Agreements, the L/C Reimbursement Agreements and the Secured Hedging Agreements)
and no consent to any departure by any Loan Party therefrom shall be effective
unless the same shall be in writing and signed (1) in the case of an amendment,
consent or waiver to grant a new Lien for the benefit of the Secured Parties or
extending an existing Lien over additional property, by the Administrative Agent
and the Borrowers or (2) in the case of any other amendment, waiver or consent,
by the Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and the Borrowers or, in the case of any Loan Documents other
than this Agreement, the applicable Loan Party or Loan Parties; provided,
however, that no amendment, consent or waiver described in clause (2) above
shall, unless in writing and signed by each Lender directly affected thereby (or
by the Administrative Agent with the consent of such Lender), in addition to any
other Person the signature of which is otherwise required pursuant to any Loan
Document, do any of the following:
          (i) increase the Commitment of such Lender (it being understood that a
waiver of any condition precedent set forth in Article 3, or waiver of any
Default or Event of Default, mandatory prepayment or mandatory reduction of the
Commitments, shall not constitute an increase of the Commitment of any Lender);
          (ii) reduce (including through release, forgiveness, assignment or
otherwise) (A) the principal amount of, the interest rate on, any outstanding
Loan owing to such Lender, (B) any fee or accrued interest payable to such
Lender hereunder or (C) any L/C Reimbursement Obligation; provided, however,
that this clause (ii) does not apply to (x) any reduction in incremental
interest or fees payable pursuant to Sections 2.9(c) or 2.11(b) during the
continuance of an Event of Default or to any payment of any such incremental
interest or fees or (y) any modification to any financial covenant set forth in
Article 5 or in any definition set forth therein or principally used therein;
          (iii) waive or postpone any scheduled maturity date or other scheduled
date fixed for the payment, in whole or in part, of principal of or interest on
any Loan or fee owing to such Lender or for the termination of such Lender’s
Revolving Credit Commitment; provided, however, that this clause (iii) does not
apply to any change to mandatory prepayments, including those required under
Section 2.8;
          (iv) except as provided in Section 10.10, release all or substantially
all of the Collateral or all or substantially all of the Guarantors from their
guaranty of the Obligations of the Borrowers;
          (v) reduce or increase the proportion of Lenders required for the
Lenders (or any subset thereof) to take any action hereunder or change the
definition of the terms “Required Lenders”, “Pro Rata Share” or “Pro Rata
Outstandings”; or
          (vi) amend Section 11.9 (Sharing of Payments), Section 2.12
(Application of Payments) or this Section 11.1;
 

109

--------------------------------------------------------------------------------

 

it being agreed that all Lenders shall be deemed to be directly affected by an
amendment, consent or waiver of the type described in the preceding clauses (v)
and (vi), and provided, further, that (x)(A) any waiver of any payment applied
pursuant to Section 2.12(b) (Application of Mandatory Prepayments) to, and any
modification of the application of any such payment to, (1) the Term Loans shall
require the consent of the Required Term Lenders and (2) the Revolving Credit
Outstandings shall require the consent of the Required Revolving Lenders,
(B) any change to the definition of the term “Required Term Lender” shall
require the consent of the Required Term Lenders and (C) any change to the
definition of the term “Required Revolving Lender” shall require the consent of
the Required Revolving Lenders and (y) no amendment, waiver or consent shall
affect the rights or duties under any Loan Document of, or any payment to, the
Administrative Agent (or otherwise modify any provision of Article 10 or the
application thereof), the Swingline Lender, any L/C Issuer or any SPV that has
been granted an option pursuant to Section 11.2(f) unless in writing and signed
by the Administrative Agent, the Swingline Lender, such L/C Issuer or, as the
case may be, such SPV in addition to any signature otherwise required and
(z) the consent of the Borrowers shall not be required to change any order of
priority set forth in Section 2.12(b) and (c). To the extent any Secured Hedging
Agreement is provided or arranged by the Administrative Agent or an Affiliate
thereof or any Lender or an Affiliate thereof, no amendment, modification or
waiver of this Agreement or any Loan Document altering the ratable treatment of
Obligations arising under such Secured Hedging Agreement resulting in such
Obligations being junior in right of payment to principal of the Loans or
resulting in Obligations owing to any Secured Hedging Counterparty being
unsecured (other than releases of Liens in accordance with the terms hereof,
including upon payment in full in cash of all Obligations (other than Contingent
Loan Document Obligations) and termination of all Commitments) shall be
effective without the written consent of the Administrative Agent or such
Lender, as applicable. Notwithstanding the foregoing or anything else set forth
herein to the contrary, no Sponsor Affiliated Lender shall have any voting or
consent rights with respect to any matter under or with respect to any Loan
Document or constitute a “Lender”, “Term Loan Lender” or a “Revolving Credit
Lender” (or be, or have its Loans and Commitments, included in the determination
of “Required Lenders”, “Required Term Lenders”, “Required Revolving Lenders” or
“Lenders directly affected”) under or with respect to any provisions in any Loan
Document governing voting or consent rights, provided that (A) the Commitment of
a Sponsor Affiliated Lender may not be increased or extended, (B) the principal
of a Sponsor Affiliated Lender’s Loans may not be reduced or forgiven, and
(C) the interest rate applicable to Obligations owing to a Sponsor Affiliated
Lender may not be reduced in such a manner that by its terms affects such Lender
more adversely than other Lenders in such Facility, in each case without the
consent of such Lender.
          (b) Each waiver or consent under any Loan Document shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on any Loan Party shall entitle any Loan Party to
any notice or demand in the same, similar or other circumstances. No failure on
the part of any Secured Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
          Section 11.2 Assignments and Participations; Binding Effect. (a)
Binding Effect. This Agreement shall become effective when it shall have been
executed by Holdings, the Borrowers and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender and L/C Issuer that
such Lender or L/C Issuer has executed it.
 

110

--------------------------------------------------------------------------------

 

Thereafter, it shall be binding upon and inure to the benefit of, but only to
the benefit of, Holdings, the Borrowers (in each case except for Article 10),
the Administrative Agent, each Lender and L/C Issuer and, to the extent provided
in Section 10.11, each other Indemnitee and Secured Party and, in each case,
their respective successors and permitted assigns. Except as expressly provided
in any Loan Document (including in Section 10.9), none of Holdings, the
Borrowers, any L/C Issuer or the Administrative Agent shall have the right to
assign any rights or obligations hereunder or any interest herein.
          (b) Right to Assign. Each Lender may sell, transfer, negotiate or
assign all or a portion of its rights and obligations hereunder (including all
or a portion of its Revolving Credit Commitments and its rights and obligations
with respect to Loans and Letters of Credit) to (i) any existing Lender other
than a Non-Funding Lender or Impacted Lender, (ii) any Affiliate or Approved
Fund of any existing Lender which is under common control with such Lender
(other than a Non-Funding Lender or Impacted Lender) or (iii) any other Person
(each an “Eligible Assignee”); provided, however, that no assignment shall be
permitted without the approval (which approval shall not be unreasonably
withheld or delayed or required with respect to any sale, transfer or assignment
of the Term Loans under clauses (i) or (ii) above) of (A) the Administrative
Agent and (B) in the absence of an Event of Default, the Borrowers; provided,
further, however, that (x) for each Facility, the aggregate outstanding
principal amount (determined as of the effective date of the applicable
Assignment) of the Loans, Revolving Credit Commitments and L/C Obligations
subject to any such Sale shall be in a minimum amount of $1,000,000, unless such
Sale is made to an existing Lender or an Affiliate or Approved Fund of an
existing Lender, is of the assignor’s entire interest in such Facility or is
made with the prior consent of the Borrowers and the Administrative Agent,
(y) such Sales by Lenders who are Non-Funding Lenders due to clause (a) of the
definition of Non-Funding Lenders shall be subject to the Administrative Agent’s
prior written consent in all instances, unless in connection with such Sale,
such Non-Funding Lender cures, or causes the cure of, its Non-Funding Lender
status as contemplated in Section 2.2(c)(iv) and (z) in no event shall Sponsor
Affiliated Lenders be permitted to acquire or hold more than 10% of the
outstanding Term Loans in the aggregate or any of the Revolving Credit
Commitments, Revolving Loans or L/C Obligations. No sale shall be made to a
Group Member or an Affiliate of a Group Member (other than a Sponsor Affiliated
Lender), and the Administrative Agent’s refusal to accept a Sale to a Group
Member or an Affiliate of a Group Member (other than a Sponsor Affiliated
Lender), a holder of a Subordinated Note or any Affiliate of such a holder, or
to any Person that would be a Non-Funding Lender or an Impacted Lender, or the
imposition of conditions or limitations (including limitations on voting) upon
Sales to such Persons, shall not be deemed to be unreasonable. Sponsor
Affiliated Lenders shall have no rights to receive notice of, attend or
participate in any meetings with other Lenders or the Administrative Agent,
receive information requested or prepared on behalf of the Agent and other
Lender, or otherwise have any rights of a Lender hereunder, other than the right
to receive payments required hereunder.
          (c) Procedure. The parties to each Sale made in reliance on clause (b)
above (other than those described in clause (e) or (f) below) shall execute and
deliver to the Administrative Agent an Assignment via an electronic settlement
system designated by the Administrative Agent (or if previously agreed with the
Administrative Agent, via a manual execution and delivery of the assignment)
evidencing such Sale, together with any existing Note subject to such Sale (or
any affidavit of loss therefor acceptable to the Administrative Agent), any tax
forms required to be delivered pursuant to Section 2.17(f) and payment of an
assignment fee in the amount of $3,500; provided that (1) if a Sale by a Lender
is made to an Affiliate or an
 

111

--------------------------------------------------------------------------------

 

Approved Fund of such assigning Lender, then no assignment fee shall be due in
connection with such Sale, and (2) if a Sale by a Lender is made to an assignee
that is not an Affiliate or Approved Fund of such assignor Lender, and
concurrently to one or more Affiliates or Approved Funds of such assignee, then
only one assignment fee of $3,500 shall be due in connection with such Sale.
Upon receipt of all the foregoing, and conditioned upon such receipt and, if
such assignment is made in accordance with Section 11.2(b)(iii), upon the
Administrative Agent (and the Borrowers, if applicable) consenting to such
Assignment, from and after the effective date specified in such Assignment, the
Administrative Agent shall record or cause to be recorded in the Register the
information contained in such Assignment.
          (d) Effectiveness. Subject to the recording of an Assignment by the
Administrative Agent in the Register pursuant to Section 2.14(b), (i) the
assignee thereunder shall become a party hereto and, to the extent that rights
and obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment, shall have the rights and obligations of a Lender,
(ii) any applicable Note shall be transferred to such assignee through such
entry and (iii) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the termination of
the Revolving Credit Commitments and the payment in full of the Obligations) and
be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment covering all or the remaining portion of an assigning
Lender’s rights and obligations under the Loan Documents, such Lender shall
cease to be a party hereto except that each Lender agrees to remain bound by
Article 10, Section 11.8 (Right of Setoff) and Section 11.9 (Sharing of
Payments) to the extent provided in Section 10.11 (Additional Secured Parties)).
          (e) Grant of Security Interests. In addition to the other rights
provided in this Section 11.2, each Lender may grant a security interest in, or
otherwise assign as collateral, any of its rights under this Agreement, whether
now owned or hereafter acquired (including rights to payments of principal or
interest on the Loans), to (A) any federal reserve bank (pursuant to
Regulation A of the Federal Reserve Board) or any central bank, without notice
to the Administrative Agent or (B) any holder of, or trustee for the benefit of
the holders of, such Lender’s Securities by notice to the Administrative Agent;
provided, however, that no such holder or trustee, whether because of such grant
or assignment or any foreclosure thereon (unless such foreclosure is made
through an assignment in accordance with clause (b) above), shall be entitled to
any rights of such Lender hereunder and no such Lender shall be relieved of any
of its obligations hereunder.
          (f) Participants and SPVs. In addition to the other rights provided in
this Section 11.2, each Lender may, (x) with notice to the Administrative Agent,
grant to an SPV the option to make all or any part of any Loan that such Lender
would otherwise be required to make hereunder (and the exercise of such option
by such SPV and the making of Loans pursuant thereto shall satisfy the
obligation of such Lender to make such Loans hereunder) and such SPV may assign
to such Lender the right to receive payment with respect to any Obligation and
(y) without notice to or consent from the Administrative Agent or the Borrowers
or Borrower
 

112

--------------------------------------------------------------------------------

 

Representative, sell participations to one or more Persons in or to all or a
portion of its rights and obligations under the Loan Documents (including all
its rights and obligations with respect to the Term Loans, Revolving Loans and
Letters of Credit); provided, however, that, whether as a result of any term of
any Loan Document or of such grant or participation, (i) no such SPV or
participant shall have a commitment, or be deemed to have made an offer to
commit, to make Loans hereunder, and, except as provided in the applicable
option agreement, none shall be liable for any obligation of such Lender
hereunder, (ii) such Lender’s rights and obligations, and the rights and
obligations of the Loan Parties and the Secured Parties towards such Lender,
under any Loan Document shall remain unchanged and each other party hereto shall
continue to deal solely with such Lender, which shall remain the holder of the
Obligations in the Register, except that (A) each such participant and SPV shall
be entitled to the benefit of Sections 2.16 (Breakage Costs; Increased Costs;
Capital Requirements) and 2.17 (Taxes), but only to the extent such participant
or SPV delivers the tax forms such Lender is required to collect pursuant to
Section 2.17(f) and then only to the extent of any amount to which such Lender
would be entitled in the absence of any such grant or participation and (B) each
such SPV may receive other payments that would otherwise be made to such Lender
with respect to Loans funded by such SPV to the extent provided in the
applicable option agreement and set forth in a notice provided to the
Administrative Agent by such SPV and such Lender; provided, however, that in no
case (including pursuant to clause (A) or (B) above) shall an SPV or participant
have the right to enforce any of the terms of any Loan Document, and (iii) the
consent of such SPV or participant shall not be required (either directly, as a
restraint on such Lender’s ability to consent hereunder or otherwise) for any
amendments, waivers or consents with respect to any Loan Document or to exercise
or refrain from exercising any powers or rights such Lender may have under or in
respect of the Loan Documents (including the right to enforce or direct
enforcement of the Obligations), except for those described in clauses (ii) and
(iii) of Section 11.1(a) with respect to amounts, or dates fixed for payment of
amounts, to which such participant or SPV would otherwise be entitled and, in
the case of participants, except for those described in Section 11.1(a)(iv) (or
amendments, consents and waivers with respect to Section 10.10 to release all or
substantially all of the Collateral). Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers,
maintain a register on which it enters the name and address of each participant
and the principal amounts (and stated interest) of each participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”). The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.
          Section 11.3 Costs and Expenses. Any action taken by any Loan Party
under or with respect to any Loan Document, even if required under any Loan
Document or at the request of any Secured Party, shall be at the expense of such
Loan Party, and no Secured Party shall be required under any Loan Document to
reimburse any Loan Party or Group Member therefor except as expressly provided
therein. In addition, the Borrowers agree to pay or reimburse upon demand
(a) the Administrative Agent for all reasonable out-of-pocket costs and expenses
incurred by it or any of its Related Persons in connection with the
investigation, development, preparation, negotiation, syndication, execution,
interpretation or administration of, any modification of any term of or
termination of, any Loan Document, any commitment or proposal letter therefor
executed prior to the date hereof, any other document prepared in connection
therewith or the consummation and administration of any transaction contemplated
therein (including fees, charges and disbursements of legal counsel to the
Administrative Agent or such Related Persons, periodic insurance review expenses
and expenses related to Intralinks®
 

113

--------------------------------------------------------------------------------

 

or any other E-System), (b) the Administrative Agent for all reasonable costs
and expenses incurred by it or any of its Related Persons in connection with
internal audit reviews, field examinations and Collateral examinations done with
the prior consent of the Borrower Representative unless an Event of Default
exists (which shall be reimbursed, in addition to the out-of-pocket costs and
expenses of such examiners, at the per diem rate per individual charged by the
Administrative Agent for its examiners), (c) each of the Administrative Agent,
its Related Persons and each L/C Issuer for all costs and expenses incurred in
connection with (i) any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a “work-out”, (ii) the enforcement or
preservation of any right or remedy under any Loan Document, any Obligation,
with respect to the Collateral or any other related right or remedy or (iii) the
commencement, defense, conduct of, intervention in, or the taking of any other
action with respect to, any proceeding (including any bankruptcy or insolvency
proceeding) related to any Group Member, Loan Document, Obligation or Related
Transaction (or the response to and preparation for any subpoena or request for
document production relating thereto), including fees and disbursements of
counsel and (d) fees and disbursements of one law firm on behalf of all Lenders
(other than the Administrative Agent) incurred in connection with any matters
referred to in clause (c) above.
          Section 11.4 Indemnities. (a) The Borrowers agree to indemnify, hold
harmless and defend the Administrative Agent, each Lender, each L/C Issuer, each
Person that each L/C Issuer causes to Issue Letters of Credit hereunder and each
of their respective Related Persons (each such Person being an “Indemnitee”)
from and against all Liabilities (including brokerage commissions, fees and
other compensation) that may be imposed on, incurred by or asserted against any
such Indemnitee in any matter relating to or arising out of, in connection with
or as a result of (i) any Loan Document, any Related Document, any Disclosure
Document, any Obligation (or the repayment thereof), any Letter of Credit, the
use or intended use of the proceeds of any Loan or the use of any Letter of
Credit, any Related Transaction, or any securities filing of, or with respect
to, any Group Member, (ii) any commitment letter, proposal letter or term sheet
in connection with any of the foregoing and any Contractual Obligation entered
into in connection with any E-Systems or other Electronic Transmissions,
(iii) any actual or prospective investigation, litigation or other proceeding in
connection with any of the foregoing, whether or not brought by any such
Indemnitee or any of its Related Persons, any holders of Securities or creditors
(and including reasonable and documented attorneys’ fees in any case), whether
or not any such Indemnitee, Related Person, holder or creditor is a party
thereto, and whether or not based on any securities or commercial law or
regulation or any other Requirement of Law or theory thereof, including common
law, equity, contract, tort or otherwise, or (iv) any other act, event or
transaction related, contemplated in or attendant to any of the foregoing
(collectively, the “Indemnified Matters”); provided, however, that the Borrowers
shall not have any liability under this Section 11.4 to any Indemnitee with
respect to any Indemnified Matters, to the extent such liability has resulted
from the gross negligence, bad faith or willful misconduct of such Indemnitee,
as determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Any amounts payable under this Section shall be without
duplication of any amounts payable in respect of Taxes under Section 2.17.
          (b) Without limiting the foregoing, “Indemnified Matters” includes all
Environmental Liabilities, including those arising from, or otherwise involving,
any property of any Related Person or any actual, alleged or prospective damage
to property or natural resources or harm or injury alleged to have resulted from
any Release of Hazardous Materials on, upon or into such property or natural
resource or any property on or contiguous to any real property of any Related
Person, whether or not, with respect to any such Environmental Liabilities, any
Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in
possession, the successor-in-interest to any Related Person or the owner, lessee
or operator of any property of
 

114

--------------------------------------------------------------------------------

 

any Related Person through any foreclosure action, in each case except to the
extent such Environmental Liabilities (i) are incurred solely following
foreclosure by any Secured Party or following any Secured Party having become
the successor-in-interest to any Loan Party and (ii) are attributable solely to
acts of such Indemnitee.
          Section 11.5 Survival. Any indemnification or other protection
provided to any Indemnitee pursuant to any Loan Document (including pursuant to
Section 2.17 (Taxes), Section 2.16 (Breakage Costs; Increased Costs; Capital
Requirements), Article 10 (The Administrative Agent), Section 11.3 (Costs and
Expenses), Section 11.4 (Indemnities) or this Section 11.5) shall (A) survive
the termination of the Commitments and the payment in full of other Obligations
and (B) inure to the benefit of any Person that at any time held a right
thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and
permitted assigns.
          Section 11.6 Limitation of Liability for Certain Damages. In no event
shall any Indemnitee be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including any loss of profits,
business or anticipated savings). Holdings and each Borrower hereby waives,
releases and agrees (and shall cause each other Loan Party to waive, release and
agree) not to sue upon any such claim for any special, indirect, consequential
or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
          Section 11.7 Lender-Creditor Relationship. The relationship between
the Lenders, the L/C Issuers and the Administrative Agent, on the one hand, and
the Loan Parties, on the other hand, is solely that of lender and creditor. No
Secured Party has any fiduciary relationship or duty to any Loan Party arising
out of or in connection with, and there is no agency, tenancy or joint venture
relationship between the Secured Parties and the Loan Parties by virtue of, any
Loan Document or any transaction contemplated therein.
          Section 11.8 Right of Setoff. Each of the Administrative Agent, each
Lender, each L/C Issuer and each Affiliate (including each branch office
thereof) of any of them is hereby authorized, without notice or demand (each of
which is hereby waived by Holdings and each Borrower), at any time and from time
to time during the continuance of any Event of Default and to the fullest extent
permitted by applicable Requirements of Law, to set off and apply any and all
deposits (whether general or special, time or demand, provisional or final) at
any time held and other Indebtedness, claims or other obligations at any time
owing by the Administrative Agent, such Lender, such L/C Issuer or any of their
respective Affiliates to or for the credit or the account of Holdings or the
Borrowers against any Obligation of any Loan Party now or hereafter existing,
whether or not any demand was made under any Loan Document with respect to such
Obligation and even though such Obligation may be unmatured. Each of the
Administrative Agent, each Lender and each L/C Issuer agrees promptly to notify
the Borrower Representative and the Administrative Agent after any such setoff
and application made by such Lender or its Affiliates; provided, however, that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights under this Section 11.8 are in addition to any other
rights and remedies (including other rights of setoff) that the Administrative
Agent, the Lenders and the L/C Issuers and their Affiliates and other Secured
Parties may have.
 

115

--------------------------------------------------------------------------------

 

          Section 11.9 Sharing of Payments, Etc. If any Lender, directly or
through an Affiliate or branch office thereof, obtains any payment of any
Obligation of any Loan Party (whether voluntary, involuntary or through the
exercise of any right of setoff or the receipt of any Collateral or “proceeds”
(as defined under the applicable UCC) of Collateral) other than pursuant to
Sections 2.16 (Breakage Costs; Increased Costs; Capital Requirements), 2.17
(Taxes) and 2.18 (Substitution of Lenders) and such payment exceeds the amount
such Lender would have been entitled to receive if all payments had gone to, and
been distributed by, the Administrative Agent in accordance with the provisions
of the Loan Documents, such Lender shall purchase for cash from other Secured
Parties such participations in their Obligations as necessary for such Lender to
share such excess payment with such Secured Parties to ensure such payment is
applied as though it had been received by the Administrative Agent and applied
in accordance with this Agreement (or, if such application would then be at the
discretion of the Borrowers, applied to repay the Obligations in accordance
herewith); provided, however, that (a) if such payment is rescinded or otherwise
recovered from such Lender or L/C Issuer in whole or in part, such purchase
shall be rescinded and the purchase price therefor shall be returned to such
Lender or L/C Issuer without interest and (b) such Lender shall, to the fullest
extent permitted by applicable Requirements of Law, be able to exercise all its
rights of payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation. If a Non-Funding Lender receives
any such payment as described in the previous sentence, such Lender shall turn
over such payments to the Administrative Agent in an amount that would satisfy
the cash collateral requirements set forth in Section 2.2(c). For the avoidance
of doubt, this Section shall not apply to assignments and participations to the
extent allowed under this Agreement.
          Section 11.10 Marshaling; Payments Set Aside. No Secured Party shall
be under any obligation to marshal any property in favor of any Loan Party or
any other party or against or in payment of any Obligation. To the extent that
any Secured Party receives a payment from any Borrower, from the proceeds of the
Collateral, from the exercise of its rights of setoff, any enforcement action or
otherwise, and such payment is subsequently, in whole or in part, invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not occurred.
          Section 11.11 Notices. (a) Addresses. All notices, demands, requests,
directions and other communications required or expressly authorized to be made
by this Agreement shall, whether or not specified to be in writing but unless
otherwise expressly specified to be given by any other means, be given in
writing and (i) addressed to (A) if to Holdings or any Borrower, to MedQuist,
Inc. as Borrower Representative, Attention: Mark Sullivan, General Counsel, 1000
Bishops Gate Blvd., Suite 300, Mt. Laurel, New Jersey 08054, Tel:
(856) 206-4210, Fax: (856) 206-4211, with copy to Simpson Thacher & Bartlett
LLP, 425 Lexington Avenue, New York, New York 10017, Attention: Marissa C.
Wesely Tel: (212) 455-7173, Fax: (212) 455-2502, (B) if to the Administrative
Agent or the Swingline Lender, to General Electric Capital Corporation, 500 West
Monroe, Chicago, IL 60661, Attention: MedQuist Account Manager, Tel:
(312) 441-7976, Fax: (866) 524-4721, with copy to General Electric Capital
Corporation, Two Bethesda Metro Center, Suite 600, Bethesda, MD 20814 Attention:
Noah Hochstadt, Senior Counsel and Vice President, Tel: (301) 664-9893, Fax:
(866) 398-9582 and (C) otherwise to the party to be notified at its address
specified opposite its name on the signature page of any applicable Assignment,
(ii) posted to Intralinks® (to the extent such
 

116

--------------------------------------------------------------------------------

 

system is available and set up by or at the direction of the Administrative
Agent prior to posting) in an appropriate location by uploading such notice,
demand, request, direction or other communication to www.intralinks.com, faxing
it to 866-545-6600 with an appropriate bar-coded fax coversheet or using such
other means of posting to Intralinks® as may be available and reasonably
acceptable to the Administrative Agent prior to such posting, (iii) posted to
any other E-System set up by or at the direction of the Administrative Agent in
an appropriate location or (iv) addressed to such other address as shall be
notified in writing (A) in the case of the Borrowers, the Administrative Agent
and the Swingline Lender, to the other parties hereto and (B) in the case of all
other parties, to the Borrowers and the Administrative Agent. Transmission by
electronic mail (including E-Fax, even if transmitted to the fax numbers set
forth in clause (i) above) shall not be sufficient or effective to transmit any
such notice under this clause (a) unless such transmission is an available means
to post to any E-System. Notwithstanding the foregoing, materials required to be
delivered pursuant to Sections 6.1(a), 6.1(b), 6.1(c) and 6.3 shall be deemed
delivered to the Administrative Agent (and deemed distributed to the Lenders by
the Administrative Agent) on the date on which Holdings or the Borrowers cause
such materials to be posted on the Internet at www.sec.gov or at such other
website identified by the Borrower Representative in a written notice to the
Administrative Agent and the Lenders and that is accessible by the Lenders
without charge.
          (b) Effectiveness. All communications described in clause (a) above
and all other notices, demands, requests and other communications made in
connection with this Agreement shall be effective and be deemed to have been
received (i) if delivered by hand, upon personal delivery, (ii) if delivered by
overnight courier service, one (1) Business Day after delivery to such courier
service, (iii) if delivered by mail, when deposited in the mails, (iv) if
delivered by facsimile (other than to post to an E-System pursuant to clause
(a)(ii) or (a)(iii) above), upon sender’s receipt of confirmation of proper
transmission, and (v) if delivered by posting to any E-System, on the later of
the date of such posting in an appropriate location and the date access to such
posting is given to the recipient thereof in accordance with the standard
procedures applicable to such E-System; provided, however, that no
communications to the Administrative Agent pursuant to Article 2 or Article 10
shall be effective until received by the Administrative Agent.
          Section 11.12 Electronic Transmissions. (a) Authorization. Subject to
the provisions of Section 11.11(a), each of the Administrative Agent, the
Borrowers, the Lenders, the L/C Issuers and each of their Related Persons is
authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein. Each of Holdings,
each Borrower and each Secured Party hereby acknowledges and agrees, and
Holdings and each Borrower shall cause each other Group Member to acknowledge
and agree, that the use of Electronic Transmissions is not necessarily secure
and that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes and accepts
such risks by hereby authorizing the transmission of Electronic Transmissions.
          (b) Signatures. Subject to the provisions of Section 11.11(a), (i)(A)
no posting to any E-System shall be denied legal effect merely because it is
made electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a “signature” and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a “writing”,
in each case including pursuant to any Loan Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global
 

117

--------------------------------------------------------------------------------

 

and National Commerce Act and any substantive or procedural Requirement of Law
governing such subject matter, (ii) each such posting that is not readily
capable of bearing either a signature or a reproduction of a signature may be
signed, and shall be deemed signed, by attaching to, or logically associating
with such posting, an E-Signature, upon which each Secured Party and Loan Party
may rely and assume the authenticity thereof, (iii) each such posting containing
a signature, a reproduction of a signature or an E-Signature shall, for all
intents and purposes, have the same effect and weight as a signed paper original
and (iv) each party hereto or beneficiary hereto agrees not to contest the
validity or enforceability of any posting on any E-System or E-Signature on any
such posting under the provisions of any applicable Requirement of Law requiring
certain documents to be in writing or signed; provided, however, that nothing
herein shall limit such party’s or beneficiary’s right to contest whether any
posting to any E-System or E-Signature has been altered after transmission.
          (c) Separate Agreements. All uses of an E-System shall be governed by
and subject to, in addition to Section 11.11 and this Section 11.12, separate
terms and conditions posted or referenced in such E-System and related
Contractual Obligations executed by Secured Parties and Group Members in
connection with the use of such E-System.
          (d) Limitation of Liability. All E-Systems and Electronic
Transmissions shall be provided “as is” and “as available”. None of the
Administrative Agent or any of its Related Persons warrants the accuracy,
adequacy or completeness of any E-Systems or Electronic Transmission, and each
disclaims all liability for errors or omissions therein. No warranty of any kind
is made by the Administrative Agent or any of its Related Persons in connection
with any E-Systems or Electronic Communication, including any warranty of
merchantability, fitness for a particular purpose, non-infringement of
third-party rights or freedom from viruses or other code defects. Holdings, each
Borrower and each Secured Party agrees (and Holdings and each Borrower shall
cause each other Loan Party to agree) that the Administrative Agent has no
responsibility for maintaining or providing any equipment, software, services or
any testing required in connection with any Electronic Transmission or otherwise
required for any E-System.
          Section 11.13 Governing Law. This Agreement, each other Loan Document
that does not expressly set forth its applicable law, and the rights and
obligations of the parties hereto and thereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
          Section 11.14 Jurisdiction. (a) Submission to Jurisdiction. Any legal
action or proceeding with respect to any Loan Document shall be brought
exclusively in the courts of the State of New York located in the City of New
York, Borough of Manhattan, or of the United States of America for the Southern
District of New York and, by execution and delivery of this Agreement, each
party hereto hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts; provided that
nothing in this Agreement shall limit the right of the Administrative Agent to
commence any proceeding in the federal or state courts of any other jurisdiction
to the extent the Administrative Agent determines that such action is necessary
or appropriate to exercise its rights or remedies under the Loan Documents. The
parties hereto (and, to the extent set forth in any other Loan Document, each
other Loan Party) hereby irrevocably waive any objection, including any
objection to the laying of venue or based on the grounds of forum non
conveniens, that any of them may now or hereafter have to the bringing of any
such action or proceeding in such jurisdictions.
 

118

--------------------------------------------------------------------------------

 

          (b) Service of Process. Holdings and each Borrower (and, to the extent
set forth in any other Loan Document, each other Loan Party) hereby irrevocably
waives personal service of any and all legal process, summons, notices and other
documents and other service of process of any kind and consents to such service
in any suit, action or proceeding brought in the United States of America with
respect to or otherwise arising out of or in connection with any Loan Document
by any means permitted by applicable Requirements of Law, including by the
mailing thereof (by registered or certified mail, postage prepaid) to the
address of the Borrower Representative specified in Section 11.11 (and shall be
effective when such mailing shall be effective, as provided therein). Holdings
and each Borrower (and, to the extent set forth in any other Loan Document, each
other Loan Party) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
          Section 11.15 Waiver of Jury Trial. Each party hereto hereby
irrevocably waives trial by jury in any suit, action or proceeding with respect
to, or directly or indirectly arising out of, under or in connection with, any
Loan Document or the transactions contemplated therein or related thereto
(whether founded in contract, tort or any other theory). Each party hereto (A)
certifies that no other party and no Related Person of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (B) acknowledges
that it and the other parties hereto have been induced to enter into the Loan
Documents, as applicable, by the mutual waivers and certifications in this
Section 11.15.
          Section 11.16 Severability. Any provision of any Loan Document being
held illegal, invalid or unenforceable in any jurisdiction shall not affect any
part of such provision not held illegal, invalid or unenforceable, any other
provision of any Loan Document or any part of such provision in any other
jurisdiction.
          Section 11.17 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties in separate
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.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart. Delivery of an executed signature page of this
Agreement by facsimile transmission or Electronic Transmission shall be as
effective as delivery of a manually executed counterpart hereof.
          Section 11.18 Entire Agreement. The Loan Documents embody the entire
agreement of the parties and supersede all prior agreements and understandings
relating to the subject matter thereof and any prior letter of interest,
commitment letter, fee letter, confidentiality and similar agreements involving
any Loan Party and any of the Administrative Agent, any Lender or any L/C Issuer
or any of their respective Affiliates relating to a financing of substantially
similar form, purpose or effect. In the event of any conflict between the terms
of this Agreement and any other Loan Document, the terms of this Agreement shall
govern (unless such terms of such other Loan Documents are necessary to comply
with applicable Requirements of Law, in which case such terms shall govern to
the extent necessary to comply therewith).
          Section 11.19 Use of Name. Holdings and each Borrower agrees, and
shall cause each other Loan Party to agree, that it shall not, and none of its
Affiliates shall, issue any press release or other public disclosure (other than
any document required to be filed with any Governmental Authority under the
securities laws) using the name, logo or otherwise referring to
 

119

--------------------------------------------------------------------------------

 

GE Capital or of any of its Affiliates, without at least two (2) Business Days’
prior notice to GE Capital and without the prior consent of GE Capital except to
the extent required to do so under applicable Requirements of Law.
          Section 11.20 Non-Public Information; Confidentiality. (a) Each Lender
and L/C Issuer acknowledges and agrees that it may receive material non-public
information hereunder concerning the Loan Parties and their Affiliates and
Securities and agrees to use such information in compliance with all relevant
policies, procedures and Contractual Obligations and applicable Requirements of
Laws (including United States federal and state security laws and regulations).
          (b) Each Lender, L/C Issuer and the Administrative Agent agrees to use
all reasonable efforts to maintain, in accordance with its customary practices,
the confidentiality of information obtained by it pursuant to any Loan Document
and designated in writing by any Loan Party as confidential, except that such
information may be disclosed (i) with the Borrower Representative’s consent,
(ii) to Related Persons of such Lender, L/C Issuer or the Administrative Agent,
as the case may be, or to any Person that any L/C Issuer causes to Issue Letters
of Credit hereunder, that are advised of the confidential nature of such
information and are instructed to keep such information confidential, (iii) to
the extent such information presently is or hereafter becomes available to such
Lender, L/C Issuer or the Administrative Agent, as the case may be, on a
non-confidential basis from a source other than any Loan Party, (iv) to the
extent disclosure is required by applicable Requirements of Law or other legal
process or requested or demanded by any Governmental Authority, (v) to the
extent necessary or customary for inclusion in league table measurements or in
any tombstone or other advertising materials (and the Loan Parties consent to
the publication of such tombstone or other advertising materials by the
Administrative Agent, any Lender, any L/C Issuer or any of their Related
Persons), (vi) to the National Association of Insurance Commissioners or any
similar organization, any examiner or any nationally recognized rating agency or
otherwise to the extent consisting of general portfolio information that does
not identify borrowers, (vii) to current or prospective assignees, SPVs,
grantees of any option described in Section 11.2(f) or participants, direct or
contractual counterparties to any Hedging Agreement permitted hereunder and to
their respective Related Persons, in each case to the extent such assignees,
participants, counterparties or Related Persons agree to be bound by provisions
substantially similar to the provisions of this Section 11.20 and (viii) in
connection with the exercise of any remedy under any Loan Document. In the event
of any conflict between the terms of this Section 11.20 and those of any other
Contractual Obligation entered into with any Loan Party (whether or not a Loan
Document), the terms of this Section 11.20 shall govern.
          Section 11.21 Patriot Act Notice. Each Lender subject to the USA
Patriot Act of 2001 (31 U.S.C. 5318 et seq.) (the “Patriot Act”) hereby notifies
the Borrowers that, pursuant to Section 326 thereof, such Lender is required to
obtain, verify and record information that identifies each Borrower, including
the name and address of such Borrower and other information allowing such Lender
to identify such Borrower in accordance with such act.
ARTICLE 12
CROSS-GUARANTY
          Section 12.1 Cross-Guaranty. Each Borrower hereby agrees that such
Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to the Administrative Agent and the Lenders and their
respective successors and assigns, the full
 

120

--------------------------------------------------------------------------------

 

and prompt payment (whether at stated maturity, by acceleration or otherwise)
and performance of, all Obligations owed or hereafter owing to Agent and the
Lenders by each other Borrower (“Guaranteed Obligations”). Each Borrower agrees
that its guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this Article 12
shall not be discharged until payment and performance, in full, of the
Obligations has occurred, and that its obligations under this Article 12 shall
be absolute and unconditional, irrespective of, and unaffected by:
          (a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
          (b) the absence of any action, against any Person other than such
Borrower, to enforce this Agreement (including this Article 12) or any other
Loan Document or the waiver or consent by the Administrative Agent and the
Lenders with respect to any of the provisions thereof;
          (c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by the Administrative Agent and the Lenders in respect thereof
(including the release of any such security);
          (d) the insolvency of any Loan Party; or
          (e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Guaranteed Obligations.
          Section 12.2 Waivers by Borrowers. Each Borrower expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel the Administrative Agent or the
Lenders to marshal assets or to proceed in respect of the Obligations guaranteed
hereunder against any other Loan Party, any other party or against any security
for the payment and performance of the Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, such Borrower. It is agreed
among each Borrower, the Administrative Agent and the Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan Documents and that, but for the provisions of this Article 12 and
such waivers, the Administrative Agent and the Lenders would decline to enter
into this Agreement.
          Section 12.3 Benefit of Guaranty. Each Borrower agrees that the
provisions of this Article 12 are for the benefit of the Administrative Agent
and the Lenders and their respective successors, transferees, endorsees and
assigns, and nothing herein contained shall impair, as between any other
Borrower and the Administrative Agent or the Lenders, the obligations of such
other Borrower under the Loan Documents.
          Section 12.4 Subordination of Subrogation, Etc. Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, and
except as set forth in Section 12.7, each Borrower hereby expressly and
irrevocably subordinates to payment of the Obligations any and all rights at law
or in equity to subrogation, reimbursement, exoneration, contribution,
 

121

--------------------------------------------------------------------------------

 

indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are paid in full in
cash and the applicable preference period has passed. Each Borrower acknowledges
and agrees that this subordination is intended to benefit the Administrative
Agent and the Lenders and shall not limit or otherwise affect such Borrower’s
liability hereunder or the enforceability of this Article 12, and that the
Administrative Agent, the Lenders and their respective successors and assigns
are intended third party beneficiaries of the waivers and agreements set forth
in this Section 12.4.
          Section 12.5 Election of Remedies. If the Administrative Agent or any
Lender may, under applicable law, proceed to realize its benefits under any of
the Loan Documents giving the Administrative Agent or such Lender a Lien upon
any Collateral, whether owned by any Borrower or by any other Person, either by
judicial foreclosure or by non judicial sale or enforcement, the Administrative
Agent or any Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of its rights and remedies under this
Article 12. If, in the exercise of any of its rights and remedies, the
Administrative Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to “election of
remedies” or the like, each Borrower hereby consents to such action by the
Administrative Agent or such Lender and waives any claim based upon such action,
even if such action by the Administrative Agent or such Lender shall result in a
full or partial loss of any rights of subrogation that such Borrower might
otherwise have had but for such action by the Administrative Agent or such
Lender. Any election of remedies that results in the denial or impairment of the
right of the Administrative Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower’s obligation to pay the
full amount of the Obligations. In the event the Administrative Agent or any
Lender shall bid at any foreclosure or trustee’s sale or at any private sale
permitted by law or the Loan Documents, the Administrative Agent or such Lender
may bid all or less than the amount of the Obligations and the amount of such
bid need not be paid by the Administrative Agent or such Lender but shall be
credited against the Obligations. The amount of the successful bid at any such
sale, whether the Administrative Agent, Lender or any other party is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Article 12, notwithstanding that any present
or future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which the Administrative Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
          Section 12.6 Limitation. Notwithstanding any provision herein
contained to the contrary, each Borrower’s liability under this Article 12
(which liability is in any event in addition to amounts for which such Borrower
is primarily liable under Article 2) shall be limited to an amount not to exceed
as of any date of determination the greater of:
          (a) the net amount of all Loans advanced to any other Borrower under
this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
          (b) the amount that could be claimed by the Administrative Agent and
the Lenders from such Borrower under this Article 12 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or
 

122

--------------------------------------------------------------------------------

 

common law after taking into account, among other things, such Borrower’s right
of contribution and indemnification from each other Borrower under Section 12.7.
          Section 12.7 Contribution with Respect to Guaranty Obligations.
          (a) To the extent that any Borrower shall make a payment under this
Article 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a “Guarantor Payment”) that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower’s “Allocable Amount”
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
payment in full in cash of the Obligations, termination of the Commitments and
the passage of the applicable preference period, such Borrower shall be entitled
to receive contribution and indemnification payments from, and be reimbursed by,
each other Borrower for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.
          (b) As of any date of determination, the “Allocable Amount” of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Article 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
          (c) This Section 12.7 is intended only to define the relative rights
of the Borrowers and nothing set forth in this Section 12.7 is intended to or
shall impair the obligations of the Borrowers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to such Borrower and accrued interest, Fees and expenses
with respect thereto for which such Borrower shall be primarily liable.
          (d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrowers to which such
contribution and indemnification is owing.
          (e) The rights of the indemnifying Borrowers against other Loan
Parties under this Section 12.7 shall be exercisable upon the full and payment
of the Obligations, the termination of the Commitments and the passage of the
applicable preference period.
          Section 12.8 Liability Cumulative. The liability of the Borrowers
under this Article 12 is in addition to and shall be cumulative with all
liabilities of each Borrower to the Administrative Agent and the Lenders under
this Agreement and the other Loan Documents to which such Borrower is a party or
in respect of any Obligations or obligation of the other Borrower, without any
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.
[SIGNATURE PAGES FOLLOW]
 

123

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

            CBAY INC.
    AS BORROWER
      By:   /s/ Clyde Swoger       Name:   Clyde Swoger       Title:   Chief
Financial Officer       MEDQUIST INC.
    AS BORROWER
      By:   /s/ Mark Sullivan       Name:   Mark Sullivan       Title:   General
Counsel       MEDQUIST TRANSCRIPTIONS, LTD.
    AS BORROWER
      By:   /s/ Mark Sullivan       Name:   Mark Sullivan       Title:   General
Counsel       CBAYSYSTEMS HOLDINGS LIMITED
    AS HOLDINGS
      By:   /s/ Clyde Swoger       Name:   Clyde Swoger       Title:   Chief
Financial Officer  

 

--------------------------------------------------------------------------------

 

         

            GENERAL ELECTRIC CAPITAL CORPORATION
   AS THE ADMINISTRATIVE AGENT, L/C
   ISSUER, SWINGLINE LENDER AND LENDER
      By:   /s/ Brent Shepherd       Name:   Brent Shepherd       Title:   Duly
Authorized Signatory  

 

--------------------------------------------------------------------------------

 

         

            OTHER LENDERS:

SUNTRUST BANK, as Lender
      By:   /s/ J. Ben Cumming       Name:   J. Ben Cumming        Title:   Vice
President  

 

--------------------------------------------------------------------------------

 

         

            ING CAPITAL LLC, as Lender
      By:   /s/ Mike Garvin       Name:   Mike Garvin       Title:   Managing
Director  

 

--------------------------------------------------------------------------------

 

         

            REGIONS BANK, as Lender
      By:   /s/ Kay Yarbrough       Name:   Kay Yarbrough       Title:   Vice
President  

 

--------------------------------------------------------------------------------

 

         

            CAPITALSOURCE BANK, as Lender
      By:   /s/ J. Stephen Klose       Name:   J. Stephen Klose        Title:  
Bank Officer  

 

--------------------------------------------------------------------------------

 

         

            ROYAL BANK OF CANADA, as Lender
      By:   /s/ Mustafa S. Topiwalla       Name:   Mustafa S. Topiwalla      
Title:   Authorized Signatory  

 

--------------------------------------------------------------------------------

 

         

            FIFTH THIRD BANK, as Lender
      By:   /s/ Jeffrey A. Thieman       Name:   Jeffrey A. Thieman      
Title:   Vice President    

 

--------------------------------------------------------------------------------

 

         

            MIHI LLC, as Lender
      By:   /s/ Thomas Morgan Edwards       Name:   Thomas Morgan Edwards      
Title:   Managing Director         By:   /s/ Stephen MeLos       Name:   Stephen
MeLos       Title:   Managing Director    

 

--------------------------------------------------------------------------------

 

Schedule I
Commitments
“Revolving Credit Commitments”

         
General Electric Capital Corporation:
  $ 8,611,111.11  
 
       
SunTrust Bank:
  $ 4,444,444.44  
 
       
Regions Bank:
  $ 2,777,777.78  
 
       
ING Capital LLC
  $ 2,777,777.78  
 
       
CapitalSource Bank:
  $ 2,500,000.00  
 
       
Royal Bank of Canada:
  $ 2,222,222.22  
 
       
MIHI LLC:
  $ 0.00  
 
       
Fifth Third Bank:
  $ 1,666,666.67  
 
       
“Term Loan Commitments”
       
 
       
General Electric Capital Corporation:
  $ 56,388,888.89  
 
       
SunTrust Bank:
  $ 35,555,555.56  
 
       
Regions Bank:
  $ 22,222,222.22  
 
       
ING Capital LLC
  $ 22,222,222.22  
 
       
CapitalSource Bank:
  $ 20,000,000.00  
 
       
Royal Bank of Canada:
  $ 17,777,777.78  
 
       
MIHI LLC:
  $ 12,500,000.00  
 
       
Fifth Third Bank:
  $ 13,333,333.33