Exhibit 10.2

 
CREDIT AGREEMENT
by and among
MEDQUIST INC.
as Parent,
THE SUBSIDIARIES OF PARENT LISTED AS
BORROWERS ON THE SIGNATURE PAGES HERETO
as Borrowers,
THE LENDERS THAT ARE SIGNATORIES HERETO
as Lenders,
and
WELLS FARGO FOOTHILL, LLC
as Arranger and Administrative Agent
Dated as of August 31, 2009
 

 

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CREDIT AGREEMENT
               THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of
August 31, 2009, by and among the lenders identified on the signature pages
hereof (such lenders, together with their respective successors and permitted
assigns, are referred to hereinafter each individually as a “Lender” and
collectively as the “Lenders”), WELLS FARGO FOOTHILL, LLC, a Delaware limited
liability company, as the arranger and administrative agent for the Lenders (in
such capacity, together with its successors and assigns in such capacity,
“Agent”), MEDQUIST INC., a New Jersey corporation (“Parent”), and each of
Parent’s Subsidiaries listed as a “Borrower” on the signature pages hereto (each
a “Borrower” and collectively, “Borrowers”).
               The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
     1.1 Definitions. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
     1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
“financial statements” shall include the notes and schedules thereto. Whenever
the term “Parent” is used in respect of a financial covenant or a related
definition, it shall be understood to mean Parent and its Subsidiaries on a
consolidated basis, unless the context clearly requires otherwise. For the
purpose of Section 7 hereof and the definitions used therein, “GAAP” shall mean
generally accepted accounting principles in effect from time to time, provided
that if there occurs after the date of this Agreement any change in GAAP (or any
modification or change in the method of accounting of the Loan Parties or their
Subsidiaries permitted under Section 6.10 to conform to GAAP) that affects in
any respect the calculation of any covenant contained in Section 7 hereof, Agent
and Administrative Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of Borrowers and the Lender
Group after such change in GAAP (or method of accounting) conform as nearly as
possible to their respective positions as of the date of this Agreement and,
until any such amendments have been agreed upon, the covenants in Section 7
hereof shall be calculated as if no such change in GAAP (or method of
accounting) has occurred.
     1.3 Code. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein; provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 of the Code shall
govern.
     1.4 Construction. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms “includes”
and “including” are not limiting, and the term “or” has, except where otherwise
indicated, the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in any other Loan
Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts, and contract rights. Any reference herein or in any other Loan
Document to the satisfaction or repayment in full of the Obligations shall mean
the repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization) of all Obligations other
than

 

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unasserted contingent indemnification Obligations and other than any Bank
Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of this Agreement to be repaid or cash collateralized. Any reference
herein to any Person shall be construed to include such Person’s successors and
assigns. Any requirement of a writing contained herein or in any other Loan
Document shall be satisfied by the transmission of a Record.
     1.5 Subsidiaries.
               (a) Any references herein to Subsidiaries of Parent or
Subsidiaries of any Loan Party shall be construed to exclude each Specified
Subsidiary so long as such Person satisfies the criteria set forth in clauses
(i) through (vii) of Section 1.5(b). Without limiting the generality of the
foregoing, in no event shall the net earnings of any Specified Subsidiary be
consolidated with or included in the net earnings of Parent and its Subsidiaries
for any purpose under this Agreement (including, without limitation, Section 7
hereof) or any other Loan Document, and each Specified Subsidiary shall maintain
separate books and records from Parent and its Subsidiaries.
               (b) The Board of Directors of Parent may designate any Subsidiary
of Parent formed or acquired in connection with a Permitted Unrestricted
Acquisition to be a Specified Subsidiary so long as (i) neither Parent nor any
of its Subsidiaries is directly or indirectly liable for any Indebtedness of
such Person, (ii) no default with respect to any Indebtedness of such Person
would permit (upon notice, lapse of time or otherwise) any holder of any
Indebtedness of Parent or any of its Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity, (iii) any Investment by Parent or any of its
Subsidiaries in such Person will not violate any provision of this Agreement or
any other Loan Document, (iv) neither Parent nor any of its Subsidiaries has a
contract, agreement, arrangement, understanding or obligation of any kind (other
than (A) solely in the case of Parent, in respect of its holding Stock in such
Specified Subsidiary in the amount owned by Parent on the date of formation or
acquisition thereof, as the case may be, and (B) in respect of Permitted
Investments), whether written or oral, with such Person other than those that
would customarily be obtained at the time from Persons who are not Affiliates of
Parent or any of its Subsidiaries, (v) neither Parent nor any of its
Subsidiaries has any obligation to subscribe for additional shares of Stock in
such Person, or to maintain or preserve such Person’s financial condition or to
cause such Person to achieve certain levels of operating results, (vi) such
Person maintains separate bank accounts and does not commingle funds with any
Loan Party or any Subsidiary of a Loan Party and (vii) such Person’s other
assets are segregated from the Collateral. Parent shall provide Agent with
written notice of such proposed designation at least 10 Business Days prior to
the proposed date of designation.
               (c) The Board of Directors of Parent may designate any Specified
Subsidiary as a Subsidiary so long as (i) Parent shall have provided Agent with
written notice of such proposed designation at least 10 Business Days prior to
the proposed date of designation and, not later than 5 Business Days prior to
the proposed date of designation, copies of the Governing Documents and other
Material Contracts of the Specified Subsidiary to be so designated, which
Governing Documents and other Material Contracts must be reasonably acceptable
to Agent, (ii) no Default or Event of Default shall have occurred and be
continuing either before or after giving effect to such designation or would
otherwise result from such designation, (iii) the Specified Subsidiary to be so
designated shall have executed and delivered any and all documentation
reasonably requested by Agent in order to become a Guarantor, (iv) the Specified
Subsidiary to be so designated shall have executed and delivered any and all
documentation reasonably requested by Agent in order to provide Agent with a
first priority perfected security interest, subject to Permitted Liens, in the
assets of such Person, (v) the owner of the Stock of the Specified Subsidiary to
be so designated shall have executed and delivered any and all documentation
reasonably requested by Agent in order to provide Agent with a first priority
perfected security interest in such Stock, and (vi) Parent shall have provided
Agent with written confirmation, supported by reasonably detailed calculations,
that on a pro forma basis after giving effect to such designation, Parent and
its Subsidiaries are projected to be in compliance with the financial covenants
in Section 7 for the 12 month period ended one year after the proposed date of
such designation.
     1.6 Schedules and Exhibits. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.

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2. LOAN AND TERMS OF PAYMENT.
     2.1 Revolver Advances.
               (a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances (“Advances”)
to Borrowers in an amount at any one time outstanding not to exceed such
Lender’s Pro Rata Share of an amount equal to the lesser of (i) the Maximum
Revolver Amount less the Availability Block less the Letter of Credit Usage at
such time, and (ii) the Borrowing Base at such time less the Letter of Credit
Usage at such time.
               (b) Amounts borrowed pursuant to this Section 2.1 may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement. The outstanding principal amount of the
Advances, together with interest accrued thereon, shall be due and payable on
the Maturity Date or, if earlier, on the date on which they are declared due and
payable pursuant to the terms of this Agreement.
     2.2 Reserves. Anything to the contrary in Section 2.1 notwithstanding,
Agent shall have the right to establish reserves against the Borrowing Base in
such amounts, and with respect to such matters, as Agent in its Permitted
Discretion shall deem necessary or appropriate, including reserves with respect
to (a) sums that Parent or its Subsidiaries are required to pay under any
Section of this Agreement or any other Loan Document (such as taxes,
assessments, insurance premiums, royalties or, in the case of leased assets,
rents or other amounts payable under such leases) and has failed to pay (after
giving effect to all applicable grace periods with respect thereto and to the
extent that such payments are not the subject of a Permitted Protest) and
(b) amounts owing by Parent or its Subsidiaries to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than a
Permitted Lien), which Lien or trust has not been subordinated in writing to the
Lien or trust in favor of Agent in a manner satisfactory to Agent in its
Permitted Discretion, and in the Permitted Discretion of Agent likely would have
a priority superior to the Agent’s Liens (such as Liens or trusts in favor of
landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral.
     2.3 Borrowing Procedures and Settlements.
               (a) Procedure for Borrowing. Each Borrowing shall be made by a
written request by an Authorized Person delivered to Agent. Such written request
must be received by Agent no later than (i) in the case of Base Rate Loans, noon
(New York time) on the Business Day that is the requested Funding Date and
(ii) in the case of LIBOR Rate Loans, no later than 2:00 p.m. (New York time) at
least 3 Business Days prior to the Business Day that is the requested Funding
Date, in each case, specifying (A) the amount of such Borrowing, and (B) the
requested Funding Date, which shall be a Business Day, and, in the case of a
request for LIBOR Rate Loans, be accompanied by a LIBOR Notice. At Agent’s
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time. In such circumstances, Borrowers agree that any such telephonic
notice will be confirmed in writing within 24 hours of the giving of such
telephonic notice, but the failure to provide such written confirmation shall
not affect the validity of the request.
               (b) Making of Swing Loans. In the case of a request for an
Advance at any time that there are 2 or more Lenders, and so long as either
(i) the aggregate amount of Swing Loans made since the last Settlement Date,
minus the amount of Collections or payments applied to Swing Loans since the
last Settlement Date, plus the amount of the requested Advance does not exceed
$2,500,000, or (ii) Swing Lender, in its sole discretion, shall agree to make a
Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make an
Advance in the amount of such Borrowing (any such Advance made solely by Swing
Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and
such Advances being referred to collectively as “Swing Loans”) available to
Borrowers on the Funding Date applicable thereto by transferring immediately
available funds to Borrowers’ Designated Account. Each Swing Loan shall be

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deemed to be an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments on any Swing
Loan shall be payable to Swing Lender solely for its own account. Subject to the
provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be
obligated to make any Swing Loan if Swing Lender has actual knowledge that
(i) one or more of the applicable conditions precedent set forth in Section 3
will not be satisfied on the requested Funding Date for the applicable
Borrowing, or (ii) the requested Borrowing would exceed the Availability on such
Funding Date. Swing Lender shall not otherwise be required to determine whether
the applicable conditions precedent set forth in Section 3 have been satisfied
on the Funding Date applicable thereto prior to making any Swing Loan. The Swing
Loans shall be secured by the Agent’s Liens, constitute Obligations hereunder,
and bear interest at the rate applicable from time to time to Advances that are
Base Rate Loans.
               (c) Making of Loans.
                    (i) In the event that Swing Lender is not obligated to make
a Swing Loan then promptly after receipt of a request for a Borrowing pursuant
to Section 2.3(a), Agent shall notify the Lenders, not later than 1:00 p.m. (New
York time) on the Funding Date applicable thereto, by telecopy, telephone, or
other similar form of transmission, of the requested Borrowing. Each Lender
shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing
available to Agent in immediately available funds, to Agent’s Account, not later
than 3:00 p.m. (New York time) on the Funding Date applicable thereto. After
Agent’s receipt of the proceeds of such Advances, Agent shall make the proceeds
thereof available to Borrowers on the applicable Funding Date by transferring
immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(d)(ii), Agent shall not request any Lender to make, and no Lender
shall have the obligation to make, any Advance if (1) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (2) the requested Borrowing would exceed the Availability on
such Funding Date.
                    (ii) Unless Agent receives notice from a Lender prior to
2:00 p.m. (New York time) on the date of a Borrowing, that such Lender will not
make available as and when required hereunder to Agent for the account of
Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in
immediately available funds on the Funding Date and Agent may (but shall not be
so required), in reliance upon such assumption, make available to Borrowers on
such date a corresponding amount. If any Lender shall not have made its full
amount available to Agent in immediately available funds and if Agent in such
circumstances has made available to Borrowers such amount, that Lender shall on
the Business Day following such Funding Date make such amount available to
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by Agent to any Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If such
amount is so made available by the Defaulting Lender, such payment to Agent
shall constitute such Lender’s Advance on the date of Borrowing for all purposes
of this Agreement. If such amount is not made available by the Defaulting Lender
to Agent on the Business Day following the Funding Date, Agent will notify
Administrative Borrower of such failure to fund and, upon demand by Agent,
Borrowers shall pay such amount to Agent for Agent’s account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Advances
composing such Borrowing; provided, however, that each such payment made by
Borrowers pursuant to this sentence shall be applied, first to that portion of
the Advances composing Base Rate Loans and second, to that portion of the
principal amount of the Advance composing LIBOR Rate Loans. The failure of any
Lender to make any Advance on any Funding Date shall not relieve any other
Lender of any obligation hereunder to make an Advance on such Funding Date, but
no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on any Funding Date.
                    (iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrowers to Agent for the Defaulting
Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender,
Agent shall transfer any such payments to each other non-Defaulting Lender
member of the Lender Group ratably in accordance with their Commitments (but
only to the extent that such Defaulting

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Lender’s Advance was funded by the other members of the Lender Group) or, if so
directed by Administrative Borrower and if no Default or Event of Default has
occurred and is continuing (and to the extent such Defaulting Lender’s Advance
was not funded by the Lender Group), retain same to be re-advanced to Borrowers
as if such Defaulting Lender had made Advances to Borrowers. Subject to the
foregoing, Agent may hold and, in its Permitted Discretion, re-lend to Borrowers
for the account of such Defaulting Lender the amount of all such payments
received and retained by Agent for the account of such Defaulting Lender. Solely
for the purposes of voting or consenting to matters with respect to the Loan
Documents, such Defaulting Lender shall be deemed not to be a “Lender” and such
Lender’s Commitment shall be deemed to be zero. This Section shall remain
effective with respect to such Defaulting Lender until (x) the Obligations under
this Agreement shall have been declared or shall have become immediately due and
payable, (y) the non-Defaulting Lenders, Agent, and Administrative Borrower
shall have waived such Defaulting Lender’s default in writing, or (z) the
Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to
Agent all amounts owing by Defaulting Lender in respect thereof. The operation
of this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by Borrowers of their duties and
obligations hereunder to Agent or to the Lenders other than such Defaulting
Lender. Any such failure to fund by any Defaulting Lender shall constitute a
material breach by such Defaulting Lender of this Agreement and shall entitle
Administrative Borrower at its option, upon written notice to Agent, to arrange
for a substitute Lender to assume the Commitment of such Defaulting Lender, such
substitute Lender to be reasonably acceptable to Agent. In connection with the
arrangement of such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to execute and deliver a
completed form of Assignment and Acceptance in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such document
if it fails to do so) subject only to being repaid its share of the outstanding
Obligations (other than Bank Product Obligations, but including an assumption of
its Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever; provided, however, that any such assumption of
the Commitment of such Defaulting Lender shall not be deemed to constitute a
waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any
such Defaulting Lender arising out of or in relation to such failure to fund.
               (d) Protective Advances and Optional Overadvances.
                    (i) Agent hereby is authorized by Borrowers and the Lenders,
from time to time in Agent’s sole discretion, (A) after the occurrence and
during the continuance of a Default or an Event of Default, or (B) at any time
that any of the other applicable conditions precedent set forth in Section 3 are
not satisfied, to make Advances to Borrowers on behalf of the Lenders that
Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve
or protect the Collateral, or any portion thereof, or (2) to enhance the
likelihood of repayment of the Obligations (other than the Bank Product
Obligations) (any of the Advances described in this Section 2.3(d)(i) shall be
referred to as “Protective Advances”).
                    (ii) Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and either Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby
would be created, so long as (A) after giving effect to such Advances, the
outstanding Revolver Usage does not exceed the Borrowing Base by more than
$4,000,000, and (B) after giving effect to such Advances, the outstanding
Revolver Usage (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver
Amount. In the event Agent obtains actual knowledge that the Revolver Usage
exceeds the amounts permitted by the immediately foregoing provisions,
regardless of the amount of, or reason for, such excess, Agent shall notify the
Lenders as soon as practicable (and prior to making any (or any additional)
intentional Overadvances (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral or its value),
and the Lenders with Revolver Commitments thereupon shall, together with Agent,
jointly determine the terms of arrangements that shall be implemented with
Borrowers intended to reduce, within a reasonable time, the outstanding
principal amount of the Advances to Borrowers to an amount permitted by the
preceding sentence. In such circumstances, if any Lender with a Revolver
Commitment

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objects to the proposed terms of reduction or repayment of any Overadvance, the
terms of reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. Each Lender with a Revolver Commitment
shall be obligated to settle with Agent as provided in Section 2.3(e) for the
amount of such Lender’s Pro Rata Share of any unintentional Overadvances by
Agent reported to such Lender, any intentional Overadvances made as permitted
under this Section 2.3(d)(ii), and any Overadvances resulting from the charging
to the Loan Account of interest, fees, or Lender Group Expenses.
                    (iii) Each Protective Advance and each Overadvance shall be
deemed to be an Advance hereunder, except that no Protective Advance or
Overadvance shall be eligible to be a LIBOR Rate Loan and, prior to Settlement
therefor, all payments on the Protective Advances shall be payable to Agent
solely for its own account. The Protective Advances and Overadvances shall be
repayable on demand, secured by the Agent’s Liens, constitute Obligations
hereunder, and bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans. The provisions of this Section 2.3(d) are for
the exclusive benefit of Agent, Swing Lender, and the Lenders and are not
intended to benefit Borrowers in any way.
               (e) Settlement. It is agreed that each Lender’s funded portion of
the Advances is intended by the Lenders to equal, at all times, such Lender’s
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of Borrowers) that in order to facilitate the administration of
this Agreement and the other Loan Documents, settlement among the Lenders as to
the Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:
                    (i) Agent shall request settlement (“Settlement”) with the
Lenders on a weekly basis, or on a more frequent basis if so determined by Agent
(1) on behalf of Swing Lender, with respect to the outstanding Swing Loans,
(2) for itself, with respect to the outstanding Protective Advances, and
(3) with respect to Parent’s or its Subsidiaries’ Collections or payments
received, as to each by notifying the Lenders by telecopy, telephone, or other
similar form of transmission, of such requested Settlement, no later than 5:00
p.m. (New York time) on the Business Day immediately prior to the date of such
requested Settlement (the date of such requested Settlement being the
“Settlement Date”). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, and Protective
Advances for the period since the prior Settlement Date. Subject to the terms
and conditions contained herein (including Section 2.3(c)(iii)): (y) if a
Lender’s balance of the Advances (including Swing Loans and Protective Advances)
exceeds such Lender’s Pro Rata Share of the Advances (including Swing Loans and
Protective Advances) as of a Settlement Date, then Agent shall, by no later than
3:00 p.m. (New York time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances
(including Swing Loans and Protective Advances), and (z) if a Lender’s balance
of the Advances (including Swing Loans and Protective Advances) is less than
such Lender’s Pro Rata Share of the Advances (including Swing Loans and
Protective Advances) as of a Settlement Date, such Lender shall no later than
3:00 p.m. (New York time) on the Settlement Date transfer in immediately
available funds to the Agent’s Account, an amount such that each such Lender
shall, upon transfer of such amount, have as of the Settlement Date, its Pro
Rata Share of the Advances (including Swing Loans and Protective Advances). Such
amounts made available to Agent under clause (z) of the immediately preceding
sentence shall be applied against the amounts of the applicable Swing Loans or
Protective Advances and, together with the portion of such Swing Loans or
Protective Advances representing Swing Lender’s Pro Rata Share thereof, shall
constitute Advances of such Lenders. If any such amount is not made available to
Agent by any Lender on the Settlement Date applicable thereto to the extent
required by the terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate.
                    (ii) In determining whether a Lender’s balance of the
Advances, Swing Loans, and Protective Advances is less than, equal to, or
greater than such Lender’s Pro Rata Share of the Advances, Swing Loans, and
Protective Advances as of a Settlement Date, Agent shall, as part of the
relevant Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to

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principal, interest, fees payable by Borrowers and allocable to the Lenders
hereunder, and proceeds of Collateral.
               (iii) Between Settlement Dates, Agent, to the extent Protective
Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender,
as applicable, any Collections or payments received by Agent, that in accordance
with the terms of this Agreement would be applied to the reduction of the
Advances, for application to the Protective Advances or Swing Loans. Between
Settlement Dates, Agent, to the extent no Protective Advances or Swing Loans are
outstanding, may pay over to Swing Lender any Collections or payments received
by Agent, that in accordance with the terms of this Agreement would be applied
to the reduction of the Advances, for application to Swing Lender’s Pro Rata
Share of the Advances. If, as of any Settlement Date, Collections or payments of
Parent or its Subsidiaries received since the then immediately preceding
Settlement Date have been applied to Swing Lender’s Pro Rata Share of the
Advances other than to Swing Loans, as provided for in the previous sentence,
Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall
pay to the Lenders, to be applied to the outstanding Advances of such Lenders,
an amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Advances. During the period
between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Protective Advances, and each Lender (subject to the effect of
agreements between Agent and individual Lenders) with respect to the Advances
other than Swing Loans and Protective Advances, shall be entitled to interest at
the applicable rate or rates payable under this Agreement on the daily amount of
funds employed by Swing Lender, Agent, or the Lenders, as applicable.
          (f) Notation. Agent, as a non-fiduciary agent for Borrowers, shall
maintain a register showing the principal amount of the Advances, owing to each
Lender, including the Swing Loans owing to Swing Lender, and Protective Advances
owing to Agent, and the interests therein of each Lender, from time to time and
such records shall, absent manifest error, conclusively be presumed to be
correct and accurate.
          (g) Lenders’ Failure to Perform. All Advances (other than Swing Loans
and Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
     2.4 Payments; Reductions of Commitments; Prepayments.
          (a) Payments by Borrowers.
               (i) Except as otherwise expressly provided herein, all payments
by Borrowers shall be made to Agent’s Account for the account of the Lender
Group and shall be made in immediately available funds, no later than 2:00 p.m.
(New York time) on the date specified herein. Any payment received by Agent
later than 2:00 p.m. (New York time) shall be deemed to have been received on
the following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.
               (ii) Unless Agent receives notice from Administrative Borrower
prior to the date on which any payment is due to the Lenders that Borrowers will
not make such payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrowers
do not make such payment in full to Agent on the date when due, each Lender
severally shall repay to Agent on demand such amount distributed to such Lender,
together with interest thereon at the Defaulting Lender Rate for each day from
the date such amount is distributed to such Lender until the date repaid.

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               (b) Apportionment and Application.
                    (i) So long as no Application Event has occurred and is
continuing and except as otherwise provided with respect to Defaulting Lenders,
all principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and all payments of fees and expenses
(other than fees or expenses that are for Agent’s separate account) shall be
apportioned ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee or expense relates. All
payments to be made hereunder by Borrowers shall be remitted to Agent and all
(subject to Section 2.4(b)(iv)) such payments, and all proceeds of Collateral
received by Agent, shall be applied, so long as no Application Event has
occurred and is continuing, to reduce the balance of the Advances outstanding
and, thereafter, to Borrowers (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law.
                    (ii) At any time that an Application Event has occurred and
is continuing and except as otherwise provided with respect to Defaulting
Lenders, all payments remitted to Agent and all proceeds of Collateral received
by Agent shall be applied as follows:
                         (A) first, to pay any Lender Group Expenses (including
cost or expense reimbursements) or indemnities then due to Agent under the Loan
Documents, until paid in full,
                         (B) second, to pay any fees or premiums then due to
Agent under the Loan Documents until paid in full,
                         (C) third, to pay interest due in respect of all
Protective Advances until paid in full,
                         (D) fourth, to pay the principal of all Protective
Advances until paid in full,
                         (E) fifth, ratably to pay any Lender Group Expenses
(including cost or expense reimbursements) or indemnities then due to any of the
Lenders under the Loan Documents, until paid in full,
                         (F) sixth, ratably to pay any fees or premiums then due
to any of the Lenders under the Loan Documents until paid in full,
                         (G) seventh, ratably to pay interest due in respect of
the Advances (other than Protective Advances) and the Swing Loans, until paid in
full,
                         (H) eighth, ratably (i) to pay the principal of all
Swing Loans until paid in full, (ii) to pay the principal of all Advances until
paid in full, (iii) to Agent, to be held by Agent, for the benefit of Issuing
Lender and those Lenders having a share of the Risk Participation Liability, as
cash collateral in an amount up to 105% of the Letter of Credit Usage, and
(iv) to Agent, to be held by Agent, for the benefit of the Bank Product
Providers, as cash collateral in an amount up to the amount the Bank Product
Providers reasonably determine to be the credit exposure of Parent and its
Subsidiaries in respect of Bank Products,
                         (I) ninth, to pay any other Obligations then
outstanding until paid in full, and
                         (J) tenth, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
                    (iii) Agent promptly shall distribute to each Lender,
pursuant to the applicable wire instructions received from each Lender in
writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided in Section 2.3(e).

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                    (iv) In each instance, so long as no Application Event has
occurred and is continuing, Section 2.4(b)(i) shall not apply to any payment
made by Borrowers to Agent and specified by Borrowers to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Loan Document.
                    (v) For purposes of Section 2.4(b)(ii), “paid in full” means
payment in cash of all amounts owing under the Loan Documents, including loan
fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not any
of the foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding.
                    (vi) In the event of a direct conflict between the priority
provisions of this Section 2.4 and any other provision contained in any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this Section 2.4 shall
control and govern.
               (c) Reduction of Revolver Commitments. The Revolver Commitments
shall terminate on the Maturity Date. Borrowers may reduce the Revolver
Commitments to an amount (which may be zero) not less than the sum of (i) the
Revolver Usage as of such date, plus (ii) the principal amount of all Advances
not yet made as to which a request has been given by Administrative Borrower
under Section 2.3(a), plus (iii) the amount of all Letters of Credit not yet
issued as to which a request has been given by Administrative Borrower pursuant
to Section 2.11(a). Each such reduction shall be in an amount which is an
integral multiple of $1,000,000 (unless the Revolver Commitments in effect
immediately prior to such reduction are less than $1,000,000), shall be made by
providing not less than 5 Business Days prior written notice to Agent and shall
be irrevocable. Once reduced, the Revolver Commitments may not be increased.
Each such reduction of the Revolver Commitments shall reduce the Revolver
Commitments of each Lender proportionately in accordance with its Pro Rata Share
thereof.
               (d) Optional Prepayments. Borrowers may prepay the principal of
any Advance at any time in whole or in part.
               (e) Mandatory Prepayments.
                    (i) Dispositions. Within 5 Business Days of the date of
receipt by Parent or any of its Subsidiaries of the Net Cash Proceeds of any
voluntary or involuntary sale or disposition by Parent or any of its
Subsidiaries of assets (including casualty losses or condemnations but excluding
sales or dispositions which qualify as Permitted Dispositions under clauses (a),
(b), (c), (d), (e), (j), (l) and (m) of the definition of Permitted
Dispositions), Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(f) in an amount equal to 100% of such
Net Cash Proceeds (including condemnation awards and payments in lieu thereof)
received by such Person in connection with such sales or dispositions; provided
that, so long as (A) no Default or Event of Default shall have occurred and is
continuing, (B) Administrative Borrower shall have given Agent prior written
notice of Borrowers’ intention to apply such monies to the costs of replacement
of the properties or assets that are the subject of such sale or disposition or
the cost of purchase or construction of other assets useful in the business of
Parent or its Subsidiaries, (C) the monies are held in a Deposit Account in
which Agent has a perfected first-priority security interest, and (D) Parent or
its Subsidiaries, as applicable, complete such replacement, purchase, or
construction within 180 days after the initial receipt of such monies, Parent
and its Subsidiaries shall have the option to apply such monies to the costs of
replacement of the assets that are the subject of such sale or disposition
unless and to the extent that such applicable period shall have expired without
such replacement, purchase or construction being made or completed, in which
case, any amounts remaining in the cash collateral account shall be paid to
Agent and applied in accordance with Section 2.4(f); and provided, further, that
no prepayment shall be required pursuant to this Section 2.4(e)(i) until the
aggregate amount of Net Cash Proceeds of all dispositions described in this
Section 2.4(e)(i) exceeds $250,000 during the term of this

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Agreement. Nothing contained in this Section 2.4(e)(i) shall permit Parent or
any of its Subsidiaries to sell or otherwise dispose of any assets other than in
accordance with Section 6.4.
                    (ii) Extraordinary Receipts. Within 5 Business Days of the
date of receipt by Parent or any of its Subsidiaries of any Extraordinary
Receipts, Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(f) in an amount equal to 100% of such
Extraordinary Receipts, net of any reasonable expenses incurred in collecting
such Extraordinary Receipts; provided, that no prepayment shall be required
pursuant to this Section 2.4(e)(ii) until the aggregate amount of all
Extraordinary Receipts described in this Section 2.4(e)(ii) exceeds $250,000
during the term of this Agreement.
                    (iii) Indebtedness. Within 5 Business Days of the date of
incurrence by Parent or any of its Subsidiaries of any Indebtedness (other than
Permitted Indebtedness described in clauses (a) through (m) of the definition
thereof), Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(f) in an amount equal to 100% of the
Net Cash Proceeds received by such Person in connection with such incurrence.
The provisions of this Section 2.4(e)(iii) shall not be deemed to be implied
consent to any such incurrence otherwise prohibited by the terms and conditions
of this Agreement.
               (f) Application of Payments. Each prepayment pursuant to
Section 2.4(e) above shall (i) so long as no Application Event shall have
occurred and be continuing, be applied, first, to the outstanding principal
amount of the Advances (it being understood and agreed that no such prepayment
shall result in a reduction in the Revolver Commitments and shall be available
to Borrowers to be reborrowed subject to the terms and conditions of this
Agreement), until paid in full, and second to cash collateralize the Letters of
Credit in an amount equal to 105% of the then extant Letter of Credit Usage, and
(ii) if an Application Event shall have occurred and be continuing, be applied
in the manner set forth in Section 2.4(b)(ii).
               (g) Waiver of Funding Losses. So long as no Default or Event of
Default shall have occurred and be continuing either before or after giving
effect to any prepayment made pursuant to Section 2.4(e) above, Agent shall
waive any and all Funding Losses otherwise payable pursuant to Section 2.12(b)
as a result of any such prepayment.
     2.5 Overadvances. If, at any time or for any reason, the amount of
Obligations owed by Borrowers to the Lender Group pursuant to Section 2.1 or
Section 2.11 is greater than any of the limitations set forth in Section 2.1 or
Section 2.11, as applicable (an “Overadvance”), Borrowers shall immediately pay
to Agent, in cash, the amount of such excess, which amount shall be used by
Agent to reduce the Obligations in accordance with the priorities set forth in
Section 2.4(b). Borrowers promise to pay the Obligations (including principal,
interest, fees, costs, and expenses) in Dollars in full on the Maturity Date or,
if earlier, on the date on which the Obligations are declared due and payable
pursuant to the terms of this Agreement.
     2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.
               (a) Interest Rates. Except as provided in Section 2.6(c), all
Obligations (except for undrawn Letters of Credit and except for Bank Product
Obligations) that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof as follows:
                    (i) if the relevant Obligation is a LIBOR Rate Loan, at a
per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and
                    (ii) otherwise, at a per annum rate equal to the Base Rate
plus the Base Rate Margin.
               (b) Letter of Credit Fee. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any
agreements between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in
Section 2.11(e)) which

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shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
               (c) Default Rate. Upon the occurrence and during the continuation
of an Event of Default and at the election of the Required Lenders,
                    (i) all Obligations (except for undrawn Letters of Credit
and except for Bank Product Obligations) that have been charged to the Loan
Account pursuant to the terms hereof shall bear interest on the Daily Balance
thereof at a per annum rate equal to 2 percentage points above the per annum
rate otherwise applicable hereunder, and
                    (ii) the Letter of Credit fee provided for in Section 2.6(b)
shall be increased to 2 percentage points above the per annum rate otherwise
applicable hereunder.
               (d) Payment. Except as provided to the contrary in Section 2.10
or Section 2.12(a), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
at any time that Obligations or Commitments are outstanding. Borrowers hereby
authorize Agent, from time to time without prior notice to Borrowers, to charge
all interest and fees (when due and payable), all Lender Group Expenses (as and
when incurred), all charges, commissions, fees, and costs provided for in
Section 2.11(e) (as and when accrued or incurred), all fees and costs provided
for in Section 2.10 (as and when accrued or incurred), and all other payments as
and when due and payable under any Loan Document (including any amounts due and
payable to the Bank Product Providers in respect of Bank Products) to the Loan
Account, which amounts thereafter shall constitute Advances hereunder and shall
accrue interest at the rate then applicable to Advances that are Base Rate
Loans. Any interest not paid when due shall be compounded by being charged to
the Loan Account and shall thereafter constitute Advances hereunder and shall
accrue interest at the rate then applicable to Advances that are Base Rate
Loans.
               (e) Computation. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year, in each case, for
the actual number of days elapsed in the period during which the interest or
fees accrue. In the event the Base Rate is changed from time to time hereafter,
the rates of interest hereunder based upon the Base Rate automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Base Rate.
               (f) Intent to Limit Charges to Maximum Lawful Rate. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrowers and the Lender Group, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest and
manner of payment stated within it; provided, however, that, anything contained
herein to the contrary notwithstanding, if said rate or rates of interest or
manner of payment exceeds the maximum allowable under applicable law, then, ipso
facto, as of the date of this Agreement, Borrowers are and shall be liable only
for the payment of such maximum as allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess.
     2.7 Crediting Payments; Clearance Charge.
               (a) The receipt of any payment item by Agent shall not be
considered a payment on account unless such payment item is a wire transfer of
immediately available federal funds made to the Agent’s Account or unless and
until such payment item is honored when presented for payment. Should any
payment item not be honored when presented for payment, then Borrowers shall be
deemed not to have made such payment and interest shall be calculated
accordingly. Anything to the contrary contained herein notwithstanding, any
payment item shall be deemed received by Agent only if it is received into the
Agent’s Account on a Business Day on or before 2:00 p.m. (New York time). If any
payment item is received into the Agent’s Account on a non-Business Day or after
2:00 p.m. (New York time) on a Business Day, it shall be

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deemed to have been received by Agent as of the opening of business on the
immediately following Business Day.
               (b) From and after the Closing Date, Agent shall be entitled to
charge Borrowers for 1 Business Day of ‘clearance’ at the rate then applicable
under Section 2.6 to Advances that are Base Rate Loans on all Collections that
are received by Parent and its Subsidiaries (regardless of whether forwarded to
Agent). This across-the-board 1 Business Day clearance charge on all Collections
of Parent and its Subsidiaries is acknowledged by the parties to constitute an
integral aspect of the pricing of the financing of Borrowers and shall apply
irrespective of whether or not there are any outstanding monetary Obligations;
the effect of such clearance charge being the equivalent of charging interest on
such Collections through the completion of a period ending 1 Business Day after
the receipt thereof. The parties acknowledge and agree that the economic benefit
of the foregoing provisions of this Section 2.7(b) shall be for the exclusive
benefit of Agent.
     2.8 Designated Account. Agent is authorized to make the Advances and
Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person or, without instructions, if pursuant to
Section 2.6(d). Administrative Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrowers and made by Agent or the
Lenders hereunder. Unless otherwise agreed by Agent and Administrative Borrower,
any Advance, Protective Advance, or Swing Loan requested by Administrative
Borrower and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
     2.9 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Borrowers (the “Loan Account”)
on which Borrowers will be charged with all Advances (including Protective
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrowers or for Borrowers’ account, the Letters of Credit issued by Issuing
Lender for Borrowers’ account, and with all other payment Obligations hereunder
or under the other Loan Documents (except for Bank Product Obligations),
including, accrued interest, fees and expenses, and Lender Group Expenses. In
accordance with Section 2.7, the Loan Account will be credited with all payments
received by Agent from Borrowers or for Borrowers’ account. Agent shall render
statements regarding the Loan Account to Administrative Borrower, including
principal, interest, fees, and including an itemization of all charges and
expenses constituting Lender Group Expenses owing, and such statements, absent
manifest error, shall be conclusively presumed to be correct and accurate and
constitute an account stated between Borrowers and the Lender Group unless,
within 30 days after receipt thereof by Administrative Borrower, Administrative
Borrower shall deliver to Agent written objection thereto describing the error
or errors contained in any such statements.
     2.10 Fees. Borrowers shall pay to Agent,
               (a) for the account of Agent, as and when due and payable under
the terms of the Fee Letter, the fees set forth in the Fee Letter.
               (b) for the ratable account of those Lenders with Revolver
Commitments, on the first day of each month from and after the Closing Date up
to the first day of the month prior to the Payoff Date and on the Payoff Date,
an unused line fee in an amount equal to the percent per annum set forth in the
table below that corresponds to the average Daily Balance of the Revolver Usage
during the immediately preceding month (or portion thereof) times the result of
(i) the Maximum Revolver Amount, less (ii) the average Daily Balance of the
Revolver Usage during the immediately preceding month (or portion thereof):

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              Unused Line Fee   Average Daily Balance of the Revolver Usage  
Percent  
If the Average Daily Balance of the Revolver Usage is greater than $18,750,000
    0.50 %
If the Average Daily Balance of the Revolver Usage is greater than $12,500,000
but less than or equal to $18,750,000
    0.75 %
If the Average Daily Balance of the Revolver Usage is less than or equal to
$12,500,000
    1.00 %

     2.11 Letters of Credit.
               (a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of Borrowers
(each, an “L/C”) or to purchase participations or execute indemnities,
guarantees, or reimbursement obligations (each such undertaking, an “L/C
Undertaking”) with respect to letters of credit issued by an Underlying Issuer
(as of the Closing Date, the prospective Underlying Issuer is to be Wells Fargo)
for the account of Borrowers. Each request for the issuance of a Letter of
Credit, or the amendment, renewal, or extension of any outstanding Letter of
Credit, shall be made in writing by an Authorized Person and delivered to the
Issuing Lender and Agent via hand delivery, telefacsimile, or other electronic
method of transmission reasonably in advance of the requested date of issuance,
amendment, renewal, or extension. Each such request shall be in form and
substance reasonably satisfactory to the Issuing Lender in its Permitted
Discretion and shall specify (i) the amount of such Letter of Credit, (ii) the
date of issuance, amendment, renewal, or extension of such Letter of Credit,
(iii) the expiration date of such Letter of Credit, (iv) the name and address of
the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit,
as applicable), and (v) such other information (including, in the case of an
amendment, renewal, or extension, identification of the outstanding Letter of
Credit to be so amended, renewed, or extended) as shall be necessary to prepare,
amend, renew, or extend such Letter of Credit. Anything contained herein to the
contrary notwithstanding, the Issuing Lender may, but shall not be obligated to,
issue a Letter of Credit that supports the obligations of a Loan Party or its
Subsidiaries in respect of (1) a lease of real property, or (2) an employment
contract. If requested by the Issuing Lender, Borrowers also shall be applicants
under the application with respect to any Underlying Letter of Credit that is to
be the subject of an L/C Undertaking. The Issuing Lender shall have no
obligation to issue a Letter of Credit if any of the following would result
after giving effect to the issuance of such requested Letter of Credit:
                    (i) the Letter of Credit Usage would exceed the Borrowing
Base less the outstanding amount of Advances, or
                    (ii) the Letter of Credit Usage would exceed $5,000,000, or
                    (iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the sum of (A) the Availability Block, (B) the Bank Product
Reserve, and (C) the outstanding amount of Advances.
               Borrowers and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers shall reimburse such L/C Disbursement to Issuing Lender by
paying to Agent an amount equal to such L/C Disbursement not later than 2:00
p.m., New York time, on the date that such L/C

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Disbursement is made, if Administrative Borrower shall have received written or
telephonic notice of such L/C Disbursement prior to 1:00 p.m., New York time, on
such date, or, if such notice has not been received by Administrative Borrower
prior to such time on such date, then not later than 2:00 p.m., New York time,
on the Business Day that Administrative Borrower receives such notice, if such
notice is received prior to 1:00 p.m., New York time, on the date of receipt,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, initially, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans.
To the extent an L/C Disbursement is deemed to be an Advance hereunder,
Borrowers’ obligation to reimburse such L/C Disbursement shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.11(b) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interests may appear.
               (b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.11(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrowers had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitments, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender’s Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender’s Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrowers on the date due as provided in Section 2.11(a),
or of any reimbursement payment required to be refunded to Borrowers for any
reason. Each Lender with a Revolver Commitment acknowledges and agrees that its
obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the
Issuing Lender pursuant to this Section 2.11(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Lender fails to make available to
Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made
by the Issuing Lender in respect of such Letter of Credit as provided in this
Section, such Lender shall be deemed to be a Defaulting Lender and Agent (for
the account of the Issuing Lender) shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Defaulting Lender
Rate until paid in full.
               (c) Each Borrower hereby agrees to indemnify, save, defend, and
hold the Lender Group harmless from any loss, cost, expense, or liability, and
reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; provided, however, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the Issuing Lender or any other member of the Lender Group. Each Borrower agrees
to be bound by the Underlying Issuer’s regulations and interpretations of any
Underlying Letter of Credit or by Issuing Lender’s interpretations of any L/C
issued by Issuing Lender to or for such Borrower’s account, even though this
interpretation may be different from such Borrower’s own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following any
Borrower’s instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as

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a result of the Lender Group’s indemnification of any Underlying Issuer;
provided, however, that no Borrower shall be obligated hereunder to indemnify
for any loss, cost, expense, or liability to the extent that it is caused by the
gross negligence or willful misconduct of the Issuing Lender or any other member
of the Lender Group. Each Borrower hereby acknowledges and agrees that neither
the Lender Group nor the Issuing Lender shall be responsible for delays, errors,
or omissions resulting from the malfunction of equipment in connection with any
Letter of Credit.
               (d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and other
writings and property received by such Underlying Issuer pursuant to such
Underlying Letter of Credit and to accept and rely upon the Issuing Lender’s
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
               (e) Any and all issuance charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and shall be reimbursable
immediately by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is 0.50% per annum
times the undrawn amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
               (f) If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
                    (i) any reserve, deposit, or similar requirement is or shall
be imposed or modified in respect of any Letter of Credit issued hereunder, or
                    (ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of Credit or
any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay within 30 days after
demand therefor, such amounts as Agent may specify to be necessary to compensate
the Lender Group for such additional cost or reduced receipt, together with
interest on such amount from the date of such demand until payment in full
thereof at the rate then applicable to Base Rate Loans hereunder; provided that
Borrowers shall not be required to compensate a Lender pursuant to this Section
for any such amounts incurred more than 180 days prior to the date that such
Lender first demands payment from Borrowers of such amounts; provided further
that if an event or circumstance giving rise to such amounts is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof. The determination by Agent of any amount
due pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all of the parties
hereto.
     2.12 LIBOR Option.
               (a) Interest and Interest Payment Dates. In lieu of having
interest charged at the rate based upon the Base Rate, Borrowers shall have the
option (the “LIBOR Option”) to have interest on all or a portion of the Advances
be charged (whether at the time when made (unless otherwise provided herein),
upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation
of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the
LIBOR Rate. Interest on LIBOR Rate Loans shall be

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payable on the earliest of (i) the last day of the Interest Period applicable
thereto; (ii) the date on which all or any portion of the Obligations are
accelerated pursuant to the terms hereof; or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Administrative Borrower properly has
exercised the LIBOR Option with respect thereto, the interest rate applicable to
such LIBOR Rate Loan automatically shall convert to the rate of interest then
applicable to Base Rate Loans of the same type hereunder. At any time that an
Event of Default has occurred and is continuing, Borrowers no longer shall have
the option to request that Advances bear interest at a rate based upon the LIBOR
Rate.
               (b) LIBOR Election.
                    (i) Administrative Borrower may, at any time and from time
to time, so long as no Event of Default has occurred and is continuing, elect to
exercise the LIBOR Option by notifying Agent prior to 2:00 p.m. (New York time)
at least 3 Business Days prior to the commencement of the proposed Interest
Period (the “LIBOR Deadline”). Notice of Administrative Borrower’s election of
the LIBOR Option for a permitted portion of the Advances and an Interest Period
pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice
received by Agent before the LIBOR Deadline, or by telephonic notice received by
Agent before the LIBOR Deadline (to be confirmed by delivery to Agent of a LIBOR
Notice received by Agent prior to 5:00 p.m. (New York time) on the same day).
Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy
thereof to each of the affected Lenders.
                    (ii) Each LIBOR Notice shall be irrevocable and binding on
Borrowers. In connection with each LIBOR Rate Loan, each Borrower shall
indemnify, defend, and hold Agent and the Lenders harmless against any loss,
cost, or expense actually incurred by Agent or any Lender as a result of (A) the
payment of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (B) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (C) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
“Funding Losses”). A certificate of Agent or a Lender delivered to
Administrative Borrower setting forth in reasonable detail any amount or amounts
that Agent or such Lender is entitled to receive pursuant to this Section 2.12
shall be conclusive absent manifest error. Funding Losses shall, with respect to
Agent or any Lender, be deemed to equal the amount determined by Agent or such
Lender to be the excess, if any, of (1) the amount of interest that would have
accrued on the principal amount of such LIBOR Rate Loan had such event not
occurred, at the LIBOR Rate that would have been applicable thereto, for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert, or continue,
for the period that would have been the Interest Period therefor), minus (2) the
amount of interest that would accrue on such principal amount for such period at
the interest rate which Agent or such Lender would be offered, were it to be
offered, at the commencement of such period, Dollar deposits of a comparable
amount and period in the London interbank market. Borrowers shall pay such
amount to Agent or the Lender, as applicable, within 30 days of the date of its
receipt of such certificate. If a payment of a LIBOR Rate Loan on a day other
than the last day of the applicable Interest Period would result in a Funding
Loss, Agent may, in its sole discretion at the request of Administrative
Borrower, hold the amount of such payment as cash collateral in support of the
Obligations until the last day of such Interest Period and apply such amounts to
the payment of the applicable LIBOR Rate Loan on such last day, it being agreed
that Agent has no obligation to so defer the application of payments to any
LIBOR Rate Loan and that, in the event that Agent does not defer such
application, Borrowers shall be obligated to pay any resulting Funding Losses.
                    (iii) Borrowers shall have not more than 5 LIBOR Rate Loans
in effect at any given time. Borrowers only may exercise the LIBOR Option for
LIBOR Rate Loans of at least $1,000,000.
               (c) Conversion. Borrowers may convert LIBOR Rate Loans to Base
Rate Loans at any time; provided, however, that in the event that LIBOR Rate
Loans are converted or prepaid on any date that is not the last day of the
Interest Period applicable thereto, including as a result of any automatic
prepayment through the required application by Agent of proceeds of Parent’s and
its Subsidiaries’ Collections in

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accordance with Section 2.4(b) or for any other reason, including early
termination of the term of this Agreement or acceleration of all or any portion
of the Obligations pursuant to the terms hereof, each Borrower shall indemnify,
defend, and hold Agent and the Lenders and their Participants harmless against
any and all Funding Losses in accordance with Section 2.12 (b)(ii) above.
               (d) Special Provisions Applicable to LIBOR Rate.
                    (i) The LIBOR Rate may be adjusted by Agent with respect to
any Lender on a prospective basis to take into account any additional or
increased costs to such Lender of maintaining or obtaining any eurodollar
deposits or increased costs, in each case, due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed by
the Board of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding or maintaining loans bearing interest at the LIBOR
Rate. In any such event, the affected Lender shall give Administrative Borrower
and Agent written notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Administrative Borrower may, by notice to
such affected Lender (y) require such Lender to furnish to Administrative
Borrower a statement setting forth in reasonable detail the basis for adjusting
such LIBOR Rate and the method for determining the amount of such adjustment, or
(z) repay the LIBOR Rate Loans with respect to which such adjustment is made
(together with any amounts due under Section 2.12(b)(ii)).
                    (ii) In the event that any change in market conditions or
any law, regulation, treaty, or directive, or any change therein or in the
interpretation or application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender’s notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.
               (e) No Requirement of Matched Funding. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.
     2.13 Capital Requirements.
               (a) If, after the date hereof, any Lender determines that (i) the
adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Lender’s or such holding company’s capital
as a consequence of such Lender’s Commitments hereunder to a level below that
which such Lender or such holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender’s or such
holding company’s then existing policies with respect to capital adequacy and
assuming the full utilization of such entity’s capital) by any amount deemed by
such Lender to be material, then such Lender may notify Administrative Borrower
and Agent thereof. Following receipt of such notice, Borrowers agree to pay such
Lender on demand the amount of such reduction of return of capital as and when
such reduction is determined, payable within 30 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender’s calculation thereof and the assumptions upon which such

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calculation was based (which statement shall be deemed true and correct absent
manifest error). In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s right to demand such compensation; provided that Borrowers shall
not be required to compensate a Lender pursuant to this Section for any
reductions in return incurred more than 180 days prior to the date that such
Lender notifies Administrative Borrower of such law, rule, regulation or
guideline giving rise to such reductions and of such Lender’s intention to claim
compensation therefor; provided further that if such claim arises by reason of
the adoption of or change in any law, rule, regulation or guideline that is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
               (b) If any Lender requests additional or increased costs referred
to in Section 2.12(d)(i) or amounts under Section 2.13(a) (any such Lender, an
“Affected Lender”), then such Affected Lender shall use reasonable efforts to
promptly designate a different one of its lending offices or to assign its
rights and obligations hereunder to another of its offices or branches, if
(i) in the reasonable judgment of such Affected Lender, such designation or
assignment would eliminate or reduce amounts payable pursuant to Section
2.12(d)(i) or Section 2.13(a), as applicable, and (ii) in the reasonable
judgment of such Affected Lender, such designation or assignment would not
subject it to any material unreimbursed cost or expense and would not otherwise
be materially disadvantageous to it. Borrowers agree to pay all reasonable
out-of-pocket costs and expenses incurred by such Affected Lender in connection
with any such designation or assignment. If, after such reasonable efforts, such
Affected Lender does not so designate a different one of its lending offices or
assign its rights to another of its offices or branches so as to eliminate
Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant
to Section 2.12(d)(i) or Section 2.13(a), as applicable, then Borrowers (without
prejudice to any amounts then due to such Affected Lender under
Section 2.12(d)(i) or Section 2.13(a), as applicable) may, unless prior to the
effective date of any such assignment the Affected Lender withdraws its request
for such additional amounts under Section 2.12(d)(i) or Section 2.13(a), as
applicable, designate another Lender reasonably acceptable to Agent to purchase
the Obligations owed to such Affected Lender and such Affected Lender’s
Commitments hereunder (a “Replacement Lender”), such Affected Lender shall
assign to the Replacement Lender its Obligations and Commitments, pursuant to an
Assignment and Acceptance Agreement, and upon such purchase by the Replacement
Lender, such Replacement Lender shall be deemed to be a “Lender” for purposes of
this Agreement and such Affected Lender shall cease to be a “Lender” for
purposes of this Agreement.
     2.14 Joint and Several Liability of Borrowers.
               (a) Each Borrower is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.
               (b) Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including any Obligations arising under
this Section 2.14), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without
preferences or distinction among them.
               (c) If and to the extent that any Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation.
               (d) The Obligations of each Borrower under the provisions of this
Section 2.14 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.

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               (e) Except as otherwise expressly provided in this Agreement,
each Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Advances or Letters of Credit issued under or pursuant
to this Agreement, notice of the occurrence of any Default, Event of Default, or
of any demand for any payment under this Agreement, notice of any action at any
time taken or omitted by Agent or Lenders under or in respect of any of the
Obligations, any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and other
formalities of every kind in connection with this Agreement (except as otherwise
provided in this Agreement). Each Borrower hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by Agent or Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of Agent or any Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.14 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this
Section 2.14, it being the intention of each Borrower that, so long as any of
the Obligations hereunder remain unsatisfied, the Obligations of each Borrower
under this Section 2.14 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each Borrower under
this Section 2.14 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or Agent or any Lender.
               (f) Each Borrower represents and warrants to Agent and Lenders
that such Borrower is currently informed of the financial condition of Borrowers
and of all other circumstances which a diligent inquiry would reveal and which
bear upon the risk of nonpayment of the Obligations. Each Borrower further
represents and warrants to Agent and Lenders that such Borrower has read and
understands the terms and conditions of the Loan Documents. Each Borrower hereby
covenants that such Borrower will continue to keep informed of Borrowers’
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
               (g) Each Borrower waives all rights and defenses that such
Borrower may have because the Obligations are at any time secured by Real
Property. This means, among other things:
                    (i) Agent and Lenders may collect from such Borrower without
first foreclosing on any Collateral pledged by such Borrower, and
                    (ii) if Agent or any Lender forecloses on any Real Property
Collateral pledged by Borrowers:
                         (A) the amount of the Obligations may be reduced only
by the price for which that Real Property Collateral is sold at the foreclosure
sale, even if that Real Property Collateral is worth more than the sale price,
and
                         (B) Agent and Lenders may collect from such Borrower
even if Agent or any Lender, by foreclosing on the Real Property Collateral, has
destroyed any right such Borrower may have to collect from the other Borrowers.
This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property.

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               (h) The provisions of this Section 2.14 are made for the benefit
of Agent, Lenders and their respective successors and assigns, and may be
enforced by it or them from time to time against any or all Borrowers as often
as occasion therefor may arise and without requirement on the part of Agent or
such Lenders, successors or assigns first to marshal any of its or their claims
or to exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 2.14 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied and all of the Commitments have been terminated. If at any time,
any payment, or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by Agent or any Lender upon
the insolvency, bankruptcy or reorganization of Parent or any of its
Subsidiaries, or otherwise, the provisions of this Section 2.14 will forthwith
be reinstated in effect, as though such payment had not been made.
               (i) Until the Obligations have been paid in full and all of the
Commitments terminated, each Borrower hereby agrees that it will not enforce any
of its rights of contribution or subrogation against any other Borrower with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to Agent or Lenders with respect to any of
the Obligations or any collateral security therefor until such time as all of
the Obligations have been paid in full in cash and all of the Commitments have
been terminated. Any claim which any Borrower may have against any other
Borrower with respect to any payments to Agent or any Lender hereunder or under
any other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any Borrower, its debts or its assets, whether
voluntary or involuntary, all such Obligations shall be paid in full in cash
before any payment or distribution of any character, whether in cash, securities
or other property, shall be made to any other Borrower therefor.
               (j) Each Borrower hereby agrees that, after the occurrence and
during the continuance of any Default or Event of Default, the payment of any
amounts due with respect to the indebtedness owing by any Borrower to any other
Borrower is hereby subordinated to the prior payment in full in cash of the
Obligations. Each Borrower hereby agrees that after the occurrence and during
the continuance of any Default or Event of Default, such Borrower will not
demand, sue for or otherwise attempt to collect any indebtedness of any other
Borrower owing to such Borrower until the Obligations shall have been paid in
full in cash. If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with Section 2.4(b).
          2.15 Increase in Commitments.
               (a) Request for Increase. At any time prior to the date that is
six months prior to the Maturity Date and so long as no Default or Event of
Default has occurred and is continuing or would otherwise arise as a result
thereof, upon notice to Agent (which shall promptly notify Lenders),
Administrative Borrower may request an increase in the Total Commitment in an
amount of up to $15,000,000 (such increase, the “Commitment Increase”). At the
time of sending such notice, Administrative Borrower (in consultation with
Agent) shall specify the time period within which each Lender is requested to
respond (which shall in no event be more than 10 Business Days or less than 5
Business Days from the date of delivery of such notice to Lenders).
Administrative Borrower may only make one request for a Commitment Increase
during the term of this Agreement.
               (b) Lender Elections to Increase. Each Lender shall notify Agent
within such time period whether or not it agrees to increase its Commitment and,
if so, whether by an amount equal to, greater than, or less than its Pro Rata
Share of the Commitment Increase. Any Lender not responding within such time
period shall be deemed to have declined to increase its Commitment.

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               (c) Notification by Agent; Additional Commitment Lenders. Agent
shall notify Administrative Borrower and each Lender of Lenders’ responses to
the request for the Commitment Increase. If the existing Lenders decline to
increase their Commitments, or decline to increase their Commitments to the full
amount of the Commitment Increase, then, Agent may, at its option, (i) invite
one or more other new lenders to become a Lender hereunder and to issue
Commitments in an amount equal to the amount of the Commitment Increase not
accepted by the existing Lenders, or (ii) request WFF, in its capacity as a
Lender, to increase (and, if requested, or if no lender commits to provide a
Commitment at Agent’s invitation under clause (i) above, WFF hereby irrevocably
agrees to increase) its Commitment in an amount equal to the amount of the
Commitment Increase not accepted by the existing Lenders or issued by any new
lenders (each Lender increasing or issuing a Commitment under this Section 2.15,
an “Additional Commitment Lender”).
               (d) Effective Date and Allocations. If the Total Commitment is
increased in accordance with this Section 2.15, Agent shall determine the
effective date (the “Increase Effective Date”) and the final allocation of the
Commitment Increase. Agent shall promptly notify Administrative Borrower and
Lenders of the final allocation of the Commitment Increase and the Increase
Effective Date (which shall be no later than 5 Business Days after the later of
(x) the date on which Agent has completed the allocation of the Commitment
Increase pursuant to Section 2.15(c) and (y) the date on which all conditions to
effectiveness of the Commitment Increase set forth in Section 2.15(e) have been
satisfied) and, on the Increase Effective Date, (i) the Total Commitment under,
and for all purposes of, this Agreement shall be increased by the aggregate
amount of the Commitment Increase, and (ii) Schedule C-1 shall be deemed
modified, without further action, to reflect the revised Total Commitment and
each Lender’s Commitment.
               (e) Conditions to Effectiveness of Commitment Increase. As a
condition precedent to the Commitment Increase: (i) Administrative Borrower
shall have delivered to Agent a certificate of each Loan Party dated as of the
Increase Effective Date (with sufficient copies for each Lender) signed by a
responsible officer of such Loan Party (A) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to the Commitment
Increase, and (B) in the case of Parent and Borrowers, certifying that, before
and after giving effect to the Commitment Increase, the representations and
warranties contained in Section 4 and the other Loan Documents are true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case such
representations and warranties are true and correct in all material respects
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) as of such earlier date; (ii) Loan Parties,
Agent, and any Additional Commitment Lender that is not an existing Lender shall
have executed and delivered a joinder to the Loan Documents in such form as
Agent shall reasonably request; (iii) Borrowers shall have paid to Agent the
fees set forth in the Fee Letter with respect to the Commitment Increase;
(iv) Loan Parties shall have delivered to Agent and Lenders an opinion or
opinions reasonably satisfactory to Agent from counsel to Loan Parties
reasonably satisfactory to Agent and dated the Increase Effective Date; (v) Loan
Parties and Additional Commitment Lenders shall have delivered such other
instruments, documents and agreements as Agent shall reasonably request; and
(vi) no Default or Event of Default shall have occurred and be continuing either
before or after giving effect to the Commitment Increase. Borrowers shall prepay
any Advances outstanding on the Increase Effective Date (and pay any additional
amounts required pursuant to Section 2.12) to the extent necessary to keep the
outstanding Advances ratable with the revised Pro Rata Shares of the Total
Commitment that arise from any nonratable increase in the Commitments under this
Section 2.15; provided that Borrowers may use the proceeds of Advances from
Additional Commitment Lenders to make such payments, which payments shall be
applied, first, to that portion of the principal amount of the Advances
composing Base Rate Loans, and second, to that portion of the principal amount
of the Advances composing LIBOR Rate Loans.
               (f) Conflicting Provisions. This Section 2.15 shall supersede any
provisions in Section 14.1 to the contrary.

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3. CONDITIONS; TERM OF AGREEMENT.
     3.1 Conditions Precedent to the Initial Extension of Credit. The obligation
of each Lender to make its initial extension of credit provided for hereunder,
is subject to the fulfillment, to the satisfaction of Agent and each Lender of
each of the conditions precedent set forth on Schedule 3.1 (the making of such
initial extension of credit by a Lender being conclusively deemed to be its
satisfaction or waiver of the conditions precedent ).
     3.2 Conditions Precedent to all Extensions of Credit. The obligation of the
Lender Group (or any member thereof) to make any Advances hereunder (or to
extend any other credit hereunder) at any time shall be subject to the following
conditions precedent:
               (a) the representations and warranties of Parent or its
Subsidiaries contained in this Agreement or in the other Loan Documents shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date of such extension of credit, as though made on and as of such date
(except to the extent that such representations and warranties relate solely to
an earlier date in which case such representations and warranties shall only be
required to be true and correct in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that are already qualified or modified by materiality in the text
thereof) on such earlier date); and
               (b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof.
The submission by Administrative Borrower to Agent of a request for each Advance
(or other extension of credit) hereunder, and Borrowers’ acceptance of the
proceeds of such Advance (or other extension of credit), shall each be deemed to
be a representation and warranty by each Borrower on the date of such Advance
(or other extension of credit) that each of the foregoing conditions precedent
has been satisfied on the date of such Advance (or other extension of credit).
          3.3 Conditions Subsequent to Effectiveness. As an accommodation to
Parent and Borrowers, the Lender Group has agreed to execute this Agreement and
to make extensions of credit hereunder notwithstanding the failure by Parent and
Borrowers to satisfy the conditions set forth on Schedule 3.3 on or before the
Closing Date. In consideration of such accommodation, Parent and Borrowers agree
that, in addition to all other terms, conditions and provisions set forth in
this Agreement and the other Loan Documents, including those conditions set
forth in Section 3.1, Parent and Borrowers shall satisfy each of the conditions
subsequent set forth on Schedule 3.3 on or before the date applicable thereto
(it being understood that (a) the failure by Parent or Borrowers to perform or
cause to be performed any such unsatisfied condition subsequent on or before the
date applicable thereto shall constitute an Event of Default and (b) to the
extent that the existence of any such condition subsequent would otherwise cause
any representation, warranty or covenant in this Agreement or any other Loan
Document to be breached, the Required Lenders hereby waive such breach for the
period from the Closing Date until the date on which such condition subsequent
is required to be fulfilled pursuant to this Section 3.3).
     3.4 Term. This Agreement shall continue in full force and effect for a term
ending on August 31, 2014 (the “Maturity Date”). The foregoing notwithstanding,
the Lender Group, upon the election of the Required Lenders, shall have the
right to terminate its obligations under this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of Default.
     3.5 Effect of Termination. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to outstanding Letters of Credit and including all Bank Product
Obligations) immediately shall become due and payable without notice or demand
(including the requirement that Borrowers provide (a) Letter of Credit
Collateralization, and (b) Bank Product Collateralization). No termination of
this Agreement, however, shall relieve or discharge Parent or its Subsidiaries
of their duties, Obligations, or covenants hereunder or under any other Loan

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Document and the Agent’s Liens in the Collateral shall remain in effect until
all Obligations have been paid in full and the Lender Group’s obligations to
provide additional credit hereunder have been terminated. When this Agreement
has been terminated and all of the Obligations have been paid in full and the
Lender Group’s obligations to provide additional credit under the Loan Documents
have been terminated irrevocably, Agent will, at Borrowers’ sole expense,
execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, whether or not, as of record, the
Agent’s Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.
     3.6 Early Termination by Borrowers. Borrowers have the option, at any time
upon 10 Business Days prior written notice to Agent, to terminate this Agreement
and terminate the Commitments hereunder by paying to Agent the Obligations
(including (a) providing Letter of Credit Collateralization with respect to the
then existing Letter of Credit Usage, and (b) providing Bank Product
Collateralization with respect to the then existing Bank Products), in full.
4. REPRESENTATIONS AND WARRANTIES.
               In order to induce the Lender Group to enter into this Agreement,
each of Parent and Borrowers makes the following representations and warranties
to the Lender Group which shall be true, correct, and complete, in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof), as of the date hereof, and shall be true,
correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
Closing Date and at and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of
such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
          4.1 Due Organization and Qualification; Subsidiaries.
               (a) Each Loan Party (i) is duly organized and existing and in
good standing under the laws of the jurisdiction of its organization, (ii) is
qualified to do business in any state where the failure to be so qualified
reasonably could be expected to result in a Material Adverse Change, and
(iii) has all requisite power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be conducted, to
enter into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.
               (b) Set forth on Schedule 4.1(b) is a complete and accurate
description of the authorized capital Stock of Parent, by class, and, as of the
Closing Date, a description of the number of shares of each such class that are
issued and outstanding. Other than as described on Schedule 4.1(b), there are no
subscriptions, options, warrants, or calls relating to any shares of Parent’s
capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. Parent is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
               (c) Set forth on Schedule 4.1(c) (as such Schedule may be updated
from time to time to reflect changes permitted to be made under Section 5.11),
is a complete and accurate list of Parent’s direct and indirect Subsidiaries,
showing: (i) the number of shares of each class of common and preferred Stock
authorized for each of such Subsidiaries, and (ii) the number and the percentage
of the outstanding shares of each such class owned directly or indirectly by
Parent. All of the outstanding capital Stock of each such Subsidiary has been
validly issued and is fully paid and non-assessable.
               (d) Except as set forth on Schedule 4.1(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Parent’s
Subsidiaries’ capital Stock, including any right of conversion or

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exchange under any outstanding security or other instrument. Neither Parent nor
any of its Subsidiaries is subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire any shares of Parent’s
Subsidiaries’ capital Stock or any security convertible into or exchangeable for
any such capital Stock.
     4.2 Due Authorization; No Conflict.
               (a) As to each Loan Party, the execution, delivery, and
performance by such Loan Party of the Loan Documents to which it is a party have
been duly authorized by all necessary action on the part of such Loan Party.
               (b) As to each Loan Party, the execution, delivery, and
performance by such Loan Party of the Loan Documents to which it is a party do
not and will not (i) violate any material provision of federal, state, or local
law or regulation applicable to any Loan Party or its Subsidiaries, the
Governing Documents of any Loan Party or its Subsidiaries, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
Material Contract of any Loan Party or its Subsidiaries except to the extent
that any such conflict, breach or default could not individually or in the
aggregate reasonably be expected to have a Material Adverse Change, (iii) result
in or require the creation or imposition of any Lien of any nature whatsoever
upon any assets of any Loan Party, other than Permitted Liens, or (iv) require
any approval of any Loan Party’s holders of Stock or any approval or consent of
any Person under any Material Contract of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect and
except, in the case of Material Contracts, for consents or approvals, the
failure to obtain could not individually or in the aggregate reasonably be
expected to cause a Material Adverse Change.
     4.3 Governmental Consents. The execution, delivery, and performance by each
Loan Party of the Loan Documents to which such Loan Party is a party and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent, or approval of, or notice to,
or other action with or by, any Governmental Authority, other than consents or
approvals that have been obtained and that are still in force and effect and
except for filings and recordings with respect to the Collateral to be made, or
otherwise delivered to Agent for filing or recordation, as of the Closing Date.
     4.4 Binding Obligations; Perfected Liens.
               (a) Each Loan Document has been duly executed and delivered by
each Loan Party that is a party thereto and is the legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally.
               (b) The Agent’s Liens are validly created, perfected (other than
(i) in respect of motor vehicles and (ii) any Deposit Accounts and Securities
Accounts not subject to a Control Agreement as permitted by Section 6.11, and
subject only to the filing of financing statements and the recordation of any
Mortgages) and first priority Liens, subject only to Permitted Liens.
     4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its
Subsidiaries has (i) good and legal title to (in the case of fee interests in
Real Property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), and (iii) good and marketable title to
(in the case of all other personal property), all of their respective assets
reflected in their most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements to the extent permitted hereby. All of such assets are free
and clear of Liens except for Permitted Liens.

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     4.6 Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims.
               (a) The name of (within the meaning of Section 9-503 of the Code)
and jurisdiction of organization of each Loan Party and each of its Subsidiaries
is set forth on Schedule 4.6(a) (as such Schedule may be updated from time to
time to reflect changes permitted to be made under Section 6.5).
               (b) The chief executive office of each Loan Party and each of its
Subsidiaries is located at the address indicated on Schedule 4.6(b) (as such
Schedule may be updated from time to time to reflect changes permitted to be
made under Section 5.15).
               (c) Each Loan Party’s and each of its Subsidiaries’ tax
identification numbers and organizational identification numbers, if any, are
identified on Schedule 4.6(c) (as such Schedule may be updated from time to time
to reflect changes permitted to be made under Section 6.5).
               (d) As of the Closing Date, no Loan Party and no Subsidiary of a
Loan Party holds any commercial tort claims that exceed $250,000 in amount,
except as set forth on Schedule 4.6(d).
     4.7 Litigation.
               (a) All disclosures regarding actions, suits, or proceedings
pending or, to the best knowledge of Parent and Borrowers, threatened against a
Loan Party or any of its Subsidiaries, which have been disclosed as part of
public filings made by Parent as required in compliance with the requirements of
the SEC are accurate and complete in all material respects.
               (b) There are no actions, suits, or proceedings pending or, to
the best knowledge of Parent and Borrowers, threatened against a Loan Party or
any of its Subsidiaries that either individually or in the aggregate could
reasonably be expected to result in a Material Adverse Change.
     4.8 Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is
in violation of any applicable laws, rules, regulations, executive orders, or
codes (including Environmental Laws and HIPAA Laws and Regulations) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Change, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Change.
     4.9 No Material Adverse Change. All financial statements relating to the
Loan Parties and their Subsidiaries that have been delivered by any Loan Party
or any of its Subsidiaries to Agent have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes, being subject to year-end audit adjustments and the exclusion of
Specified Subsidiaries) and present fairly in all material respects, the Loan
Parties’ and their Subsidiaries’ consolidated financial condition as of the date
thereof and results of operations for the period then ended. Since March 31,
2009, no event, circumstance, or change has occurred that has or could
reasonably be expected to result in a Material Adverse Change with respect to
the Loan Parties and their Subsidiaries.
     4.10 Fraudulent Transfer.
               (a) Each Loan Party is Solvent.
               (b) No transfer of property is being made by any Loan Party and
no obligation is being incurred by any Loan Party in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of such
Loan Party.

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     4.11 Employee Benefits. No Loan Party, none of their Subsidiaries, nor any
of their ERISA Affiliates maintains or contributes to any Benefit Plan.
     4.12 Environmental Condition. Except as set forth on Schedule 4.12, (a) to
Parent’s and Borrowers’ knowledge, no Loan Party’s or its Subsidiaries’
properties or assets has ever been used by a Loan Party, its Subsidiaries, or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such disposal,
production, storage, handling, treatment, release or transport was in violation,
in any material respect, of any applicable Environmental Law, (b) to Parent’s
and Borrowers’ knowledge, no Loan Party’s or its Subsidiaries’ properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal site, (c) no
Loan Party nor any of its Subsidiaries has received notice that a Lien arising
under any Environmental Law has attached to any revenues or to any Real Property
owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor
any of its Subsidiaries nor any of their respective operations is, nor to
Parent’s and Borrowers’ knowledge, is any facility used by any Loan Party or any
Subsidiary thereof, subject to any outstanding written order, consent decree, or
settlement agreement with any Person relating to any Environmental Law or
Environmental Liability that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Change.
     4.13 Intellectual Property.
               (a) Each Loan Party and each of its Subsidiaries owns, or holds
licenses in, all trademarks, trade names, copyrights, patents, and licenses that
are necessary to the conduct of its business as currently conducted, and
attached hereto as Schedule 4.13 (as updated from time to time) is a true,
correct, and complete listing of all material trademarks, trade names,
copyrights, patents, and licenses as to which Parent or one of its Subsidiaries
is the owner or is an exclusive licensee; provided, however, that Borrowers may
amend Schedule 4.13 to add additional intellectual property from time to time
upon written notice to Agent not more than 5 Business Days after the date on
which the applicable Loan Party or its Subsidiary acquires any such property
after the Closing Date.
               (b) Parent and each of its Subsidiaries has taken reasonable
measures to protect the secrecy, confidentiality and value of all of its
material trade secrets (including, without limitation, entering into appropriate
confidentiality agreements with all officers, directors, employees, and other
Persons with access to such trade secrets). To the knowledge of Parent and each
Borrower, neither Parent’s nor any of its Subsidiaries’ material trade secrets
have been disclosed to any Person other than to Persons who had a need to know
and use such trade secrets in the ordinary course of business and who executed
appropriate confidentiality agreements prohibiting unauthorized disclosure of
such trade secrets.
     4.14 Leases. Each Loan Party and its Subsidiaries enjoy peaceful and
undisturbed possession under all leases material to their business and to which
they are parties or under which they are operating, and, subject to Permitted
Protests, all of such material leases are valid and subsisting and no material
default by the applicable Loan Party or its Subsidiaries exists under any of
them.
     4.15 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15
(as updated pursuant to the provisions of the Security Agreement from time to
time) is a listing of all of the Loan Parties’ and their Subsidiaries’ Deposit
Accounts and Securities Accounts, including, with respect to each bank or
securities intermediary (a) the name and address of such Person, and (b) the
account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.
     4.16 Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent or any Lender (including all information contained in the Schedules hereto
or in the other Loan Documents) for purposes of or in connection with this
Agreement, the other Loan Documents, or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to
Agent or any Lender will be, true and accurate, in all material respects, on the
date as of which such information is dated or certified and not incomplete by
omitting to state any fact necessary to make

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such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Agent, such additional
Projections represent Parent’s and Borrowers’ good faith estimate of the Loan
Parties’ and their Subsidiaries’ future performance for the periods covered
thereby based upon assumptions believed by Parent and Borrowers to be reasonable
at the time of the delivery thereof to Agent (it being understood that such
projections and forecasts are subject to uncertainties and contingencies, many
of which are beyond the control of the Loan Parties and their Subsidiaries and
no assurances can be given that such projections or forecasts will be realized).
     4.17 Material Contracts. Set forth on Schedule 4.17 (as updated from time
to time) is a reasonably detailed description of the Material Contracts of each
Loan Party and its Subsidiaries; provided, however, that Borrowers may amend
Schedule 4.17 to add additional Material Contracts so long as such amendment
occurs by written notice to Agent at the time that Parent provides its quarterly
financial statements pursuant to Section 5.1. Except for matters which, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change, each Material Contract (other than those that have
expired at the end of their normal terms) (a) is in full force and effect and is
binding upon and enforceable against the applicable Loan Party or its Subsidiary
and, to the best of Parent’s and Borrowers’ knowledge, each other Person that is
a party thereto in accordance with its terms, (b) has not been otherwise amended
or modified (other than amendments or modifications permitted by
Section 6.7(d)), and (c) is not in default due to the action or inaction of the
applicable Loan Party or its Subsidiary.
     4.18 Patriot Act. To the extent applicable, each Loan Party is in
compliance, in all material respects, with the (a) Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
other enabling legislation or executive order relating thereto, and (b) Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of
the proceeds of the loans made hereunder will be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.
     4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list
of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding
immediately prior to the Closing Date that is to remain outstanding after the
Closing Date and such Schedule accurately sets forth the aggregate principal
amount of such Indebtedness as of the Closing Date.
     4.20 Payment of Taxes. Except as otherwise permitted under Section 5.5, all
tax returns and reports of each Loan Party and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon a Loan Party and its Subsidiaries and upon their respective assets,
income, businesses and franchises that are due and payable have been paid when
due and payable. Each Loan Party and each of its Subsidiaries have made adequate
provision in accordance with GAAP for all taxes not yet due and payable. Neither
Parent nor any Borrower knows of any proposed tax assessment against a Loan
Party or any of its Subsidiaries that is not being actively contested by such
Loan Party or such Subsidiary diligently, in good faith, and by appropriate
proceedings; provided such reserves or other appropriate provisions, if any, as
shall be required in conformity with GAAP shall have been made or provided
therefor. No Loan Party nor any of its Subsidiaries has ever been a party to any
understanding or arrangement constituting a “tax shelter” within the meaning of
Section 6662(d)(2)(C)(iii) of the IRC or within the meaning of Section 6111(c)
or Section 6111(d) of the IRC as in effect immediately prior to the enactment of
the American Jobs Creation Act of 2004, or has ever “participated” in a
“reportable transaction” within the meaning of Treasury
Regulation Section 1.6011-4, except as would not be reasonably expected to,
individually or in the aggregate, result in a Material Adverse Change.

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     4.21 Margin Stock. No Loan Party nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the loans made to Borrowers will be used to purchase or carry
any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.
     4.22 Governmental Regulation. No Loan Party nor any of its Subsidiaries is
subject to regulation under the Federal Power Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable. No Loan Party nor any of its
Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered
investment company” as such terms are defined in the Investment Company Act of
1940.
     4.23 OFAC. No Loan Party nor any of its Subsidiaries is in violation of any
of the country or list based economic and trade sanctions administered and
enforced by OFAC. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned
Person or a Sanctioned Entity, (b) has a more than 10% of its assets located in
Sanctioned Entities, or (c) derives more than 10% of its revenues from
investments in, or transactions with Sanctioned Persons or Sanctioned Entities.
The proceeds of any Advance will not be used to fund any operations in, finance
any investments or activities in, or make any payments to, a Sanctioned Person
or a Sanctioned Entity.
     4.24 Holding Company; Inactive Subsidiary.
               (a) Parent is a holding company and does not have any material
liabilities (other than liabilities arising under the Loan Documents), own any
material assets (other than the Stock of it Subsidiaries) or engage in any
operations or business (other than the ownership of the Stock of its
Subsidiaries).
               (b) The Inactive Subsidiaries do not have any material
liabilities, own any material assets or engage in any operations or business.
     4.25 Eligible Accounts. As to each Account that is identified by
Administrative Borrower as an Eligible Account in a Borrowing Base Certificate
submitted to Agent, such Account is (a) a bona fide existing payment obligation
of the applicable Account Debtor created by the sale and delivery of Inventory
or the rendition of services to such Account Debtor in the ordinary course of
such Borrower’s business, (b) owed to such Borrower without any known defenses,
disputes, offsets, counterclaims, or rights of return or cancellation, and
(c) not excluded as ineligible by virtue of one or more of the excluding
criteria set forth in the definition of Eligible Accounts.
     4.26 Location of Inventory and Equipment. The Inventory and Equipment
(other than vehicles or Equipment out for repair, and servers and computers of
the Loan Parties that are located at customer and other offsite locations in the
ordinary course of the Loan Parties’ business operations) of the Loan Parties
and their Subsidiaries are not stored with a bailee, warehouseman, or similar
party and are located only at, or in-transit between, the locations identified
on Schedule 4.26 (as such Schedule may be updated pursuant to Section 5.15).
     4.27 Inventory Records. Each Loan Party keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Subsidiaries’ Inventory and the book value thereof.
     4.28 Customers and Suppliers. There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the
business relationship between any Loan Party, on the one hand, and any customer
or supplier or any group thereof, on the other hand, that either individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Change; and there exists no

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present state of facts or circumstances that could give rise to or result in any
such termination, cancellation, limitation, modification or change.
          4.29 HIPAA.
               (a) Each Loan Party and each of its Subsidiaries has implemented
appropriate measures required for it to comply in all material respects with its
obligations as a “Business Associate” and as an “agent” or “subcontractor” of a
Business Associate, as those terms are used in the Health Insurance Portability
and Accountability Act of 1996 (as amended, “HIPAA”) and/or the privacy
regulations promulgated thereunder (45 C.F.R. 160 and 164). As of the date of
this Agreement, neither the Loan Parties nor any of their Subsidiaries is a
Covered Entity as defined by HIPAA and/or the regulations, including, without
limitation, the privacy standards and security standards, promulgated thereunder
(collectively, the “HIPAA Laws and Regulations”). With respect to any
HIPAA-related contractual privacy and security commitments for “Protected Health
Information” (as that term is defined in the HIPAA Laws and Regulations), for
which compliance by any Loan Party or any of its Subsidiaries is required
(collectively, the “HIPAA Commitments”),
                    (i) the Loan Parties and their Subsidiaries are in material
compliance with the HIPAA Commitments;
                    (ii) the transactions contemplated by this Agreement will
not violate any of the HIPAA Commitments;
                    (iii) the Loan Parties and their Subsidiaries have not
received written inquiries from the U.S. Department of Health and Human Services
or any other Governmental Authority regarding their compliance with the HIPAA
Commitments;
                    (iv) the HIPAA Commitments have not been rejected by any
applicable certification organization which has reviewed such HIPAA Commitments
or to which any such HIPAA Commitment has been submitted; and
                    (v) the HIPAA Commitments do not violate HIPAA laws and
regulations in any material respect.
               (b) Each Loan Party and each of its Subsidiaries has either
entered into valid and written business associate agreements or similar privacy
agreements, to the extent required in the HIPAA Commitments, with appropriate
parties having access to “Protected Health Information” including, without
limitation, all individuals involved in creating, editing or handling medical
transcriptions at the request of, for or on behalf of, any Loan Party or any of
its Subsidiaries.
               (c) Neither any Loan Party nor any of its Subsidiaries is aware
of any material violation of HIPAA Laws and Regulations or of any of the HIPAA
Commitments either by it or any of its subcontractors or agents.
               (d) The Loan Parties and their Subsidiaries are taking
appropriate steps to comply with and, where applicable, will be and remain in
material compliance with, the Health Information Technology for Economic and
Clinical Health Act (the “HITECH Act”).
     4.30 Health Laws and Regulations.
               (a) Except as otherwise set forth in Schedule 4.30, the Loan
Parties and their Subsidiaries are conducting and have conducted their business
and operations in compliance in all material respects with, and neither any Loan
Party nor any of its Subsidiaries has engaged in any activities that would
constitute a violation, in any material respect, of applicable civil or criminal
statutes, laws, ordinances, rules and regulations of any federal, state, local
or foreign Governmental Authority with respect to regulatory matters relating to
the provision, administration, and/or payment for healthcare products or
services

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(collectively, “Healthcare Laws”), including, without limitation, to the extent
applicable: (i) rules and regulations governing the operation and administration
of Medicare, Medicaid, or other federal health care programs; (ii) 42 U.S.C.
Section 1320a-7(b), commonly referred to as the “Federal Anti-Kickback Statute,”
(iii) 42 U.S.C. Section 1395nn, commonly referred to as the “Stark Law,” (iv) 31
U.S.C. Sections 3729-33, commonly referred to as the “False Claims Act” and
(v) rules and regulations of the U.S. Food and Drug Administration.
               (b) Except as otherwise set forth in Schedule 4.30, (i) neither
any Loan Party nor any of its Subsidiaries has received any written notice or
communication from any Governmental Authority alleging noncompliance with any
Healthcare Laws; (ii) there is no civil, criminal or administrative action,
suit, demand, claim, complaint, hearing, investigation, notice, demand letter,
warning letter, proceeding or request for information related to noncompliance
with, or otherwise involving, any Healthcare Laws pending against any Loan Party
or any of its Subsidiaries; (iii) the Loan Parties and their Subsidiaries have
no material liability (whether actual or contingent) for failure to comply with
any Healthcare Laws; (iv) there has not been any material violation of any
Healthcare Laws by any Loan Party or any of its Subsidiaries in its submissions
or reports to any Governmental Authority that could reasonably be expected to
require investigation, corrective action or enforcement action; (v) neither any
Loan Party nor any of its Subsidiaries has been debarred or excluded from
participation in Medicare, Medicaid, or any other federal or state healthcare
program; and (vi) each Loan Party and each of its Subsidiaries has maintained,
in all material respects, all records required to be kept by it under any
Healthcare Laws.
5. AFFIRMATIVE COVENANTS.
               Parent and each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
the Loan Parties shall and shall cause each of their Subsidiaries to comply with
each of the following:
     5.1 Financial Statements, Reports, Certificates. Deliver to Agent, with
copies to each Lender, each of the financial statements, reports, and other
items set forth on Schedule 5.1 at the times specified therein. In addition,
Parent and each Borrower agrees that no Subsidiary of a Loan Party will have a
fiscal year different from that of Parent. In addition, Parent and each Borrower
agrees to maintain a system of accounting that enables Parent and each Borrower
to produce financial statements in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes, being subject to
year-end audit adjustments and the exclusion of Specified Subsidiaries). Each
Loan Party shall also (a) keep a reporting system that shows all additions,
sales, claims, and allowances with respect to its and its Subsidiaries’ sales,
and (b) maintain its billing systems/practices as approved by Agent prior to the
Closing Date and shall only make material modifications thereto with notice to,
and with the consent of, Agent.
     5.2 Collateral Reporting. Provide Agent (and if so requested by Agent, with
copies for each Lender) with each of the reports set forth on Schedule 5.2 at
the times specified therein. In addition, Parent and each Borrower agrees to use
the system of electronic collateral reporting as approved by Agent prior to the
Closing Date in order to provide electronic reporting of each of the items set
forth above and shall only make material modifications to such system with
notice to, and with the consent of, Agent.
     5.3 Existence. Except as otherwise permitted under Section 6.3, each Loan
Party to, and cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its existence (including being in good standing in its
jurisdiction of organization) and all rights and franchises, licenses and
permits material to its business.
     5.4 Maintenance of Properties. Maintain and preserve all of its assets that
are necessary or useful in the proper conduct of its business in good working
order and condition, ordinary wear, tear, and casualty excepted and Permitted
Dispositions excepted, and comply with the material provisions of all material
leases to which it is a party as lessee, so as to prevent the loss or forfeiture
thereof, unless such provisions are the subject of a Permitted Protest.

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     5.5 Taxes. Cause all assessments and taxes imposed, levied, or assessed
against any Loan Party or its Subsidiaries, or any of their respective assets or
in respect of any of its income, businesses, or franchises to be paid in full,
before delinquency or before the expiration of any extension period, except to
the extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest and so long as, in the case of an assessment or tax that has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such assessment or tax. Parent will and will cause each of its
Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of it and them by applicable laws, including those
laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and
federal income taxes, and will, upon request, furnish Agent with proof
reasonably satisfactory to Agent indicating that Parent and its Subsidiaries
have made such payments or deposits.
     5.6 Insurance. At Borrowers’ expense, maintain insurance respecting each of
the Loan Parties’ and their Subsidiaries’ assets wherever located, covering loss
or damage by fire, flood, theft, explosion, and all other hazards and risks as
ordinarily are insured against by other Persons engaged in the same or similar
businesses. Parent and each Borrower also shall maintain (with respect to each
of the Loan Parties and their Subsidiaries) business interruption, public
liability, and product liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation. All such policies of
insurance shall be with responsible and reputable insurance companies and in
such amounts as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated and located and in any
event in amount, adequacy and scope reasonably satisfactory to Agent. All
property insurance policies covering the Collateral are to be made payable to
Agent for the benefit of Agent and the Lenders, as their interests may appear,
in case of loss, pursuant to a standard loss payable endorsement with a standard
non contributory “lender” or “secured party” clause and are to contain such
other provisions as Agent may reasonably require to fully protect the Lenders’
interest in the Collateral and to any payments to be made under such policies.
All certificates of insurance are to be delivered to Agent, with the loss
payable and additional insured endorsement in favor of Agent and shall provide
for not less than 30 days (10 days in the case of non-payment) prior written
notice to Agent of the exercise of any right of cancellation. If Parent or any
Borrower fails to maintain such insurance, Agent may arrange for such insurance,
but at Borrowers’ expense and without any responsibility on Agent’s part for
obtaining the insurance, the solvency of the insurance companies, the adequacy
of the coverage, or the collection of claims. Administrative Borrower shall give
Agent prompt notice of any loss exceeding $750,000 covered by its casualty or
business interruption insurance. Upon the occurrence and during the continuance
of an Event of Default, Agent shall have the sole right to file claims under any
insurance policies, to receive, receipt and give acquittance for any payments
that may be payable thereunder, and to execute any and all endorsements,
receipts, releases, assignments, reassignments or other documents that may be
necessary to effect the collection, compromise or settlement of any claims under
any such insurance policies.
     5.7 Inspection. Permit Agent and each of its duly authorized
representatives or agents to visit any of its properties and inspect any of its
assets or books and records, to examine and make copies of its books and
records, and to discuss its affairs, finances, and accounts with, and to be
advised as to the same by, its officers and employees at such reasonable times
and intervals as Agent may designate and, so long as no Default or Event of
Default exists, with reasonable prior notice to Administrative Borrower.
     5.8 Compliance with Laws. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change.
     5.9 Environmental.
               (a) Keep any property either owned or operated by Parent or its
Subsidiaries free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens,

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               (b) comply, in all material respects, with Environmental Laws and
provide to Agent documentation of such compliance which Agent reasonably
requests,
               (c) promptly notify Agent of any release of a Hazardous Material
in any reportable quantity from or onto property owned or operated by Parent or
its Subsidiaries and take any Remedial Actions required to abate said release or
otherwise to come into compliance with applicable Environmental Law, and
               (d) promptly, but in any event within 5 Business Days of its
receipt thereof, provide Agent with written notice of any of the following:
(i) notice that an Environmental Lien has been filed against any of the real or
personal property of Parent or its Subsidiaries, (ii) commencement of any
Environmental Action or notice that an Environmental Action will be filed
against Parent or its Subsidiaries, and (iii) notice of a violation, citation,
or other administrative order which could reasonably be expected to result in a
Material Adverse Change.
     5.10 Disclosure Updates. Promptly and in no event later than 5 Business
Days after obtaining knowledge thereof, notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained, at the time it was
furnished, any untrue statement of a material fact or omitted to state any
material fact necessary to make the statements contained therein not misleading
in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not
cure or remedy the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the effect of
amending or modifying this Agreement or any of the Schedules hereto.
     5.11 Formation of Subsidiaries. At the time that any Loan Party forms any
direct or indirect Subsidiary, acquires any direct or indirect Subsidiary after
the Closing Date, or designates an Inactive Subsidiary as a non-Inactive
Subsidiary, such Loan Party shall (a) within 10 days of such formation,
acquisition or designation cause such Subsidiary to provide to Agent a joinder
to the Guaranty and the Security Agreement, together with such other security
documents (including mortgages with respect to any Real Property owned in fee of
such Subsidiary with a fair market value of at least $250,000), as well as
appropriate financing statements (and with respect to all property subject to a
mortgage, fixture filings), all in form and substance reasonably satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
to Permitted Liens) in and to the assets of such newly formed, acquired or
designated Subsidiary); provided that the Guaranty, the Security Agreement, and
such other security documents shall not be required to be provided to Agent with
respect to any Subsidiary of Parent that is a CFC if providing such documents
would result in adverse tax consequences or the costs to the Loan Parties of
providing such Guaranty, executing any security documents or perfecting the
security interests created thereby are unreasonably excessive (as determined by
Agent in consultation with Administrative Borrower) in relation to the benefits
of Agent and the Lenders of the security or guarantee afforded thereby,
(b) within 10 days of such formation, acquisition or designation (or such later
date as permitted by Agent in its sole discretion) provide to Agent a pledge
agreement and appropriate certificates and powers or financing statements,
hypothecating all of the direct or beneficial ownership interest in such
Subsidiary reasonably satisfactory to Agent; provided that only 662/3% of the
total outstanding voting Stock of any first tier Subsidiary of Parent that is a
CFC and none of the total outstanding voting Stock of any other Subsidiary of
such CFC shall be required to be pledged if hypothecating a greater amount would
result in adverse tax consequences or the costs to the Loan Parties of providing
such pledge or perfecting the security interests created thereby are
unreasonably excessive (as determined by Agent in consultation with
Administrative Borrower) in relation to the benefits of Agent and the Lenders of
the security or guarantee afforded thereby (which pledge shall be governed by
the laws of the jurisdiction of such Subsidiary), and (c) within 10 days of such
formation, acquisition or designation (or such later date as permitted by Agent
in its sole discretion) provide to Agent all other documentation, including one
or more opinions of counsel reasonably satisfactory to Agent, which in its
opinion is appropriate with respect to the execution and delivery of the
applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all Real Property owned in fee
and subject to a mortgage). Any document, agreement, or instrument executed or
issued pursuant to this Section 5.11 shall be a Loan Document.

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     5.12 Further Assurances. At any time upon the reasonable request of Agent,
execute or deliver to Agent any and all financing statements, fixture filings,
security agreements, pledges, assignments, endorsements of certificates of
title, mortgages, deeds of trust, opinions of counsel, and all other documents
(collectively, the “Additional Documents”) that Agent may reasonably request in
form and substance reasonably satisfactory to Agent, to create, perfect, and
continue perfected or to better perfect the Agent’s Liens in all of the assets
of Parent and its Subsidiaries (whether now owned or hereafter arising or
acquired, tangible or intangible, real or personal), to create and perfect Liens
in favor of Agent in any Real Property acquired by Parent or its Subsidiaries
after the Closing Date with a fair market value in excess of $250,000, and in
order to fully consummate all of the transactions contemplated hereby and under
the other Loan Documents); provided that the foregoing shall not apply to any
Subsidiary of Parent that is a CFC if providing such documents would result in
adverse tax consequences or the costs to the Loan Parties of providing such
documents are unreasonably excessive (as determined by Agent in consultation
with Administrative Borrower) in relating to the benefits of Agent and the
Lenders of the benefits afforded thereby. To the maximum extent permitted by
applicable law, Parent and each Borrower authorizes Agent to execute any such
Additional Documents in the applicable Loan Party’s or its Subsidiary’s name, as
applicable, and authorizes Agent to file such executed Additional Documents in
any appropriate filing office. In furtherance and not in limitation of the
foregoing, each Loan Party shall take such actions as Agent may reasonably
request from time to time to ensure that the Obligations are guarantied by the
Guarantors and are secured by substantially all of the assets of Parent and its
Subsidiaries and all of the outstanding Capital Stock of Borrower and Borrower’s
Subsidiaries (subject to limitations contained in the Credit Documents with
respect to Foreign Subsidiaries).
     5.13 Lender Meetings. At the reasonable request of Agent or of the Required
Lenders and upon reasonable prior notice, hold a meeting or conference call (at
a mutually agreeable location and time) with all Lenders who choose to attend
such meeting or conference call to review the financial results of the previous
fiscal year and the financial condition of Parent and its Subsidiaries and the
projections presented for the current fiscal year of Parent. Such meeting or
conference call, if so requested pursuant to this Section 5.13, shall occur
within 90 days after the close of each of Parent’s fiscal years during the term
of this Agreement.
     5.14 Material Contracts. Contemporaneously with the delivery of each
Compliance Certificate pursuant hereto, provide Agent with copies of (a) each
Material Contract entered into since the delivery of the previous Compliance
Certificate, and (b) each material amendment or modification of any Material
Contract entered into since the delivery of the previous Compliance Certificate.
     5.15 Location of Inventory and Equipment. Keep each Loan Parties’ and its
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for
repair, and servers and computers of the Loan Parties that are located at
customer and other offsite locations in the ordinary course of the Loan Parties’
business operations) only at the locations identified on Schedule 4.26 and their
chief executive offices only at the locations identified on Schedule 4.6(b);
provided, however, that Borrowers may amend Schedule 4.26 or Schedule 4.6(b) so
long as such amendment occurs by written notice to Agent not less than 10 days
prior to the date on which such Inventory or Equipment is moved to such new
location or such chief executive office is relocated and so long as such new
location is within the continental United States, and so long as, at the time of
such written notification, Borrowers provide Agent a Collateral Access Agreement
with respect thereto.
     5.16 HIPAA; HITECH Act; Healthcare Laws.
               (a) Comply in all material respects with and implement all such
measures required to comply in all material respects with their obligations as a
“Business Associate” and as an “agent” or “subcontractor” of a Business
Associate, as those terms are used in HIPAA and/or the privacy regulations
promulgated thereunder (45 C.F.R. 160 and 164).
               (b) Enter into valid and written business associate agreements or
similar privacy agreements, to the extent required in the HIPAA Commitments,
with appropriate parties having access to

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“Protected Health Information” (as that term is defined in the HIPAA Laws and
Regulations), including, without limitation, all individuals involved in
creating, editing or handling medical transcriptions at the request of, for or
on behalf of, any Loan Party or any of its Subsidiaries.
               (c) Take appropriate steps to comply in all material respects
with and, where applicable, remain in compliance in all material respects with
the HITECH Act.
     5.17 Health Laws and Regulations. Conduct their business and operations in
compliance in all material respects with applicable Healthcare Laws, including,
without limitation, to the extent applicable: (a) rules and regulations
governing the operation and administration of Medicare, Medicaid, or other
federal health care programs; (b) 42 U.S.C. Section 1320a-7(b), commonly
referred to as the “Federal Anti-Kickback Statute,” (c) 42 U.S.C. Section
1395nn, commonly referred to as the “Stark Law,” (d) 31 U.S.C. Sections 3729-33,
commonly referred to as the “False Claims Act” and (e) rules and regulations of
the U.S. Food and Drug Administration.
6. NEGATIVE COVENANTS.
               Parent and each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
the Loan Parties will not and will not permit any of their Subsidiaries to do
any of the following:
          6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except for Permitted Indebtedness.
          6.2 Liens. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens.
          6.3 Restrictions on Fundamental Changes.
               (a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock, except for (i) any merger or
consolidation between Loan Parties, provided that a Borrower must be the
surviving entity of any such merger or consolidation to which it is a party and
no merger or consolidation may occur between Parent and any other Loan Party,
(ii) any merger or consolidation between Loan Parties and Subsidiaries of Parent
that are not Loan Parties so long as such Loan Party is the surviving entity of
any such merger or consolidation and (iii) any merger or consolidation between
Subsidiaries of Parent that are not Loan Parties.
               (b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), except for (i) the liquidation or dissolution of
any Inactive Subsidiary and other non-operating Subsidiaries of Parent (other
than Loan Parties) with nominal assets and nominal liabilities, (ii) the
liquidation or dissolution of a Loan Party (other than Parent or a Borrower) or
any of its wholly-owned Subsidiaries so long as all of the assets (including any
interest in any Stock) of such liquidating or dissolving Loan Party or
Subsidiary are transferred to a Loan Party that is not liquidating or
dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Parent
that is not a Loan Party (other than any such Subsidiary the Stock of which (or
any portion thereof) is subject to a Lien in favor of Agent) so long as all of
the assets of such liquidating or dissolving Subsidiary are transferred to a
Subsidiary of Parent that is not liquidating or dissolving; or
               (c) Suspend or go out of a substantial portion of its or their
business, except as permitted pursuant to clauses (a) or (b) above or in
connection with the transactions permitted pursuant to Section 6.4.
     6.4 Disposal of Assets. Other than Permitted Dispositions, Permitted
Investments, or transactions expressly permitted by Sections 6.3 and 6.11,
convey, sell, lease, license, assign, transfer, or otherwise dispose of (or
enter into an agreement to convey, sell, lease, license, assign, transfer, or
otherwise dispose of) any of Parent’s or its Subsidiaries assets.

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     6.5 Change Name. Change Parent’s or any of its Subsidiaries’ name,
organizational identification number, jurisdiction of organization or
organizational identity; provided, however, that Parent or any of its
Subsidiaries may change their names upon at least 10 days prior written notice
to Agent of such change.
     6.6 Nature of Business. Make any change in the nature of its or their
business as described in Schedule 6.6 or acquire any properties or assets that
are not reasonably related to the conduct of such business activities; provided
that Parent and its Subsidiaries may engage in any business that is reasonably
related or ancillary to its or their business.
     6.7 Prepayments and Amendments.
               (a) Except in connection with Refinancing Indebtedness permitted
by Section 6.1,
                    (i) optionally prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness of Parent or its Subsidiaries, other than
(i) the Obligations in accordance with this Agreement, and (ii) Permitted
Intercompany Advances (other than the Permitted Intercompany Advances made by
Speech Machines Ltd. and MedQuist Canada Company to MedQuist Transcriptions,
Ltd. identified on Schedule 4.19),
                    (ii) make any payment on account of Indebtedness that has
been contractually subordinated in right of payment if such payment is not
permitted at such time under the subordination terms and conditions, or
                    (iii) make any payment on account of the Permitted
Intercompany Advances made by Speech Machines Ltd. and MedQuist Canada Company
to MedQuist Transcriptions, Ltd. identified on Schedule 4.19 prior to the date
that is 90 days after the Maturity Date, or
               (b) Directly or indirectly, amend, modify, or change any of the
terms or provisions of
                    (i) any agreement, instrument, document, indenture, or other
writing evidencing or concerning Indebtedness permitted under Section 6.1 other
than (A) the Obligations in accordance with this Agreement, (B) Permitted
Intercompany Advances, and (C) Indebtedness permitted under clauses (c), (f),
(h) and (i) of the definition of Permitted Indebtedness,
                    (ii) any Material Contract except to the extent that such
amendment, modification, alteration, increase, or change could not, individually
or in the aggregate, reasonably be expected to be materially adverse to the
interests of the Lenders, or
                    (iii) the Governing Documents of any Loan Party or any of
its Subsidiaries if the effect thereof, either individually or in the aggregate,
could reasonably be expected to be materially adverse to the interests of the
Lenders.
     6.8 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
     6.9 Distributions. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of Parent’s or any of its Subsidiaries’ Stock, of any
class, whether now or hereafter outstanding; provided, however, that, so long as
it is permitted by applicable law,
               (a) Subsidiaries of Parent may, or may make distributions so that
Parent may, pay the consideration necessary to consummate any Permitted
Acquisition in accordance with the agreements evidencing such Permitted
Acquisition,
               (b) Parent’s Subsidiaries may make distributions to Parent for
the sole purpose of allowing Parent to, and Parent shall use the proceeds
thereof solely to, pay federal and state income taxes and franchise taxes solely
arising out of the consolidated operations of Parent and its Subsidiaries, after
taking into

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account all available credits and deductions (provided that neither any Loan
Party nor any of its Subsidiaries shall make any distribution to Parent in any
amount greater than the share of such taxes arising out of Parent’s consolidated
net income), and
               (c) Parent may make any other distributions or declare or pay
dividends on, or purchase, acquire, redeem, or retire any of Parent’s or any of
it its Subsidiaries’ Stock. so long as (i) if during the 1 day period
immediately prior to such payment and immediately after giving effect to such
payment, the Revolver Usage is zero, (A) no Default or Event of Default shall
have occurred and be continuing or would result therefrom, (B) during the 1 day
period immediately prior to such distribution, Borrowers have, and immediately
after giving affect to such distribution, Borrowers are projected to have,
Excess Availability of at least $20,000,000 (notwithstanding the foregoing and
for purposes of clarity of this Section 6.9(c)(i)(B) only, the “Availability”
component of Excess Availability shall be determined pursuant to the most recent
Borrowing Base Certificate delivered pursuant to Section 5.2 (but after giving
effect to all Obligations (other than Bank Product Obligations) then outstanding
during the 1 day period immediately prior to such distribution and immediately
after giving affect to such distribution)), (C) no portion of the Advances are
used to make such distribution, and (D) Parent has provided Agent with written
notice containing (1) notice of its intent to make such distribution pursuant to
this Section 6.9(c)(i), (2) the amount of such proposed distribution, (3) a
certification that each of the conditions contained in clauses (A) through
(C) above will be satisfied both before and after giving effect to such proposed
distribution and (4) a confirmation, supported by reasonably detailed
calculations, that on a pro forma basis, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the
12 month period ended one year after the proposed date of consummation of such
proposed distribution and (ii) if during the 1 day period immediately prior to
such payment or immediately after giving effect to such payment, the Revolver
Usage is greater than zero, (A) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (B) during the 1 day
period immediately prior to such distribution, Borrowers have, and immediately
after giving affect to such distribution, the Borrowers are projected to have,
Excess Availability of at least $15,000,000, (C) Parent has provided Agent with
written notice containing (1) notice of its intent to make such distribution
pursuant to this Section 6.9(c)(ii), (2) the amount of such proposed
distribution, (3) a certification that each of the conditions contained in
clauses (A) and (B) above will be satisfied both before and after giving effect
to such proposed distribution and (4) a confirmation, supported by reasonably
detailed calculations, that on a pro forma basis, Parent and its Subsidiaries
are projected to be in compliance with the financial covenants in Section 7 for
the 12 month period ended one year after the proposed date of consummation of
such proposed distribution and (D) the aggregate amount of all such distribution
made pursuant to this clause (c)(ii), together with the aggregate amount of all
Investments made pursuant to clause (n)(ii) of the definition of “Permitted
Investments,” shall not exceed $4,500,000 in any 12 consecutive month period.
     6.10 Accounting Methods. Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP).
     6.11 Investments. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
(other than (a) an aggregate amount of not more than $250,000 at any one time,
in the case of Parent and its Subsidiaries (other than those that are CFCs),
(b) amounts deposited into Deposit Accounts specially and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
Parent’s or its Subsidiaries’ employees, and (c) an aggregate amount of not more
than $250,000 (calculated at current exchange rates) at any one time, in the
case of Subsidiaries of Parent that are CFCs) Parent and its Subsidiaries shall
not have Permitted Investments consisting of cash, Cash Equivalents, or amounts
credited to Deposit Accounts or Securities Accounts unless Parent or its
Subsidiary, as applicable, and the applicable securities intermediary or bank
have entered into Control Agreements with Agent governing such Permitted
Investments in order to perfect (and further establish) the Agent’s Liens in
such Permitted Investments. Subject to the foregoing proviso, Parent shall not
and shall not permit its Subsidiaries to establish or maintain any Deposit
Account or Securities Account unless Agent shall have received a Control
Agreement in respect of such Deposit Account or Securities Account.

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     6.12 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of Parent or any of its
Subsidiaries except for:
               (a) transactions (other than the payment of management,
consulting, monitoring, or advisory fees) between Parent or its Subsidiaries, on
the one hand, and any Affiliate of Parent or its Subsidiaries, on the other
hand, so long as such transactions (i) are upon fair and reasonable terms,
(ii) are fully disclosed to Agent prior to the consummation thereof, if they
involve one or more payments by Parent or its Subsidiaries in excess of $500,000
for any single transaction or series of related transactions, and (iii) are no
less favorable, taken as a whole, to Parent or its Subsidiaries, as applicable,
than would be obtained in an arm’s length transaction with a non-Affiliate,
               (b) so long as it has been approved by Parent’s Board of
Directors in accordance with applicable law, any indemnity provided for the
benefit of directors of Parent,
               (c) so long as it has been approved by Parent’s Board of
Directors, the payment of reasonable fees, compensation, or employee benefit
arrangements to employees, officers, and outside directors of Parent in the
ordinary course of business and consistent with industry practice,
               (d) the payment of:
                    (i) management, consulting, monitoring, and advisory fees to
Equity Sponsor or its Affiliates, so long as (A) if during the 1 day period
immediately prior to such payment and immediately after giving effect to such
payment, the Revolver Usage is zero, (1) no Default or Event of Default shall
have occurred and be continuing either before or after giving effect to such
payment, (2) Borrowers shall have Excess Availability of at least $20,000,000
both before and after giving effect to such payment and (3) Parent has provided
Agent with written notice containing (w) notice of its intent to make such
payment pursuant to this Section 6.12(d)(i)(A), (x) the amount of such proposed
payment, (y) a certification that each of the conditions contained in clauses
(1) through (3) above will be satisfied both before and after giving effect to
such proposed payment and (z) a confirmation, supported by reasonably detailed
calculations, that on a pro forma basis, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the
12 month period ended one year after the date of such payment and (B) if during
the 1 day period immediately prior to such payment or immediately after giving
effect to such payment, the Revolver Usage is greater than zero, (1) no Default
or Event of Default shall have occurred and be continuing either before or after
giving effect to such payment, (2) Borrowers shall have Excess Availability of
at least $5,000,000 both before and after giving effect to such payment,
(3) Parent has provided Agent with written notice containing (w) notice of its
intent to make such payment pursuant to this Section 6.12(d)(i)(B), (x) the
amount of such proposed payment, (y) a certification that each of the conditions
contained in clauses (1) and (2) above will be satisfied both before and after
giving effect to such proposed payment and (z) confirmation, supported by
reasonably detailed calculations, that on a pro forma basis, Parent and its
Subsidiaries are projected to be in compliance with the financial covenants in
Section 7 for the 12 month period ended one year after the date of such payment,
and (4) the aggregate amount of all such payments made pursuant to this clause
(d)(i)(B) shall not exceed $1,400,000 in any calendar year; and
                    (ii) reasonable and documented out-of-pocket expenses and
the indemnities payable pursuant to the Equity Sponsor in an amount not to
exceed $100,000 in any fiscal year of Parent;
               (e) transactions permitted by Section 6.3 or Section 6.9, or any
Permitted Intercompany Advance, and
               (f) the transactions set forth on Schedule 6.12.
     6.13 Use of Proceeds. Use the proceeds of the Advances for any purpose
other than (a) on the Closing Date, to pay transactional fees, costs, and
expenses incurred in connection with this Agreement, the other Loan Documents,
and the transactions contemplated hereby and thereby, and (b) thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted
purposes.

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     6.14 Holding Company; Inactive Subsidiary.
               (a) Permit Parent to incur any liabilities (other than
liabilities arising under the Loan Documents), own or acquire any assets (other
than the Stock of its Subsidiaries) or engage itself in any operations or
business, except in connection with its ownership of its Subsidiaries and its
rights and obligations under the Loan Documents.
               (b) Permit any Inactive Subsidiary to incur any liabilities, own
or acquire any assets or engage itself in any operations or business.
     6.15 Consignments. Consign any of its or their Inventory or sell any of its
or their Inventory on bill and hold, sale or return, sale on approval, or other
conditional terms of sale.
     6.16 Inventory and Equipment with Bailees. Store the Inventory or Equipment
(other than vehicles and Equipment out for repair, and servers and computers of
the Loan Parties that are located at customer and other offsite locations in the
ordinary course of the Loan Parties’ business operations) of Parent or its
Subsidiaries at any time now or hereafter with a bailee, warehouseman, or
similar party, unless such bailee, warehouseman or similar party has executed
and delivered to Agent a Collateral Access Agreement.
7. FINANCIAL COVENANTS.
               Parent and each Borrower covenants and agrees that, until
termination of all of the Commitments and payment in full of the Obligations,
Parent and each Borrower will comply with each of the following financial
covenants:
               (a) Minimum EBITDA. Achieve EBITDA, measured on a month-end
basis, of at least the required amount set forth in the following table for the
applicable period set forth opposite thereto:

      Applicable Amount   Applicable Period
$17,500,000.00
  For the 6 month period ending June 30, 2009
 
   
$20,416,666.67
  For the 7 month period ending July 31, 2009
 
   
$23,333,333.33
  For the 8 month period ending August 31, 2009
 
   
$26,250,000.00
  For the 9 month period ending September 20, 2009
 
   
$29,166,666.67
  For the 10 month period ending October 31, 2009
 
   
$32,083,333.33
  For the 11 month period ending November 30, 2009
 
   
$35,000,000.00
  For the 12 month period ending December 31, 2009
 
   
$35,000,000.00
  For the 12 month period ending on the last day of each month thereafter

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               (b) Fixed Charge Coverage Ratio. Have a Fixed Charge Coverage
Ratio, measured on a month-end basis, of at least the required amount set forth
in the following table for the applicable period set forth opposite thereto:

      Applicable Ratio   Applicable Period
1.0:1.0
  For the 6 month period ending June 30, 2009
 
   
1.0:1.0
  For the 7 month period ending July 31, 2009
 
   
1.0:1.0
  For the 8 month period ending August 31, 2009
 
   
1.0:1.0
  For the 9 month period ending September 20, 2009
 
   
1.0:1.0
  For the 10 month period ending October 31, 2009
 
   
1.0:1.0
  For the 11 month period ending November 30, 2009
 
   
1.0:1.0
  For the 12 month period ending December 31, 2009
 
   
1.0:1.0
  For the 12 month period ending January 31, 2010
 
   
1.0:1.0
  For the 12 month period ending February 28, 2010
 
   
1.0:1.0
  For the 12 month period ending March 31, 2010
 
   
1.0:1.0
  For the 12 month period ending April 30, 2010
 
   
1.0:1.0
  For the 12 month period ending May 31, 2010
 
   
1.25:1.0
  For the 12 month period ending on the last day of each month thereafter

8. EVENTS OF DEFAULT.
               Any one or more of the following events shall constitute an event
of default (each, an “Event of Default”) under this Agreement:
     8.1 If any Loan Party fails to pay when due and payable, or when declared
due and payable, (a) all or any portion of the Obligations consisting of
interest, fees, or charges due the Lender Group, reimbursement of Lender Group
Expenses, or other amounts (other than any portion thereof constituting
principal) constituting Obligations (including any portion thereof that accrues
after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency
Proceeding), and such failure continues for a period of 3 Business Days, or
(b) all or any portion of the principal of the Obligations;
     8.2 If any Loan Party or any of its Subsidiaries:
               (a) fails to perform or observe any covenant or other agreement
contained in any of (i) Sections 3.3, 5.1 (except as otherwise provided in
Section 8.2(b)), 5.2, 5.3 (solely if any Loan Party or any of its Subsidiaries
is not in good standing in its jurisdiction of organization), 5.6, 5.7 (solely
if any Loan Party or any of its Subsidiaries refuses to allow Agent or its
representatives or agents to visit such Loan Party’s or

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such Subsidiary’s properties, inspect its assets or books or records, examine
and make copies of its books and records, or discuss such Loan Party’s or such
Subsidiary’s affairs, finances, and accounts with officers and employees of such
Loan Party or such Subsidiary), 5.10, 5.11, 5.14, 5.16 or 5.17 of this
Agreement, (ii) Sections 6.1 through 6.16 of this Agreement, (iii) Section 7 of
this Agreement, or (iv) Section 6 of the Security Agreement;
               (b) fails to perform or observe any covenant or other agreement
contained in any of Sections 5.1 (it being understand and agreed that the grace
period set forth in this clause (b) with respect to Section 5.1 shall be
applicable only twice during any 12-month period), 5.3 (other than if any Loan
Party or any of its Subsidiaries is not in good standing in its jurisdiction of
organization), 5.4, 5.5, 5.8, 5.12, 5.13 and 5.15 of this Agreement and such
failure continues for a period of 10 days after the earlier of (i) the date on
which such failure shall first become known to any officer of any Loan Party or
any of its Subsidiaries or (ii) the date on which written notice thereof is
given to Administrative Borrower by Agent; or
               (c) fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents, in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 8 (in which event such other provision of this
Section 8 shall govern), and such failure continues for a period of 30 days
after the earlier of (i) the date on which such failure shall first become known
to any officer of any Loan Party or any of its Subsidiaries or (ii) the date on
which written notice thereof is given to Administrative Borrower by Agent;
          8.3 If one or more judgments, orders, or awards for the payment of
money involving an aggregate amount of $1,000,000, or more (except to the extent
fully covered by insurance pursuant to which the insurer has accepted liability
therefor in writing) is entered or filed against a Loan Party or any of its
Subsidiaries, or with respect to any of their respective assets, and remains
unsatisfied and either (a) there is a period of 30 consecutive days at any time
after the entry of any such judgment, order, or award during which a stay of
enforcement thereof is not in effect, or (b) enforcement proceedings are
commenced upon such judgment, order, or award;
          8.4 If an Insolvency Proceeding is commenced by a Loan Party or any of
its Subsidiaries;
          8.5 If an Insolvency Proceeding is commenced against a Loan Party or
any of its Subsidiaries and any of the following events occur: (a) such Loan
Party or such Subsidiary consents to the institution of such Insolvency
Proceeding against it, (b) the petition commencing the Insolvency Proceeding is
not timely controverted, (c) the petition commencing the Insolvency Proceeding
is not dismissed within 60 calendar days of the date of the filing thereof,
(d) an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, such Loan Party or its Subsidiary, or (e) an order
for relief shall have been issued or entered therein;
          8.6 If a Loan Party or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
          8.7 If there is a default in one or more agreements to which a Loan
Party or any of its Subsidiaries is a party with one or more third Persons
relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an
aggregate amount of $1,000,000 or more, and such default (i) occurs at the final
maturity of the obligations thereunder, or (ii) results in a right by such third
Person, irrespective of whether exercised, to accelerate the maturity of such
Loan Party’s or its Subsidiary’s obligations thereunder;
          8.8 If any warranty, representation, statement, or Record made herein
or in any other Loan Document or delivered in writing to Agent or any Lender in
connection with this Agreement or any other Loan Document proves to be untrue in
any material respect (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) as of the date of issuance or
making or deemed making thereof;

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          8.9 If the obligation of any Guarantor under the Guaranty is limited
or terminated by operation of law or by such Guarantor;
          8.10 If the Security Agreement or any other Loan Document that
purports to create a Lien, shall, for any reason, fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien on the Collateral covered thereby, except as a
result of a disposition of the applicable Collateral in a transaction permitted
under this Agreement;
          8.11 Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by a Loan Party or its Subsidiaries, or a proceeding
shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental
Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to
establish the invalidity or unenforceability thereof, or a Loan Party or its
Subsidiaries shall deny that such Loan Party or its Subsidiaries has any
liability or obligation purported to be created under any Loan Document; or
          8.12 If there is any actual termination, cancellation, limitation of,
or modification to or change in, the business relationship between any Loan
Party, on the one hand, and any customer or supplier or any group thereof, on
the other hand, where such termination, cancellation, limitation of, or
modification to or change in, such business relationship could reasonably be
expected to result in a Material Adverse Change.
          8.13 If (a) Parent designates any Subsidiary as a Specified
Subsidiary, or any Specified Subsidiary as a Subsidiary, in each case, other
than in accordance with Section 1.5, or (b) any Specified Subsidiary shall fail
to satisfy any of the criteria set forth in clauses (i) through (vii) of
Section 1.5(b).
9. RIGHTS AND REMEDIES.
          9.1 Rights and Remedies. Upon the occurrence and during the
continuation of an Event of Default, Agent may, and, at the instruction of the
Required Lenders, shall, in each case by written notice to Administrative
Borrower and in addition to any other rights or remedies provided for hereunder
or under any other Loan Document or by applicable law, do any one or more of the
following on behalf of the Lender Group:
               (a) declare the Obligations, whether evidenced by this Agreement,
by any of the other Loan Documents, or otherwise, immediately due and payable,
whereupon the same shall become and be 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 Parent and Borrowers; and
               (b) declare the Revolver Commitments terminated, whereupon the
Revolver Commitments shall immediately be terminated together with any
obligation of any Lender hereunder to make Advances and the obligation of the
Issuing Lender to issue Letters of Credit.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8.4 or Section 8.5, in addition to the remedies
set forth above, without any notice to any Loan Party or any other Person or any
act by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Parent and Borrowers.
          9.2 Remedies Cumulative. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.

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10. WAIVERS; INDEMNIFICATION.
          10.1 Demand; Protest; etc. Parent and each of its Subsidiaries waives
demand, protest, notice of protest, notice of default or dishonor, notice of
payment and nonpayment, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of documents, instruments, chattel paper, and guarantees
at any time held by the Lender Group on which any Loan Party may in any way be
liable.
          10.2 The Lender Group’s Liability for Collateral. Parent and each
Borrower hereby agrees that: (a) so long as Agent complies with its obligations,
if any, under the Code or other applicable law, the Lender Group shall not in
any way or manner be liable or responsible for: (i) the safekeeping of the
Collateral, (ii) any loss or damage thereto occurring or arising in any manner
or fashion from any cause, (iii) any diminution in the value thereof, or
(iv) any act or default of any carrier, warehouseman, bailee, forwarding agency,
or other Person, and (b) all risk of loss, damage, or destruction of the
Collateral shall be borne by Borrowers.
          10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an “Indemnified Person”) harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties, and damages,
and all reasonable fees and disbursements of attorneys, experts, or consultants
and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution and delivery (provided that Borrowers
shall not be liable for costs and expenses (including attorneys fees) of any
Lender (other than WFF) incurred in advising, structuring, drafting, reviewing,
administering or syndicating the Loan Documents), enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby (other than disputes solely between the Lenders)
or the monitoring of Parent’s and its Subsidiaries’ compliance with the terms of
the Loan Documents (provided that Borrowers shall not be liable for costs and
expenses (including attorneys fees) of any Lender (other than WFF) incurred in
connection with such monitoring), (b) with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan Document, or
the use of the proceeds of the credit provided hereunder (irrespective of
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (other than disputes solely
between the Lenders), and (c) in connection with or arising out of any presence
or release of Hazardous Materials at, on, under, to or from any assets or
properties owned, leased or operated by Parent or any of its Subsidiaries or any
Environmental Actions, Environmental Liabilities and Costs or Remedial Actions
related in any way to any such assets or properties of Parent or any of its
Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The
foregoing to the contrary notwithstanding, Borrowers shall have no obligation to
any Indemnified Person under this Section 10.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person or its officers, directors, employees, attorneys, or agents. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
11. NOTICES.
               Unless otherwise provided in this Agreement, all notices or
demands relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other

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informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as a party may designate in accordance herewith), or
telefacsimile. In the case of notices or demands to Administrative Borrower or
Agent, as the case may be, they shall be sent to the respective address set
forth below:

     
If to Administrative Borrower:
  MEDQUIST TRANSCRIPTIONS, LTD.
 
   
 
  1000 Bishops Gate Blvd.
Mt. Laurel, New Jersey 08054-4632
Attn: Mark Sullivan
Fax No. (856) 206-4211
 
   
with copies to:
  Robinson & Cole LLP
280 Trumbull Street
Hartford, Connecticut 06103
Attn: Cathryn A. Reynolds, Esq.
Fax No.: (860) 275-8299
 
   
If to Agent:
  WELLS FARGO FOOTHILL, LLC
One Boston Place, Suite 1800
Boston, Massachusetts 02108
Attn: Business Finance Manager
Fax No.: (617) 722-9485
 
   
with copies to:
  SCHULTE ROTH & ZABEL LLP
919 Third Avenue
New York, New York 10022
Attention: Michael M. Mezzacappa
Fax No.: (212) 593-5955

               Any party hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 11,
shall be deemed received on the earlier of the date of actual receipt or 3
Business Days after the deposit thereof in the mail; provided, that (a) notices
sent by overnight courier service shall be deemed to have been given when
received, (b) notices by facsimile shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient, shall
be deemed to have been given at the opening on business on the next Business Day
for the recipient) and (c) notices by electronic mail shall be deemed received
upon the sender’s receipt of an acknowledgment from the intended recipient (such
as by the “return receipt requested” function, as available, return email or
other written acknowledgment).
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
               (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

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               (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER
GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).
               (c) PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. PARENT AND
EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A
COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
          13.1 Assignments and Participations.
               (a) With the prior written consent of Agent, which consent of
Agent shall not be unreasonably withheld, delayed or conditioned, and shall not
be required in connection with an assignment to a Person that is a Lender or an
Affiliate (other than individuals) of a Lender, any Lender may assign and
delegate to one or more Eligible Transferees (each an “Assignee”; provided that
no Loan Party, Affiliate of a Loan Party, Equity Sponsor, or Affiliate of Equity
Sponsor shall be permitted to become an Assignee) all or any portion of the
Obligations, the Commitments and the other rights and obligations of such Lender
hereunder and under the other Loan Documents, in a minimum amount (unless waived
by Agent) of $5,000,000 (except such minimum amount shall not apply to (x) an
assignment or delegation by any Lender to any other Lender or an Affiliate of
any Lender or (y) a group of new Lenders, each of which is an Affiliate of each
other or a Related Fund of such new Lender to the extent that the aggregate
amount to be assigned to all such new Lenders is at least $5,000,000); provided,
however, that Borrowers and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until
(i) written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Administrative Borrower and Agent by such Lender and the Assignee, (ii) such
Lender and its Assignee have delivered to Administrative Borrower and Agent an
Assignment and Acceptance and Agent has notified the assigning Lender of its
receipt thereof in accordance with Section 13.1(b), and (iii) unless waived by
Agent, the assigning Lender or Assignee has paid to Agent for Agent’s separate
account a processing fee in the amount of $3,500.
               (b) From and after the date that Agent notifies the assigning
Lender (with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and, if applicable, payment of the required processing
fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assigning Lender shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (except with respect to

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Section 10.3 hereof) and be released from any future obligations under this
Agreement (and in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement and the other Loan Documents, such Lender shall cease to be a party
hereto and thereto), and such assignment shall effect a novation among
Borrowers, the assigning Lender, and the Assignee; provided, however, that
nothing contained herein shall release any assigning Lender from obligations
that survive the termination of this Agreement, including such assigning
Lender’s obligations under Section 15 and Section 17.9(a) of this Agreement.
               (c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (v) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent, by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto, and (vi) such Assignee
agrees that it will perform all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
               (d) Immediately upon Agent’s receipt of the required processing
fee, if applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.
               (e) Any Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons (a “Participant”) participating
interests in all or any portion of its Obligations, its Commitment, and the
other rights and interests of that Lender (the “Originating Lender”) hereunder
and under the other Loan Documents; provided, however, that (i) the Originating
Lender shall remain a “Lender” for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, or (E) change
the amount or due dates of scheduled principal repayments or prepayments or
premiums, and (v) all amounts payable by Borrowers hereunder shall be determined
as if such

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Lender had not sold such participation, except that, if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement. The rights of any Participant only shall be
derivative through the Originating Lender with whom such Participant
participates and no Participant shall have any rights under this Agreement or
the other Loan Documents or any direct rights as to the other Lenders, Agent,
Borrowers, the Collections of Parent or its Subsidiaries, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the right to
participate directly in the making of decisions by the Lenders among themselves.
               (f) In connection with any such assignment or participation or
proposed assignment or participation or any grant of a security interest in, or
pledge of, its rights under and interest in this Agreement, a Lender may,
subject to the provisions of Section 17.9, disclose all documents and
information which it now or hereafter may have relating to Parent and its
Subsidiaries and their respective businesses.
               (g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
               (h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall
maintain, or cause to be maintained, a register (the “Register”) on which it
enters the name and address of each Lender as the registered owner of the
Obligations (and the principal amount thereof and stated interest thereon) held
by such Lender (each, a “Registered Loan”). Other than in connection with an
assignment by a Lender of all or any portion of its portion of the Advances or
Commitments to an Affiliate of such Lender or a Related Fund of such Lender
(i) a Registered Loan (and the registered note, if any, evidencing the same) may
be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register (and each registered note shall expressly so provide)
and (ii) any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any evidencing the same), Borrowers shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary. In the case of any assignment by a Lender of all or any
portion of the Advances or Commitments to an Affiliate of such Lender or a
Related Fund of such Lender, and which assignment is not recorded in the
Register, the assigning Lender, on behalf of Borrowers, shall maintain a
register comparable to the Register.
               (i) In the event that a Lender sells participations in the
Registered Loan, such Lender, as a non-fiduciary agent on behalf of Borrowers,
shall maintain a register on which it enters the name of all participants in the
Registered Loans held by it (the “Participant Register”). A Registered Loan (and
the Registered Note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant
Register (and each registered note shall expressly so provide). Any
participation of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
               (j) Agent shall make a copy of the Register (and each Lender
shall make a copy of its Participant Register in the extent it has one)
available for review by Administrative Borrower from time to time as
Administrative Borrower may reasonably request.

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          13.2 Successors. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that neither Parent nor any Borrower may assign this Agreement or any rights or
duties hereunder without the Lenders’ prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release Parent or any Borrower from its Obligations. A Lender may
assign this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 13.1 hereof and, except as
expressly required pursuant to Section 13.1 hereof, no consent or approval by
Parent or any Borrower is required in connection with any such assignment.
14. AMENDMENTS; WAIVERS.
          14.1 Amendments and Waivers.
               (a) No amendment, waiver or other modification of any provision
of this Agreement or any other Loan Document (other than Bank Product Agreements
or the Fee Letter), and no consent with respect to any departure by Parent or
any Borrower therefrom, shall be effective unless the same shall be in writing
and signed by the Required Lenders (or by Agent at the written request of the
Required Lenders), Parent and Administrative Borrower (on behalf of all
Borrowers) and then any such waiver or consent shall be effective, but only in
the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders directly affected thereby and Parent and
Administrative Borrower (on behalf of all Borrowers), do any of the following:
                    (i) increase the amount of or extend the expiration date of
any Commitment of any Lender,
                    (ii) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
                    (iii) reduce the principal of, or the rate of interest on,
any loan or other extension of credit hereunder, or reduce any fees or other
amounts payable hereunder or under any other Loan Document (except (y) in
connection with the waiver of applicability of Section 2.6(c) (which waiver
shall be effective with the written consent of the Required Lenders), and
(z) that any amendment or modification of defined terms used in the financial
covenants in this Agreement shall not constitute a reduction in the rate of
interest or a reduction of fees for purposes of this clause (iii)),
                    (iv) amend or modify this Section or any provision of this
Agreement providing for consent or other action by all Lenders,
                    (v) other than as permitted by Section 15.11, release
Agent’s Lien in and to any of the Collateral,
                    (vi) change the definition of “Required Lenders” or “Pro
Rata Share”,
                    (vii) contractually subordinate any of the Agent’s Liens,
                    (viii) other than in connection with a merger, liquidation,
dissolution or sale of such Person expressly permitted by the terms hereof or
the other Loan Documents, release any Borrower or any Guarantor from any
obligation for the payment of money or consent to the assignment or transfer by
any Borrower or any Guarantor of any of its rights or duties under this
Agreement or the other Loan Documents,
                    (ix) amend any of the provisions of Section 2.4(b)(i) or
Section 2.4(e) or (f),
                    (x) amend Section 13.1(a) to permit a Loan Party, an
Affiliate of a Loan Party, Equity Sponsor, or an Affiliate of Equity Sponsor to
be permitted to become an Assignee, or

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                    (xi) change the definition of Borrowing Base or any of the
defined terms (including the definition of Availability Block and Eligible
Accounts) that are used in such definition to the extent that any such change
results in more credit being made available to Borrowers based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount,
or change Section 2.2.
               (b) No amendment, waiver, modification, or consent shall amend,
modify, or waive (i) the definition of, or any of the terms or provisions of,
the Fee Letter, without the written consent of Agent and Administrative Borrower
(and shall not require the written consent of any of the Lenders), and (ii) any
provision of Section 15 pertaining to Agent, or any other rights or duties of
Agent under this Agreement or the other Loan Documents, without the written
consent of Agent, Administrative Borrower, and the Required Lenders.
               (c) No amendment, waiver, modification, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Issuing Lender, or any other rights or duties of Issuing Lender
under this Agreement or the other Loan Documents, without the written consent of
Issuing Lender, Agent, Administrative Borrower, and the Required Lenders.
               (d) No amendment, waiver, modification, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to Swing Lender, or any other rights or duties of Swing Lender under
this Agreement or the other Loan Documents, without the written consent of Swing
Lender, Agent, Administrative Borrower, and the Required Lenders.
               (e) Anything in this Section 14.1 to the contrary
notwithstanding, any amendment, modification, waiver, consent, termination, or
release of, or with respect to, any provision of this Agreement or any other
Loan Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of Parent or any
Borrower, shall not require consent by or the agreement of Parent or any
Borrower.
          14.2 Replacement of Holdout Lender.
               (a) If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders and if such action has received the consent, authorization, or agreement
of the Required Lenders but not all of the Lenders, then Agent, upon at least 5
Business Days prior irrevocable notice, may permanently replace any Lender (a
“Holdout Lender”) that failed to give its consent, authorization, or agreement
with one or more Replacement Lenders, and the Holdout Lender shall have no right
to refuse to be replaced hereunder. Such notice to replace the Holdout Lender
shall specify an effective date for such replacement, which date shall not be
later than 15 Business Days after the date such notice is given.
               (b) Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations (including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. The replacement of any Holdout Lender shall be
made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender’s Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
          14.3 No Waivers; Cumulative Remedies. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be

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effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent’s and each Lender’s rights thereafter to require strict
performance by Parent and each Borrower of any provision of this Agreement.
Agent’s and each Lender’s rights under this Agreement and the other Loan
Documents will be cumulative and not exclusive of any other right or remedy that
Agent or any Lender may have.
15. AGENT; THE LENDER GROUP.
          15.1 Appointment and Authorization of Agent. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to
execute and deliver each of the other Loan Documents on its behalf and to take
such other action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 15.
The provisions of this Section 15 are solely for the benefit of Agent and the
Lenders, and Parent and its Subsidiaries shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document
notwithstanding, Agent shall not have any duties or responsibilities, except
those expressly set forth herein and in the other Loan Documents, nor shall
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 Agent; it being expressly understood and agreed that the
use of the word “Agent” is for convenience only, that WFF is merely the
representative of the Lenders, and only has the contractual duties set forth
herein and in the other Loan Documents. Except as expressly otherwise provided
in this Agreement, Agent shall have and may use its sole discretion with respect
to exercising or refraining from exercising any discretionary rights or taking
or refraining from taking any actions that Agent expressly is entitled to take
or assert under or pursuant to this Agreement and the other Loan Documents.
Without limiting the generality of the foregoing, or of any other provision of
the Loan Documents that provides rights or powers to Agent, Lenders agree that
Agent shall have the right to exercise the following powers as long as this
Agreement remains in effect: (a) maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the
Obligations, the Collateral, the Collections of Parent and its Subsidiaries, and
related matters, (b) execute or file any and all financing or similar statements
or notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Advances, for itself or on behalf of Lenders, as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Parent and its Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of Parent
and its Subsidiaries, (f) perform, exercise, and enforce any and all other
rights and remedies of the Lender Group with respect to Parent or its
Subsidiaries, the Obligations, the Collateral, the Collections of Parent and its
Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
          15.2 Delegation of Duties. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
          15.3 Liability of Agent. None of the Agent-Related Persons shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by Parent or any of its
Subsidiaries or Affiliates, or any officer or director

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thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
Parent or its Subsidiaries or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Agent-Related Person shall be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the books and records or
properties of Parent or its Subsidiaries.
          15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to any Loan Party or counsel to
any Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
          15.5 Notice of Default or Event of Default. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders
and, except with respect to Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a “notice of default.” Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 8; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
          15.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Parent
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty

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or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any Borrower or any other Person party to a
Loan Document that may come into the possession of any of the Agent-Related
Persons.
          15.7 Costs and Expenses; Indemnification. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not any Borrower is obligated to
reimburse Agent or Lenders for such expenses pursuant to this Agreement or
otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Parent and its Subsidiaries received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not reimbursed for
such costs and expenses by Parent or its Subsidiaries, each Lender hereby agrees
that it is and shall be obligated to pay to Agent such Lender’s Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of Borrowers and without limiting the obligation
of Borrowers to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any
Defaulting Lender in failing to make an Advance or other extension of credit
hereunder. Without limitation of the foregoing, each Lender shall reimburse
Agent upon demand for such Lender’s Pro Rata Share of any costs or out of pocket
expenses (including attorneys, accountants, advisors, and consultants fees and
expenses) incurred by Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
          15.8 Agent in Individual Capacity. WFF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Parent and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though WFF were not Agent hereunder, and, in each case, without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Parent or its Affiliates or any
other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Parent or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms “Lender” and “Lenders” include WFF in its individual capacity.
          15.9 Successor Agent. Agent may resign as Agent upon 30 days’ prior
written notice to the Lenders (unless such notice is waived by the Required
Lenders) and Administrative Borrower (unless such notice is waived by
Administrative Borrower). If Agent resigns under this Agreement, the Required
Lenders shall be entitled, with (so long as no Event of Default has occurred and
is continuing) the consent of Administrative Borrower (such consent not to be
unreasonably withheld, delayed, or conditioned), appoint a successor Agent for
the Lenders. If, at the time that Agent’s resignation is effective, it is acting
as the Issuing Lender or the Swing Lender, such resignation shall also operate
to effectuate its resignation as the Issuing Lender or the Swing Lender, as
applicable, and it shall automatically be relieved of any further obligation to
issue Letters of Credit or make Swing Loans. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders and

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Administrative Borrower, a successor Agent. If Agent has materially breached or
failed to perform any material provision of this Agreement or of applicable law,
the Required Lenders may agree in writing to remove and replace Agent with a
successor Agent from among the Lenders. In any such event, upon the acceptance
of its appointment as successor Agent hereunder, such successor Agent shall
succeed to all the rights, powers, and duties of the retiring Agent and the term
“Agent” shall mean such successor Agent and the retiring Agent’s appointment,
powers, and duties as Agent shall be terminated. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Section 15 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of Agent
hereunder until such time, if any, as the Lenders appoint a successor Agent as
provided for above.
     15.10 Lender in Individual Capacity. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Parent
and its Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though such Lender were not a Lender hereunder without notice to or
consent of the other members of the Lender Group. The other members of the
Lender Group acknowledge that, pursuant to such activities, such Lender and its
respective Affiliates may receive information regarding Parent or its Affiliates
or any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Parent or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.
          15.11 Collateral Matters.
               (a) The Lenders hereby irrevocably authorize Agent, at its option
and in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrowers
of all Obligations, (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under
Section 6.4 of this Agreement or the other Loan Documents (and Agent may rely
conclusively on any such certificate, without further inquiry),
(iii) constituting property in which Parent or its Subsidiaries owned no
interest at the time the Agent’s Lien was granted nor at any time thereafter, or
(iv) constituting property leased to Parent or its Subsidiaries under a lease
that has expired or is terminated in a transaction permitted under this
Agreement. Except as provided above, Agent will not execute and deliver a
release of any Lien on any Collateral without the prior written authorization of
(y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent’s
authority to release any such Liens on particular types or items of Collateral
pursuant to this Section 15.11; provided, however, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
               (b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Parent or its
Subsidiaries or is cared for, protected, or insured or has been encumbered, or
that the Agent’s Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and

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conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent’s own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.
          15.12 Restrictions on Actions by Lenders; Sharing of Payments.
               (a) Each of the Lenders agrees that it shall not, without the
express written consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the written request of Agent, set off against
the Obligations, any amounts owing by such Lender to Parent or its Subsidiaries
or any deposit accounts of Parent or its Subsidiaries now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it shall
not, unless specifically requested to do so in writing by Agent, take or cause
to be taken any action, including, the commencement of any legal or equitable
proceedings to enforce any Loan Document against any Borrower or any Guarantor
or to foreclose any Lien on, or otherwise enforce any security interest in, any
of the Collateral.
               (b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share
of all such distributions by Agent, such Lender promptly shall (A) turn the same
over to Agent, in kind, and with such endorsements as may be required to
negotiate the same to Agent, or in immediately available funds, as applicable,
for the account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (B) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that to the extent that such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
          15.13 Agency for Perfection. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent’s Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected by possession or control.
Should any Lender obtain possession or control of any such Collateral, such
Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor
shall deliver possession or control of such Collateral to Agent or in accordance
with Agent’s instructions.
          15.14 Payments by Agent to the Lenders. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.
          15.15 Concerning the Collateral and Related Loan Documents. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents. Each member of the Lender Group agrees
that any action taken by Agent in accordance with the terms of this Agreement or
the other Loan Documents relating to the Collateral and the exercise by Agent of
its powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
          15.16 Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information. By becoming a party to this Agreement,
each Lender:
               (a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report respecting Parent or its Subsidiaries (each

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a “Report” and collectively, “Reports”) prepared by or at the request of Agent,
and Agent shall so furnish each Lender with such Reports,
               (b) expressly agrees and acknowledges that Agent does not
(i) make any representation or warranty as to the accuracy of any Report, and
(ii) shall not be liable for any information contained in any Report,
               (c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Parent and
its Subsidiaries and will rely significantly upon Parent’s and its Subsidiaries’
books and records, as well as on representations of Parent’s and its
Subsidiaries’ personnel,
               (d) agrees to keep all Reports and other material, non-public
information regarding Parent and its Subsidiaries and their operations, assets,
and existing and contemplated business plans in a confidential manner in
accordance with Section 17.9, and
               (e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or fail to take or any conclusion the indemnifying Lender may reach or draw
from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
Agent, and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including, attorneys fees and costs) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Parent or its Subsidiaries to Agent that has not been
contemporaneously provided by Parent or such Subsidiary to such Lender, and,
upon receipt of such request, Agent promptly shall provide a copy of same to
such Lender, (y) to the extent that Agent is entitled, under any provision of
the Loan Documents, to request additional reports or information from Parent or
its Subsidiaries, any Lender may, from time to time, reasonably request Agent to
exercise such right as specified in such Lender’s notice to Agent, whereupon
Agent promptly shall request of Borrowers the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from Parent or
such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and
(z) any time that Agent renders to Administrative Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.
          15.17 Several Obligations; No Liability. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 15.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.

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16. WITHHOLDING TAXES.
               (a) All payments made by any Borrower hereunder or under any note
or other Loan Document will be made without setoff, counterclaim, or other
defense. In addition, all such payments will be made free and clear of, and
without deduction or withholding for, any present or future Taxes, and in the
event any deduction or withholding of Taxes is required, each Borrower shall
comply with the next sentence of this Section 16(a). If any Taxes are so levied
or imposed, each Borrower agrees to pay the full amount of such Taxes and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or Loan Document, including any amount paid
pursuant to this Section 16(a) after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein; provided,
however, that Borrowers shall not be required to increase any such amounts if
the increase in such amount payable results from Agent’s or such Lender’s own
willful misconduct or gross negligence (as finally determined by a court of
competent jurisdiction). Each Borrower will furnish to Agent as promptly as
possible after the date the payment of any Tax is due pursuant to applicable
law, certified copies of tax receipts evidencing such payment by Borrowers.
               (b) Each Borrower agrees to pay any present or future stamp,
value added or documentary taxes or any other excise or property taxes, charges,
or similar levies that arise from any payment made hereunder or from the
execution, delivery, performance, recordation, or filing of, or otherwise with
respect to this Agreement or any other Loan Document.
               (c) If a Lender or Participant is entitled to claim an exemption
or reduction from United States withholding tax, such Lender or Participant
agrees with and in favor of Agent, to deliver to Agent (or, in the case of a
Participant, to the Lender granting the participation only) one of the following
before receiving its first payment under this Agreement:
                    (i) if such Lender or Participant is entitled to claim an
exemption from United States withholding tax pursuant to its portfolio interest
exception, (A) a statement of the Lender or Participant, signed under penalty of
perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of
the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section
871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to
any Borrower within the meaning of Section 864(d)(4) of the IRC, and (B) a
properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper
attachments);
                    (ii) if such Lender or Participant is entitled to claim an
exemption from, or a reduction of, withholding tax under a United States tax
treaty, a properly completed and executed copy of IRS Form W-8BEN;
                    (iii) if such Lender or Participant is entitled to claim
that interest paid under this Agreement is exempt from United States withholding
tax because it is effectively connected with a United States trade or business
of such Lender, a properly completed and executed copy of IRS Form W-8ECI;
                    (iv) if such Lender or Participant is entitled to claim that
interest paid under this Agreement is exempt from United States withholding tax
because such Lender or Participant serves as an intermediary, a properly
completed and executed copy of IRS Form W-8IMY (with proper attachments); or
                    (v) a properly completed and executed copy of any other form
or forms, including IRS Form W-9, as may be required under the IRC or other laws
of the United States as a condition to exemption from, or reduction of, United
States withholding or backup withholding tax.
Each Lender or Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

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               (d) If a Lender or Participant claims an exemption from
withholding tax in a jurisdiction other than the United States, such Lender or
such Participant agrees with and in favor of Agent, to deliver to Agent (or, in
the case of a Participant, to the Lender granting the participation only) any
such form or forms, as may be required under the laws of such jurisdiction as a
condition to exemption from, or reduction of, foreign withholding or backup
withholding tax before receiving its first payment under this Agreement, but
only if such Lender or such Participant is legally able to deliver such forms,
provided, however, that nothing in this Section 16(d) shall require a Lender or
Participant to disclose any information that it deems to be confidential
(including without limitation, its tax returns). Each Lender and each
Participant shall provide new forms (or successor forms) upon the expiration or
obsolescence of any previously delivered forms and to promptly notify Agent (or,
in the case of a Participant, to the Lender granting the participation only) of
any change in circumstances which would modify or render invalid any claimed
exemption or reduction.
               (e) If a Lender or Participant claims exemption from, or
reduction of, withholding tax and such Lender or Participant sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of Borrowers to such Lender or Participant, such Lender or Participant agrees to
notify Agent (or, in the case of a sale of a participation interest, to the
Lender granting the participation only) of the percentage amount in which it is
no longer the beneficial owner of Obligations of Borrowers to such Lender or
Participant. To the extent of such percentage amount, Agent will treat such
Lender’s or such Participant’s documentation provided pursuant to Section 16(c)
or 16(d) as no longer valid. With respect to such percentage amount, such
Participant or Assignee may provide new documentation, pursuant to Section 16(c)
or 16(d), if applicable. Borrowers agree that each Participant shall be entitled
to the benefits of this Section 16 with respect to its participation in any
portion of the Commitments and the Obligations so long as such Participant
complies with the obligations set forth in this Section 16 with respect thereto.
               (f) If a Lender or a Participant is entitled to a reduction in
the applicable withholding tax, Agent (or, in the case of a Participant, to the
Lender granting the participation) may withhold from any interest payment to
such Lender or such Participant an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other
documentation required by subsection (c) or (d) of this Section 16 are not
delivered to Agent (or, in the case of a Participant, to the Lender granting the
participation), then Agent (or, in the case of a Participant, to the Lender
granting the participation) may withhold from any interest payment to such
Lender or such Participant not providing such forms or other documentation an
amount equivalent to the applicable withholding tax.
               (g) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent (or, in the case of a
Participant, to the Lender granting the participation) did not properly withhold
tax from amounts paid to or for the account of any Lender or any Participant due
to a failure on the part of the Lender or any Participant (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent (or such Participant failed to notify the Lender
granting the participation) of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless (or, in the case of
a Participant, such Participant shall indemnify and hold the Lender granting the
participation harmless) for all amounts paid, directly or indirectly, by Agent
(or, in the case of a Participant, to the Lender granting the participation), as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Agent (or, in the case of
a Participant, to the Lender granting the participation only) under this
Section 16, together with all costs and expenses (including attorneys fees and
expenses). The obligation of the Lenders and the Participants under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.
               (h) If Agent or a Lender determines, in its sole discretion, that
it has received a refund of any Taxes as to which it has been indemnified by a
Borrower or with respect to which a Borrower has paid additional amounts
pursuant to this Section 16, so long as no Default or Event of Default has
occurred and is continuing, it shall pay over such refund to such Borrower (but
only to the extent of payments made, or additional amounts paid, by such
Borrower under this Section 16 with respect to Taxes giving rise to such a
refund), net of all out-of-pocket expenses of Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such a refund); provided, that such Borrower,

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upon the request of Agent or such Lender, agrees to repay the amount paid over
to such Borrower (plus any penalties, interest or other charges, imposed by the
relevant Governmental Authority, other than such penalties, interest or other
charges imposed as a result of the willful misconduct or gross negligence of
Agent hereunder) to Agent or such Lender in the event Agent or such Lender is
required to repay such refund to such Governmental Authority. Notwithstanding
anything in this Credit Agreement to the contrary, this Section 16 shall not be
construed to require Agent or any Lender to make available its tax returns (or
any other information which it deems confidential) to any Borrower or any other
Person.
               (i) Each Borrower shall indemnify and hold harmless each Lender
(including for purposes of this section any Participant) and Agent (and, in the
case of any Lender or Agent that is a partnership or other “flow-through” entity
for tax purposes, each beneficial owner thereof (each, a “Beneficial Owner”))
for the full amount of Taxes that arise from any payment made hereunder or under
any of the Loan Documents and Other Taxes imposed on or paid by such Person and
any liability (including penalties, interest and expenses) arising from or with
respect to such taxes, whether or not they were correctly or legally asserted.
In addition, each Borrower shall indemnify Lenders and Agent (and their
Beneficial Owners) for any taxes based on or measured by the overall net income
of Lenders or Agent (or their Beneficial Owners) (“Net Income Taxes”) imposed by
any jurisdiction on or with respect to any increased amount payable by any
Borrower under this Section 16. Payment under this indemnification shall be made
within 30 days from the date Agent or the relevant Lender makes written demand
for it. A certificate containing reasonable detail as to the amount of such
Taxes, Other Taxes or Net Income Taxes submitted to Administrative Borrower by
Agent or the relevant Lender shall be conclusive evidence, absent manifest
error, of the amount due from Borrowers to Agent or such Lender (or their
Beneficial Owners).
               (j) The provisions of this Section 16 shall survive the
termination of this Agreement and the repayment of all Obligations.
17. GENERAL PROVISIONS.
          17.1 Effectiveness. This Agreement shall be binding and deemed
effective when executed by Parent, each Borrower, Agent, and each Lender whose
signature is provided for on the signature pages hereof.
          17.2 Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
          17.3 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Parent or any
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
          17.4 Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
          17.5 Bank Product Providers. Each Bank Product Provider shall be
deemed a third party beneficiary hereof and of the provisions of the other Loan
Documents for purposes of any reference in a Loan Document to the parties for
whom Agent is acting; it being understood and agreed that the rights and
benefits of such Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider’s right to share in payments and
collections out of the Collateral as more fully set forth herein. In connection
with any such distribution of payments and collections, Agent shall be entitled
to assume no amounts are due to any Bank Product Provider unless such Bank
Product Provider has notified Agent in writing of the amount of any such
liability owed to it prior to such distribution.

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          17.6 Debtor-Creditor Relationship. The relationship between the
Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is
solely that of creditor and debtor. No member of the Lender Group has (or shall
be deemed to have) any fiduciary relationship or duty to any Loan Party arising
out of or in connection with the Loan Documents or the transactions contemplated
thereby, and there is no agency or joint venture relationship between the
members of the Lender Group, on the one hand, and the Loan Parties, on the other
hand, by virtue of any Loan Document or any transaction contemplated therein.
          17.7 Counterparts; Electronic Execution. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
          17.8 Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by any Borrower or any Guarantor or the transfer to
the Lender Group of any property should for any reason subsequently be asserted,
or declared, to be void or voidable under any state or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (each, a “Voidable Transfer”), and if the
Lender Group is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
then, as to any such Voidable Transfer, or the amount thereof that the Lender
Group is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or Guarantors automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
          17.9 Confidentiality.
                    (a) Agent and Lenders each individually (and not jointly or
jointly and severally) agree that material, non-public information regarding
Parent and its Subsidiaries, their operations, assets, and existing and
contemplated business plans shall be treated by Agent and the Lenders in a
confidential manner, and shall not be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except: (i) to attorneys for and
other advisors, accountants, auditors, and consultants to any member of the
Lender Group, (ii) to Subsidiaries and Affiliates of any member of the Lender
Group (including the Bank Product Providers), provided that any such Subsidiary
or Affiliate shall have agreed to receive such information hereunder subject to
the terms of this Section 17.9, (iii) as may be required by statute, decision,
or judicial or administrative order, rule, or regulation, (iv) as may be agreed
to in advance by Administrative Borrower or as requested or required by any
Governmental Authority pursuant to any subpoena or other legal process, (v) as
to any such information that is or becomes generally available to the public
(other than as a result of prohibited disclosure by Agent or the Lenders),
(vi) in connection with any assignment, participation or pledge of any Lender’s
interest under this Agreement, provided that any such assignee, participant, or
pledgee shall have agreed in writing to receive such information hereunder
subject to the terms of this Section, and (vii) in connection with any
litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or
duties of such parties under this Agreement or the other Loan Documents.
                    (b) Anything in this Agreement to the contrary
notwithstanding, Agent may provide information concerning the terms and
conditions of this Agreement and the other Loan Documents to loan syndication
and pricing reporting services.

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          17.10 Lender Group Expenses. Borrowers agree to pay any and all Lender
Group Expenses promptly after demand therefor by Agent and agrees that their
obligations contained in this Section 17.10 shall survive payment or
satisfaction in full of all other Obligations.
          17.11 USA PATRIOT Act. Each Lender that is subject to the requirements
of the Patriot Act hereby notifies Parent and each Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies Parent and each of its Subsidiaries, which information includes
the name and address of Parent and each of its Subsidiaries and other
information that will allow such Lender to identify Parent and each of its
Subsidiaries in accordance with the Patriot Act.
          17.12 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
          17.13 MedQuist Transcriptions, Ltd. as Agent for Borrowers. Each
Borrower hereby irrevocably appoints MedQuist Transcriptions, Ltd. as the
borrowing agent and attorney-in-fact for all Borrowers (the “Administrative
Borrower”) which appointment shall remain in full force and effect unless and
until Agent shall have received prior written notice signed by each Borrower
that such appointment has been revoked and that another Borrower has been
appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (a) to provide Agent with all notices
with respect to Advances and Letters of Credit obtained for the benefit of any
Borrower and all other notices and instructions under this Agreement and (b) to
take such action as the Administrative Borrower deems appropriate on its behalf
to obtain Advances and Letters of Credit and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this Agreement.
It is understood that the handling of the Loan Account and Collateral of
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to Borrowers in order to utilize the collective borrowing
powers of Borrowers in the most efficient and economical manner and at their
request, and that the Lender Group shall not incur liability to any Borrower or
any other Person as a result hereof. Each Borrower expects to derive benefit,
directly or indirectly, from the handling of the Loan Account and the Collateral
in a combined fashion since the successful operation of each Borrower is
dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(i) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (ii) the Lender Group’s relying on any instructions of the
Administrative Borrower, or (iii) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 17.13 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Agent-Related Person or
Lender-Related Person, as the case may be.
[Signature pages to follow.]

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               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.

            MEDQUIST INC.,
a New Jersey corporation, as Parent
      By:           Title:                MEDQUIST CM LLC,
a Delaware limited liability company, as a Borrower
      By:           Title:                MEDQUIST IP LLC,
a Delaware limited liability company, as a Borrower
      By:           Title:                MEDQUIST TRANSCRIPTIONS, LTD.,
a New Jersey corporation, as a Borrower
      By:           Title:                WELLS FARGO FOOTHILL, LLC,
a Delaware limited liability company, as Agent
and as a Lender
      By:           Title:             

 

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TABLE OF CONTENTS

                 
 
    Page 1.  
DEFINITIONS AND CONSTRUCTION
    1      
 
           
1.1   Definitions
    1      
 
           
1.2   Accounting Terms
    1      
 
           
1.3   Code
    1      
 
           
1.4   Construction
    1      
 
           
1.5   Subsidiaries
    2      
 
           
1.6   Schedules and Exhibits
    2      
 
        2.  
LOAN AND TERMS OF PAYMENT
    3      
 
           
2.1   Revolver Advances
    3      
 
           
2.2   Reserves
    3      
 
           
2.3   Borrowing Procedures and Settlements
    3      
 
           
2.4   Payments; Reductions of Commitments; Prepayments
    7      
 
           
2.5   Overadvances
    10      
 
           
2.6   Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations
    10      
 
           
2.7   Crediting Payments; Clearance Charge
    11      
 
           
2.8   Designated Account
    12      
 
           
2.9   Maintenance of Loan Account; Statements of Obligations
    12      
 
           
2.10   Fees
    12      
 
           
2.11   Letters of Credit
    13      
 
           
2.12   LIBOR Option
    15      
 
           
2.13   Capital Requirements
    17      
 
           
2.14   Joint and Several Liability of Borrowers
    18      
 
           
2.15   Increase in Commitments
    20      
 
        3.  
CONDITIONS; TERM OF AGREEMENT
    22      
 
           
3.1   Conditions Precedent to the Initial Extension of Credit
    22      
 
           
3.2   Conditions Precedent to all Extensions of Credit
    22      
 
           
3.3   Conditions Subsequent to Effectiveness
    22      
 
           
3.4   Term
    22      
 
           
3.5   Effect of Termination
    22      
 
           
3.6   Early Termination by Borrowers
    23      
 
        4.  
REPRESENTATIONS AND WARRANTIES.
    23      
 
           
4.1   Due Organization and Qualification; Subsidiaries
    23      
 
           
4.2   Due Authorization; No Conflict
    24      
 
           
4.3   Governmental Consents
    24      
 
           
4.4   Binding Obligations; Perfected Liens
    24  

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Table of Contents
(continued)

                 
 
    Page    
4.5   Title to Assets; No Encumbrances
    24      
 
           
4.6   Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort    Claims
    25      
 
           
4.7   Litigation
    25      
 
           
4.8   Compliance with Laws
    25      
 
           
4.9   No Material Adverse Change
    25      
 
           
4.10   Fraudulent Transfer
    25      
 
           
4.11   Employee Benefits
    26      
 
           
4.12   Environmental Condition
    26      
 
           
4.13   Intellectual Property
    26      
 
           
4.14   Leases
    26      
 
           
4.15   Deposit Accounts and Securities Accounts
    26      
 
           
4.16   Complete Disclosure
    26      
 
           
4.17   Material Contracts
    27      
 
           
4.18   Patriot Act
    27      
 
           
4.19   Indebtedness
    27      
 
           
4.20   Payment of Taxes
    27      
 
           
4.21   Margin Stock
    28      
 
           
4.22   Governmental Regulation
    28      
 
           
4.23   OFAC
    28      
 
           
4.24   Holding Company; Inactive Subsidiary
    28      
 
           
4.25   Eligible Accounts
    28      
 
           
4.26   Location of Inventory and Equipment
    28      
 
           
4.27   Inventory Records
    28      
 
           
4.28   Customers and Suppliers
    28      
 
           
4.29   HIPAA
    29      
 
           
4.30   Health Laws and Regulations
    29      
 
        5.  
AFFIRMATIVE COVENANTS
    30      
 
           
5.1   Financial Statements, Reports, Certificates
    30      
 
           
5.2   Collateral Reporting
    30      
 
           
5.3   Existence
    30      
 
           
5.4   Maintenance of Properties
    30      
 
           
5.5   Taxes
    31      
 
           
5.6   Insurance
    31      
 
           
5.7   Inspection
    31      
 
       

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Table of Contents
(continued)

                 
 
    Page    
5.8   Compliance with Laws
    31      
 
           
5.9   Environmental
    31      
 
           
5.10   Disclosure Updates
    32      
 
           
5.11   Formation of Subsidiaries
    32      
 
           
5.12   Further Assurances
    33      
 
           
5.13   Lender Meetings
    33      
 
           
5.14   Material Contracts
    33      
 
           
5.15   Location of Inventory and Equipment
    33      
 
           
5.16   HIPAA; HITECH Act; Healthcare Laws
    33      
 
           
5.17   Health Laws and Regulations
    34      
 
        6.  
NEGATIVE COVENANTS
    34      
 
           
6.1   Indebtedness
    34      
 
           
6.2   Liens
    34      
 
           
6.3   Restrictions on Fundamental Changes
    34      
 
           
6.4   Disposal of Assets
    34      
 
           
6.5   Change Name
    35      
 
           
6.6   Nature of Business
    35      
 
           
6.7   Prepayments and Amendments
    35      
 
           
6.8   Change of Control
    35      
 
           
6.9   Distributions
    35      
 
           
6.10   Accounting Methods
    36      
 
           
6.11   Investments
    36      
 
           
6.12   Transactions with Affiliates
    37      
 
           
6.13   Use of Proceeds
    37      
 
           
6.14   Holding Company; Inactive Subsidiary
    38      
 
           
6.15   Consignments
    38      
 
           
6.16   Inventory and Equipment with Bailees
    38      
 
        7.  
FINANCIAL COVENANTS
    38      
 
        8.  
EVENTS OF DEFAULT
    39      
 
        9.  
RIGHTS AND REMEDIES
    41      
 
           
9.1   Rights and Remedies
    41      
 
           
9.2   Remedies Cumulative
    41      
 
        10.  
WAIVERS; INDEMNIFICATION
    42  

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Table of Contents
(continued)

                 
 
    Page    
10.1   Demand; Protest; etc
    42      
 
           
10.2   The Lender Group’s Liability for Collateral
    42      
 
           
10.3   Indemnification
    42      
 
        11.  
NOTICES
    42      
 
        12.  
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
    43      
 
        13.  
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS
    44      
 
           
13.1   Assignments and Participations
    44      
 
           
13.2   Successors
    47      
 
        14.  
AMENDMENTS; WAIVERS
    47      
 
           
14.1   Amendments and Waivers
    47      
 
           
14.2   Replacement of Holdout Lender
    48      
 
           
14.3   No Waivers; Cumulative Remedies
    48      
 
        15.  
AGENT; THE LENDER GROUP
    49      
 
           
15.1   Appointment and Authorization of Agent
    49      
 
           
15.2   Delegation of Duties
    49      
 
           
15.3   Liability of Agent
    49      
 
           
15.4   Reliance by Agent
    50      
 
           
15.5   Notice of Default or Event of Default
    50      
 
           
15.6   Credit Decision
    50      
 
           
15.7   Costs and Expenses; Indemnification
    51      
 
           
15.8   Agent in Individual Capacity
    51      
 
           
15.9   Successor Agent
    51      
 
           
15.10   Lender in Individual Capacity
    52      
 
           
15.11   Collateral Matters
    52      
 
           
15.12   Restrictions on Actions by Lenders; Sharing of Payments
    53      
 
           
15.13   Agency for Perfection
    53      
 
           
15.14   Payments by Agent to the Lenders
    53      
 
           
15.15   Concerning the Collateral and Related Loan Documents
    53      
 
           
15.16   Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information
    53      
 
           
15.17   Several Obligations; No Liability
    54      
 
        16.  
WITHHOLDING TAXES
    55      
 
        17.  
GENERAL PROVISIONS
    57      
 
       

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Table of Contents
(continued)

                 
 
    Page    
17.1   Effectiveness
    57      
 
           
17.2   Section Headings
    57      
 
           
17.3   Interpretation
    57      
 
           
17.4   Severability of Provisions
    57      
 
           
17.5   Bank Product Providers
    57      
 
           
17.6   Debtor-Creditor Relationship
    58      
 
           
17.7   Counterparts; Electronic Execution
    58      
 
           
17.8   Revival and Reinstatement of Obligations
    58      
 
           
17.9   Confidentiality
    58      
 
           
17.10   Lender Group Expenses
    59      
 
           
17.11   USA PATRIOT Act
    59      
 
           
17.12   Integration
    59      
 
           
17.13   MedQuist Transcriptions, Ltd. as Agent for Borrowers
    59  

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EXHIBITS AND SCHEDULES

     
Exhibit A-1
  Form of Assignment and Acceptance
Exhibit B-1
  Form of Borrowing Base Certificate
Exhibit C-1
  Form of Compliance Certificate
Exhibit L-1
  Form of LIBOR Notice
 
   
Schedule A-1
  Agent’s Account
Schedule A-2
  Authorized Persons
Schedule C-1
  Commitments
Schedule D-1
  Designated Account
Schedule G-1
  Guarantors
Schedule P-1
  Permitted Intercompany Advances
Schedule P-2
  Permitted Investments
Schedule P-3
  Permitted Liens
Schedule 1.1
  Definitions
Schedule 3.1
  Conditions Precedent
Schedule 3.3
  Conditions Subsequent
Schedule 4.1(b)
  Capitalization of Parent
Schedule 4.1(c)
  Capitalization of Parent’s Subsidiaries
Schedule 4.6(a)
  States of Organization
Schedule 4.6(b)
  Chief Executive Offices
Schedule 4.6(c)
  Organizational Identification Numbers
Schedule 4.6(d)
  Commercial Tort Claims
Schedule 4.12
  Environmental Matters
Schedule 4.13
  Intellectual Property
Schedule 4.15
  Deposit Accounts and Securities Accounts
Schedule 4.17
  Material Contracts
Schedule 4.19
  Permitted Indebtedness
Schedule 4.26
  Locations of Inventory and Equipment
Schedule 4.30
  Health Laws and Regulations
Schedule 5.1
  Financial Statements, Reports, Certificates
Schedule 5.2
  Collateral Reporting
Schedule 6.6
  Nature of Business
Schedule 6.12
  Transactions with Affiliates

 

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Schedule A-1
Agent’s Account
          An account at a bank designated by Agent from time to time as the
account into which Borrower shall make all payments to Agent for the benefit of
the Lender Group and into which the Lender Group shall make all payments to
Agent under the Agreement and the other Loan Documents; unless and until Agent
notifies Administrative Borrower and the Lender Group to the contrary, Agent’s
Account shall be that certain deposit account bearing account number 4121624308
and maintained by Agent with Wells Fargo Bank, N.A., San Francisco, CA, ABA
#XXXXXXXXXXX.

 

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Schedule C-1
Commitments

                  Lender   Revolver Commitment     Total Commitment  
Wells Fargo Foothill, LLC
  $ 25,000,000     $ 25,000,000  
All Lenders
  $ 25,000,000     $ 25,000,000  

 

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Schedule G-1
Guarantors
MedQuist of Delaware, Inc.

 

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Schedule 1.1
As used in the Agreement, the following terms shall have the following
definitions:
               “Account” means an account (as that term is defined in the Code).
               “Account Debtor” means any Person who is obligated on an Account,
chattel paper, or a general intangible.
               “ACH Transactions” means any cash management or related services
(including the Automated Clearing House processing of electronic fund transfers
through the direct Federal Reserve Fedline system) provided by a Bank Product
Provider for the account of Parent or its Subsidiaries.
               “Accommodation Charge” means any reduction of the selling price
of any Loan Parties’ services pursuant to the Accommodation Program.
               “Accommodation Program” means a program established by the Loan
Parties in response to customers’ concerns regarding historical billing
practices, pursuant to which such Loan Parties offer financial accommodations to
certain customers on an individualized basis in an effort to reach a settlement
with such customers.
               “Acquired Indebtedness” means Indebtedness of a Person whose
assets or Stock is acquired by Parent or any of its Subsidiaries in a Permitted
Acquisition, provided that such Indebtedness (a) is either Purchase Money
Indebtedness or a Capital Lease with respect to Equipment or mortgage financing
with respect to Real Property, and (b) was not incurred in connection with, or
in contemplation of, such Permitted Acquisition.
               “Acquisition” means (a) a Stock Acquisition, or (b) an Asset
Acquisition, as the context requires.
               “Additional Commitment Lender” has the meaning specified therefor
in Section 2.15 of the Agreement.
               “Additional Documents” has the meaning specified therefor in
Section 5.12 of the Agreement.
               “Administrative Borrower” has the meaning specified therefor in
Section 17.13 of the Agreement.
               “Advances” has the meaning specified therefor in Section 2.1(a)
of the Agreement.
               “Affected Lender” has the meaning specified therefor in
Section 2.13(b) of the Agreement.
               “Affiliate” means, as applied to any Person, any other Person who
controls, is controlled by, or is under common control with, such Person. For
purposes of this definition, “control” means the possession, directly or
indirectly through one or more intermediaries, of the power to direct the
management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of the definition
of Eligible Accounts and Section 6.12 of the Agreement: (a) any Person which
owns directly or indirectly 10% or more of the Stock having ordinary voting
power for the election of directors or other members of the governing body of a
Person or 10% or more of the partnership or other ownership interests of a
Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a Person
shall be deemed to be an Affiliate of such Person, and (c) each partnership in
which a Person is a general partner shall be deemed an Affiliate of such Person.

Schedule 1.1-1

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               “Agent” has the meaning specified therefor in the preamble to the
Agreement.
               “Agent-Related Persons” means Agent, together with its
Affiliates, officers, directors, employees, attorneys, and agents.
               “Agent’s Account” means the Deposit Account of Agent identified
on Schedule A-1.
               “Agent’s Liens” means the Liens granted by Parent or its
Subsidiaries to Agent under the Loan Documents.
               “Agreement” means the Credit Agreement to which this Schedule 1.1
is attached.
               “Application Event” means the occurrence of (a) a failure by
Borrowers to repay all of the Obligations on the Maturity Date, or (b) an Event
of Default and the election by Agent or the Required Lenders to require that
payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) of
the Agreement.
               “Asset Acquisition” means the purchase or other acquisition by a
Person or its Subsidiaries of all or substantially all of the assets of (or any
division or business line of) any other Person.
               “Assignee” has the meaning specified therefor in Section 13.1(a)
of the Agreement.
               “Assignment and Acceptance” means an Assignment and Acceptance
Agreement substantially in the form of Exhibit A-1.
               “Authorized Person” means any one of the individuals identified
on Schedule A-2.
               “Availability” means, as of any date of determination, the amount
that Borrowers are entitled to borrow as Advances under Section 2.1 of the
Agreement (after giving effect to all then outstanding Obligations (other than
Bank Product Obligations)).
               “Availability Block” means (a) during the period from the Closing
Date to the Increase Effective Date, $4,000,000 and (b) from and after the
Increase Effective Date, $6,000,000; provided that the amount of the
Availability Block specified in this clause (b) shall be reduced to $4,500,000
on any date after the one year anniversary of the Closing Date so long as (i) no
Default or Event of Default shall have occurred and be continuing either before
or after giving effect to such reduction and (2) Borrowers shall have Excess
Availability plus Qualified Cash in an aggregate amount of not less than
$20,000,000 both before and after giving effect to such reduction.
               “Average Excess Availability” means, as of any date of
determination, the sum of (a) the average of the Excess Availability for the
30 day period prior to the date of determination plus (b) the average of the
aggregate amount of Qualified Cash of the Loan Parties for the 30-day period
prior to the date of determination.
               “Bank Product” means any financial accommodation extended to
Parent or its Subsidiaries by a Bank Product Provider (other than pursuant to
the Agreement) including: (a) credit cards, (b) credit card processing services,
(c) debit cards, (d) purchase cards, (e) ACH Transactions, (f) cash management,
including controlled disbursement, accounts or services, or (g) transactions
under Hedge Agreements.
               “Bank Product Agreements” means those agreements entered into
from time to time by Parent or its Subsidiaries with a Bank Product Provider in
connection with the obtaining of any of the Bank Products.

Schedule 1.1-2

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               “Bank Product Collateralization” means providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent) to be held by Agent
for the benefit of the Bank Product Providers in an amount determined by Agent
as sufficient to satisfy the reasonably estimated credit exposure with respect
to the then existing Bank Products.
               “Bank Product Obligations” means (a) all obligations,
liabilities, reimbursement obligations, fees, or expenses owing by Parent or its
Subsidiaries to any Bank Product Provider pursuant to or evidenced by a Bank
Product Agreement and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and (b) all amounts that Parent or its Subsidiaries are
obligated to reimburse to Agent or any member of the Lender Group as a result of
Agent or such member of the Lender Group purchasing participations from, or
executing guarantees or indemnities or reimbursement obligations to, a Bank
Product Provider with respect to the Bank Products provided by such Bank Product
Provider to Parent or its Subsidiaries.
               “Bank Product Provider” means Wells Fargo or any of its
Affiliates.
               “Bank Product Reserve” means, as of any date of determination,
the amount of reserves that Agent has established (based upon the Bank Product
Providers’ reasonable determination of the credit exposure of Parent and its
Subsidiaries in respect of Bank Products) in respect of Bank Products then
provided or outstanding.
               “Bankruptcy Code” means title 11 of the United States Code, as in
effect from time to time.
               “Base LIBOR Rate” means the greater of (a) 2.50 percent per
annum, and (b) the rate per annum, determined by Agent in accordance with its
customary procedures, and utilizing such electronic or other quotation sources
as it considers appropriate, to be the rate at which Dollar deposits (for
delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market 2 Business Days prior to the commencement
of the requested Interest Period, for a term and in an amount comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrower in accordance
with the Agreement, which determination shall be conclusive in the absence of
manifest error.
               “Base Rate” means the greatest of (a) 3.00 percent per annum,
(b) the Federal Funds Rate plus 1/2%, (c) the LIBOR Rate (which rate shall be
calculated based upon an Interest Period of 3 months and shall be determined on
a daily basis) plus 1.00% and (d) the rate of interest announced, from time to
time, within Wells Fargo at its principal office in San Francisco as its “prime
rate”, with the understanding that the “prime rate” is one of Wells Fargo’s base
rates (not necessarily the lowest of such rates) and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Wells Fargo may designate.
               “Base Rate Loan” means the portion of the Advances that bears
interest at a rate determined by reference to the Base Rate.
               “Base Rate Margin” means, as of any date of determination (with
respect to any portion of the outstanding Advances on such date that is a Base
Rate Loan), the applicable margin set forth in the following table that
corresponds to the most recent Average Excess Availability calculation performed
by Agent (the “Average Excess Availability Calculation”); provided, however,
that (a) for the period from the Closing Date through the date Agent performs
the Average Excess Availability Calculation in respect of the testing period
ending September 30, 2009, the Base Rate Margin shall be at the margin in the
row styled “Level II”, and (b) at any time that a Default or an Event of Default
shall have occurred and be continuing, the Base Rate Margin shall be at the
margin in the row styled “Level I”:

Schedule 1.1-3

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              Average Excess Availability     Level   Calculation   Base Rate
Margin
I
  If the Average Excess Availability is less than or equal to $20,000,000  
4.00 percentage points
 
       
II
  If the Average Excess Availability is greater than $20,000,000  
3.75 percentage points

               Except as set forth in the foregoing proviso, the Base Rate
Margin shall be based upon the most recent determination by Agent of the Average
Excess Availability Calculation, which will be calculated as of the end of each
fiscal quarter. Except as set forth in the foregoing proviso, the Base Rate
Margin shall be re-determined quarterly on the first day of the month following
the date of delivery by Parent and its Subsidiaries to Agent of the report
described in clause (i) of Schedule 5.2 of the Agreement; provided, however,
that if Parent and its Subsidiaries fail to provide such report when such report
is due, the Base Rate Margin shall be set at the margin in the row styled “Level
I” as of the first day of the month following the date on which such report was
required to be delivered until the date on which such report is delivered (on
which date (but not retroactively), without constituting a waiver of any Default
or Event of Default occasioned by the failure to timely deliver such report, the
Base Rate Margin shall be set at the margin based upon the Average Excess
Availability Calculation determined by Agent based upon the information
contained in such report. In the event that the information used by Agent to
perform the Average Excess Availability Calculation contained in any such report
is shown to be inaccurate, and such inaccuracy, if corrected, would have led to
the application of a higher Base Rate Margin for any period (a “Base Rate
Period”) than the Base Rate Margin actually applied for such Base Rate Period,
then (i) Administrative Borrower shall immediately deliver to Agent a correct
report for such Base Rate Period, (ii) the Base Rate Margin shall be determined
as if the correct Base Rate Margin (as set forth in the table above) were
applicable for such Base Rate Period, and (iii) Administrative Borrower shall
immediately deliver to Agent full payment in respect of the accrued additional
interest as a result of such increased Base Rate Margin for such Base Rate
Period, which payment shall be promptly applied by Agent to the affected
Obligations.
               “Benefit Plan” means a “defined benefit plan” (as defined in
Section 3(35) of ERISA) for which Parent or any of its Subsidiaries or ERISA
Affiliates has been an “employer” (as defined in Section 3(5) of ERISA) within
the past six years.
               “Board of Directors” means the board of directors (or comparable
managers) of Parent or any committee thereof duly authorized to act on behalf of
the board of directors (or comparable managers).
               “Borrower” and “Borrowers” have the meaning specified therefor in
the preamble to the Agreement.
               “Borrowing” means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of a Protective
Advance.
               “Borrowing Base” means, as of any date of determination, the
result of:

  (a)   85% of the amount of Eligible Accounts, less the amount, if any, of the
Dilution Reserve, minus     (b)   the Availability Block, minus

Schedule 1.1-4

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  (c) the sum of (i) the Bank Product Reserve, and (ii) the aggregate amount of
reserves, if any, established by Agent under Section 2.2 of the Agreement.

               “Borrowing Base Certificate” means a certificate in the form of
Exhibit B-1.
               “Business Day” means any day that is not a Saturday, Sunday, or
other day on which banks are authorized or required to close in the state of New
York, except that, if a determination of a Business Day shall relate to a LIBOR
Rate Loan, the term “Business Day” also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.
               “Capital Expenditures” means, with respect to any Person for any
period, the aggregate of all expenditures by such Person and its Subsidiaries
during such period that are capital expenditures as determined in accordance
with GAAP, whether such expenditures are paid in cash or financed, which
expenditures are, as of the Closing Date, reflected on the statements of cash
flows of Parent and its Subsidiaries required to be delivered to Agent and
Lenders pursuant to Section 5.1 under the line items “Purchases of property and
equipment, net” and “Capitalized software.”
               “Capitalized Lease Obligation” means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.
               “Capital Lease” means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
               “Cash Equivalents” means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States or issued by any agency
thereof and backed by the full faith and credit of the United States, in each
case maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued or fully guaranteed by any state of the United States
or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the
time of acquisition, having one of the two highest ratings obtainable from
either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc.
(“Moody’s”), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time
deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year
from the date of acquisition thereof issued by any bank organized under the laws
of the United States or any state thereof or the District of Columbia or any
United States branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts
maintained with (i) any bank that satisfies the criteria described in clause
(d) above, or (ii) any other bank organized under the laws of the United States
or any state thereof so long as the full amount maintained with any such other
bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase
obligations of any commercial bank satisfying the requirements of clause (d) of
this definition or recognized securities dealer having combined capital and
surplus of not less than $250,000,000, having a term of not more than seven
days, with respect to securities satisfying the criteria in clauses (a) or
(d) above, (g) debt securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any commercial
bank satisfying the criteria described in clause (d) above, and (h) Investments
in money market funds substantially all of whose assets are invested in the
types of assets described in clauses (a) through (g) above.
               “CFC” means a controlled foreign corporation (as that term is
defined in the IRC).
               “Change of Control” means that (a) any “person” or “group”
(within the meaning of Sections 13(d) and 14(d) of the Exchange Act) other than
the Equity Sponsor or its Affiliates becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 20%, or more, of
the Stock of Parent having the right to vote for the election of members of the
Board of Directors, (b) a majority of the

Schedule 1.1-5

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

 

members of the Board of Directors do not constitute Continuing Directors, or
(c) Parent fails to own and control, directly or indirectly, 100% of the Stock
of each of its Subsidiaries.
               “Closing Date” means the date of the making of the initial
Advance (or other extension of credit) hereunder.
               “Code” means the New York Uniform Commercial Code, as in effect
from time to time.
               “Collateral” means all assets and interests in assets and
proceeds thereof now owned or hereafter acquired by Parent or its Subsidiaries
in or upon which a Lien is granted by such Person in favor of Agent or the
Lenders under any of the Loan Documents.
               “Collateral Access Agreement” means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in Parent’s or its Subsidiaries’ books and records,
Equipment or Inventory, in each case, in form and substance reasonably
satisfactory to Agent.
               “Collections” means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, cash proceeds of asset
sales, rental proceeds, and tax refunds).
               “Commitment” means, with respect to each Lender, its Revolver
Commitment or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments or their Total Commitments, as the
context requires, in each case as such Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement.
               “Commitment Increase” has the meaning specified therefor in
Section 2.15 of the Agreement.
               “Compliance Certificate” means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Parent to Agent.
               “Continuing Director” means (a) any member of the Board of
Directors who was a director (or comparable manager) of Parent on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was approved, appointed or nominated
for election to the Board of Directors by a majority of the Continuing
Directors, but excluding any such individual originally proposed for election in
opposition to the Board of Directors in office at the Closing Date in an actual
or threatened election contest relating to the election of the directors (or
comparable managers) of Parent and whose initial assumption of office resulted
from such contest or the settlement thereof.
               “Contribution Agreement” means a contribution agreement executed
and delivered by each Loan Party, the form and substance of which is
satisfactory to Agent.
               “Control Agreement” means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by Parent or
one of its Subsidiaries, Agent, and the applicable securities intermediary (with
respect to a Securities Account) or bank (with respect to a Deposit Account).
               “Controlled Account Agreement” has the meaning specified therefor
in the Security Agreement.
               “Copyright Security Agreement” has the meaning specified therefor
in the Security Agreement.

Schedule 1.1-6

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               “Daily Balance” means, as of any date of determination and with
respect to any Obligation, the amount of such Obligation owed at the end of such
day.
               “Default” means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
               “Defaulting Lender” means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
               “Defaulting Lender Rate” means (a) for the first 3 days from and
after the date the relevant payment is due, the Base Rate, and (b) thereafter,
the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
               “Deposit Account” means any deposit account (as that term is
defined in the Code).
               “Designated Account” means the Deposit Account of Administrative
Borrower identified on Schedule D-1.
               “Designated Account Bank” has the meaning specified therefor in
Schedule D-1.
               “Dilution” means, as of any date of determination, a percentage,
based upon the experience of the immediately prior 90 consecutive days, that is
the result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Borrowers’ Accounts during such period, by (b) Borrowers’ billings with respect
to Accounts during such period.
               “Dilution Reserve” means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts by
1 percentage point for each percentage point by which Dilution is in excess of
5%.
               “Dollars” or “$” means United States dollars.
               “EBITDA” means, with respect to any fiscal period, the result of
(a) Parent’s consolidated net earnings (or loss) for such period determined on a
consolidated basis in accordance with GAAP, but excluding the earnings (or loss)
of any Specified Subsidiary and A-Life Medical, Inc., plus (b) the sum of the
following amounts for such period and to the extent deducted in determining net
earnings (or loss) for such period: (i) interest expense, (ii) income tax
expense, (iii) depreciation expense, (iv) amortization expense, (v) non-cash
extraordinary losses, (vi) Excess Legacy Legal Fees, (vii) Legacy Litigation
Settlements, (viii) fees and expenses incurred in connection with Permitted
Acquisitions in an aggregate amount not to exceed $1,000,000 during the term of
the Agreement, (ix) any non-cash restructuring charges (including but not
limited to non-cash severance costs), (x) non-cash amortization and impairment
charges, (xi) non-cash compensation charges and deferred compensation charges
(including but not limited to stock based compensation and compensation in
respect of any long term incentive plan), (xii) non-cash translation losses with
respect to foreign currency fluctuations or with respect to any hedging
activity, minus (c) the sum of the following amounts for such period: (i) any
extraordinary gains and (ii) non-cash translation gains with respect to foreign
currency fluctuations or with respect to any hedging activity.
               “Eligible Accounts” means those Accounts created by a Borrower in
the ordinary course of its business, that arise out of such Borrower’s sale of
goods or rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, however, that such criteria may be revised from time
to time by Agent in Agent’s Permitted Discretion to address the results of any
audit performed by Agent from time to time after the Closing Date. In
determining the amount

Schedule 1.1-7

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

 

to be included, Eligible Accounts shall be calculated net of customer deposits
and unapplied cash. Eligible Accounts shall not include the following:
               (a) Accounts (i) that the Account Debtor has failed to pay within
90 days of original invoice date, (ii) with selling terms of more than 60 days
or (iii) that are more than 60 days past due (other than (A) Accounts of Bascom
Palmer (ABLEH) and University of Miami Medical Group in an aggregate amount not
to exceed $250,000, to the extent that (1) such Account Debtor has failed to pay
such Accounts more than 90 days (but not more than 120 days) of original invoice
date or (2) such Accounts have selling terms of more than 60 days (but not more
than 90 days), provided that in each case of clauses (1) and (2), such Accounts
are not more than 60 days past due),
               (b) Accounts owed by an Account Debtor (or its Affiliates) where
50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above,
               (c) Accounts with respect to which the Account Debtor is an
Affiliate of a Borrower or an employee or agent of a Borrower or any Affiliate
of a Borrower,
               (d) Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a bill and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional,
               (e) Accounts that are not payable in Dollars,
               (f) Accounts with respect to which the Account Debtor either
(i) does not maintain its chief executive office in the United States or Canada,
or (ii) is not organized under the laws of the United States, any state thereof,
Canada or any province thereof, or (iii) is the government of any foreign
country or sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public corporation,
or other instrumentality thereof, unless (y) the Account is supported by an
irrevocable letter of credit reasonably satisfactory to Agent (as to form,
substance, and issuer or domestic confirming bank) that has been delivered to
Agent and is directly drawable by Agent, or (z) the Account is covered by credit
insurance in form, substance, and amount, and by an insurer, reasonably
satisfactory to Agent,
               (g) Accounts with respect to which the Account Debtor is either
(i) the United States or any department, agency, or instrumentality of the
United States (exclusive, however, of Accounts with respect to which the
applicable Borrower has complied, to the reasonable satisfaction of Agent, with
the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United
States,
               (h) Accounts (i) that are subject to customer debit memos,
chargebacks or volume rebates to the extent of such customer debit memo,
chargeback or volume rebate or (ii) with respect to which the Account Debtor is
a creditor of a Borrower, has or has asserted a right of setoff or Accommodation
Charge, or has disputed its obligation to pay all or any portion of the Account,
to the extent of such claim, right of setoff, Accommodation Charge or dispute,
               (i) Accounts with respect to an Account Debtor whose total
obligations owing to Borrowers exceed 10% (such percentage, as applied to a
particular Account Debtor, being subject to reduction by Agent in its Permitted
Discretion if the creditworthiness of such Account Debtor deteriorates) of all
Eligible Accounts, to the extent of the obligations owing by such Account Debtor
in excess of such percentage; provided, however, that, in each case, the amount
of Eligible Accounts that are excluded because they exceed the foregoing
percentage shall be determined by Agent based on all of the otherwise Eligible
Accounts prior to giving effect to any eliminations based upon the foregoing
concentration limit,

Schedule 1.1-8

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

 

               (j) Accounts with respect to which the Account Debtor is subject
to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to
which a Borrower has received notice of an imminent Insolvency Proceeding or a
material impairment of the financial condition of such Account Debtor,
               (k) Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor’s financial
condition,
               (l) Accounts that are not subject to a valid and perfected first
priority Agent’s Lien,
               (m) Accounts with respect to which (i) the goods giving rise to
such Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor,
               (n) Accounts with respect to which the Account Debtor is a
Sanctioned Person or Sanctioned Entity,
               (o) Accounts that represent deferred revenue, the right to
receive progress payments or other advance billings that are due prior to the
completion of performance by the applicable Borrower of the subject contract for
goods or services; or
               (p) Accounts created by a Specified Subsidiary that was
designated as a Subsidiary in accordance with Section 1.5(c) until such time as
Agent has completed due diligence and any other appraisals and examinations with
respect to such Person and its Accounts that it deems reasonably necessary, and
the results of which are reasonably satisfactory to Agent .
               “Eligible Transferee” means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Person that is a Lender or an Affiliate (other than
individuals) of a Lender, (e) so long as no Default or Event of Default has
occurred and is continuing, any other Person approved by Agent and
Administrative Borrower (such approval by Administrative Borrower not to be
unreasonably withheld, conditioned or delayed), and (f) during the continuation
of a Default or an Event of Default, any other Person approved by Agent.
               “Environmental Action” means any written complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, judicial
or administrative proceeding, judgment, letter, or other written communication
from any Governmental Authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (a) any assets,
properties, or businesses of any Borrower, any Subsidiary of a Borrower, or any
of their predecessors in interest, (b) from adjoining properties or businesses,
or (c) from or onto any facilities which received Hazardous Materials generated
by any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.
               “Environmental Law” means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy, or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent
binding on Parent or its Subsidiaries, relating to the environment, the effect
of the environment on employee health, or Hazardous Materials, in each case as
amended from time to time.

Schedule 1.1-9

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               “Environmental Liabilities” means all liabilities, monetary
obligations, losses, damages, punitive damages, consequential damages, treble
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.
               “Environmental Lien” means any Lien in favor of any Governmental
Authority for Environmental Liabilities.
               “Equipment” means equipment (as that term is defined in the
Code).
               “Equity Sponsor” means S.A.C. PEI CB Investment L.P.
               “ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
               “ERISA Affiliate” means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Parent or its Subsidiaries under IRC Section 414(b), (b) any trade or business
subject to ERISA whose employees are treated as employed by the same employer as
the employees of Parent or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Parent or any of its Subsidiaries is a member under IRC Section 414(m), or
(d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any
Person subject to ERISA that is a party to an arrangement with Parent or any of
its Subsidiaries and whose employees are aggregated with the employees of Parent
or its Subsidiaries under IRC Section 414(o).
               “Event of Default” has the meaning specified therefor in
Section 8 of the Agreement.
               “Excess Legacy Legal Fees” means legal fees and expenses relating
to any litigation as disclosed in Parent’s Form-10K as of December 31, 2008 or
Form 10Q as of March 31, 2009 and paid on or prior to June 30, 2009, in an
aggregate amount not to exceed $6,000,000.
               “Excess Availability” means, as of any date of determination, the
amount equal to Availability minus the aggregate amount, if any, of all trade
payables of Parent and its Subsidiaries aged in excess of historical levels with
respect thereto and all book overdrafts of Parent and its Subsidiaries in excess
of historical practices with respect thereto, in each case as determined by
Agent in its Permitted Discretion.
               “Exchange Act” means the Securities Exchange Act of 1934, as in
effect from time to time.
               “Extraordinary Receipts” means any cash received by Parent or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds described in Section 2.4(e)(i) of the Agreement) consisting of
(a) proceeds of judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, (b) indemnity payments (other than
to the extent such indemnity payments are (i) immediately payable to a Person
that is not an Affiliate of Parent or any of its Subsidiaries, or (ii) received
by Parent or any of its Subsidiaries as reimbursement for any payment previously
made to such Person), and (c) any purchase price adjustment (other than a
working capital adjustment) received in connection with any purchase agreement.
               “Fee Letter” means that certain fee letter by and among Borrowers
and Agent, in form and substance reasonably satisfactory to Agent.

Schedule 1.1-10

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               “Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal to, for each day during such period, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by Agent from three
Federal funds brokers of recognized standing selected by it.
               “Fixed Charges” means, with respect to any fiscal period and with
respect to Parent determined on a consolidated basis in accordance with GAAP,
the sum, without duplication, of (a) Net Interest Expense accrued during such
period, (b) principal payments in respect of Indebtedness that are required to
be paid during such period and (c) all federal, state, and local income taxes
paid in cash during such period.
               “Fixed Charge Coverage Ratio” means, with respect to Parent for
any period, the ratio of (i) EBITDA for such period minus Capital Expenditures
made (to the extent not already incurred in a prior period) or incurred during
such period, to (ii) Fixed Charges for such period.
               “Foreign Lender” means any Lender or Participant that is not a
United States person within the meaning of IRC section 7701(a)(30).
               “Funding Date” means the date on which a Borrowing occurs.
               “Funding Losses” has the meaning specified therefor in
Section 2.12(b)(ii) of the Agreement.
               “GAAP” means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
               “Governing Documents” means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
               “Governmental Authority” means any federal, state, local, or
other governmental or administrative body, instrumentality, board, department,
or agency or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or body.
               “Guarantors” means (a) Parent, (b) each Subsidiary of Parent
identified on Schedule G-1, and (c) each other Person that becomes a guarantor
after the Closing Date pursuant to Section 5.11 of the Agreement or otherwise,
and “Guarantor” means any one of them.
               “Guaranty” means that certain general continuing guaranty
executed and delivered by each Guarantor in favor of Agent, for the benefit of
the Lender Group and the Bank Product Providers, in form and substance
reasonably satisfactory to Agent.
               “Hazardous Materials” means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as “hazardous substances,” “hazardous materials,” “hazardous
wastes,” “toxic substances,” or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
               “Healthcare Laws” has the meaning specified therefor in
Section 4.30 of the Agreement.

Schedule 1.1-11

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               “Hedge Agreement” means any and all agreements or documents now
existing or hereafter entered into by Parent or any of its Subsidiaries that
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Parent’s or any of its
Subsidiaries’ exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security, or currency valuations or commodity prices.
               “HIPAA” has the meaning specified therefor in Section 4.29 of the
Agreement.
               “HIPAA Commitments” has the meaning specified therefor in
Section 4.29 of the Agreement.
               “HIPAA Laws and Regulations” has the meaning specified therefor
in Section 4.29 of the Agreement.
               “HITECH Act” has the meaning specified therefor in Section 4.30
of the Agreement.
               “Holdout Lender” has the meaning specified therefor in
Section 14.2(a) of the Agreement.
               “Inactive Subsidiary” means each of LHC Canada, Inc., a Delaware
corporation, and LHC Australia, Inc., a Delaware corporation; provided, that
Parent may designate an Inactive Subsidiary as a non-Inactive Subsidiary for
purposes of the Agreement by giving Agent written notice of such designation if
(a) such designation would not cause a Default or an Event of Default to occur
and be continuing immediately after such designation and (b) Parent and its
Subsidiaries comply with the provisions of Section 5.11 with respect the
Inactive Subsidiary so designated.
               “Increase Effective Date” has the meaning specified therefor in
Section 2.15 of the Agreement.
               “Indebtedness” means (a) all obligations for borrowed money,
(b) all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, or other financial products, (c) all obligations as
a lessee under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of a Person or its Subsidiaries, irrespective of
whether such obligation or liability is assumed, (e) all obligations to pay the
deferred purchase price of assets (other than trade payables incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), (f) all obligations owing under Hedge Agreements (which amount shall
be calculated based on the amount that would be payable by such Person if the
Hedge Agreement were terminated on the date of determination), (g) any
Prohibited Preferred Stock and (h) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (g) above. For
purposes of this definition, (i) the amount of any Indebtedness represented by a
guaranty or other similar instrument shall be the lesser of the principal amount
of the obligations guaranteed and still outstanding and the maximum amount for
which the guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
described in clause (d) above shall be the lower of the amount of the obligation
and the fair market value of the assets securing such obligation.
               “Indemnified Liabilities” has the meaning specified therefor in
Section 10.3 of the Agreement.
               “Indemnified Person” has the meaning specified therefor in
Section 10.3 of the Agreement.
               “Insolvency Proceeding” means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law,

Schedule 1.1-12

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assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.
               “Intercompany Subordination Agreement” means a subordination
agreement executed and delivered by Parent, each of its Subsidiaries, and Agent,
the form and substance of which is reasonably satisfactory to Agent.
               “Interest Period” means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, however,
that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (b) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (c) with
respect to an 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), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, or 3 months
after the date on which the Interest Period began, as applicable, and
(d) Borrowers may not elect an Interest Period which will end after the Maturity
Date.
               “Inventory” means inventory (as that term is defined in the
Code).
               “Investment” means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, capital contributions (excluding (a) commission, travel,
and similar advances to officers and employees of such Person made in the
ordinary course of business, and (b) bona fide Accounts arising in the ordinary
course of business consistent with past practice), or acquisitions of
Indebtedness, Stock, or all or substantially all of the assets of such other
Person (or of any division or business line of such other Person), and any other
items that are or would be classified as investments on a balance sheet prepared
in accordance with GAAP.
               “IRC” means the Internal Revenue Code of 1986, as in effect from
time to time.
               “Issuing Lender” means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender’s sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to Section 2.11 of the Agreement.
               “L/C” has the meaning specified therefor in Section 2.11(a) of
the Agreement.
               “L/C Disbursement” means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
               “L/C Undertaking” has the meaning specified therefor in
Section 2.11(a) of the Agreement.
               “Legacy Litigation Settlements” means any settlements paid by
Parent relating to the Anthurium patent litigation in an aggregate amount not to
exceed $5,800,000 during the term of the Agreement.
               “Lender” and “Lenders” have the respective meanings set forth in
the preamble to the Agreement, and shall include any other Person made a party
to the Agreement in accordance with the provisions of Section 13.1 of the
Agreement.
               “Lender Group” means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.

Schedule 1.1-13

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               “Lender Group Expenses” means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by Parent or its
Subsidiaries under any of the Loan Documents that are paid, advanced, or
incurred by the Lender Group, (b) reasonable out-of-pocket fees or charges paid
or incurred by Agent in connection with the Lender Group’s transactions with
Parent or its Subsidiaries under any of the Loan Documents, including, fees or
charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien, litigation, and
UCC searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic collateral appraisals or business
valuations to the extent of the fees and charges (and up to the amount of any
limitation) contained in the Agreement or the Fee Letter), real estate surveys
(only to the extent such real estate is or will become Collateral of the Lender
Group), real estate title policies and endorsements (only to the extent such
real estate is or will become Collateral of the Lender Group), and environmental
audits (only to the extent such real estate is or will become Collateral of the
Lender Group), (c) reasonable out-of-pocket costs and expenses incurred by Agent
in the disbursement of funds to Borrowers or other members of the Lender Group
(by wire transfer or otherwise), (d) out-of-pocket charges paid or incurred by
Agent resulting from the dishonor of checks payable by or to any Loan Party, (e)
reasonable out-of-pocket costs and expenses paid or incurred by the Lender Group
to correct any default or enforce any provision of the Loan Documents, or during
the continuance of an Event of Default, in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) reasonable out-of-pocket audit fees and
expenses (including travel, meals, and lodging) of Agent related to any
inspections or audits to the extent of the fees and charges (and up to the
amount of any limitation) contained in the Agreement or the Fee Letter,
(g) reasonable out-of-pocket costs and expenses of third party claims or any
other suit paid or incurred by the Lender Group in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with Parent or any of its
Subsidiaries (excluding any claims or suits solely among Agent and the Lenders),
(h) Agent’s reasonable costs and expenses (including reasonable attorneys fees)
incurred in advising, structuring, drafting, reviewing, administering (including
travel, meals, and lodging) or amending the Loan Documents, and (i) Agent’s and
each Lender’s reasonable costs and expenses (including reasonable attorneys,
accountants, consultants, and other advisors fees and expenses) incurred in
terminating, enforcing (including attorneys, accountants, consultants, and other
advisors fees and expenses incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning Parent or any of its
Subsidiaries or in exercising rights or remedies under the Loan Documents), or
defending the Loan Documents, irrespective of whether suit is brought, or in
taking any Remedial Action concerning the Collateral.
               “Lender-Related Person” means, with respect to any Lender, such
Lender, together with such Lender’s Affiliates, officers, directors, employees,
attorneys, and agents.
               “Letter of Credit” means an L/C or an L/C Undertaking, as the
context requires.
               “Letter of Credit Collateralization” means either (a) providing
cash collateral (pursuant to documentation reasonably satisfactory to Agent,
including provisions that specify that the Letter of Credit fee and all usage
charges set forth in the Agreement will continue to accrue while the Letters of
Credit are outstanding) to be held by Agent for the benefit of those Lenders
with a Revolver Commitment in an amount equal to 105% of the then existing
Letter of Credit Usage, (b) causing the Letters of Credit to be returned to the
Issuing Lender, or (c) providing Agent with a standby letter of credit, in form
and substance reasonably satisfactory to Agent, from a commercial bank
acceptable to Agent (in its sole discretion) in an amount equal to 105% of the
then existing Letter of Credit Usage (it being understood that the Letter of
Credit fee and all usage charges set forth in the Agreement will continue to
accrue while the Letters of Credit are outstanding and that any such fees that
accrue must be an amount that can be drawn under any such standby letter of
credit).
               “Letter of Credit Usage” means, as of any date of determination,
the aggregate undrawn amount of all outstanding Letters of Credit.

Schedule 1.1-14

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               “LIBOR Deadline” has the meaning specified therefor in
Section 2.12(b)(i) of the Agreement.
               “LIBOR Notice” means a written notice in the form of Exhibit L-1.
               “LIBOR Option” has the meaning specified therefor in
Section 2.12(a) of the Agreement.
               “LIBOR Rate” means, for each Interest Period for each LIBOR Rate
Loan, the rate per annum determined by Agent by dividing (a) the Base LIBOR Rate
for such Interest Period, by (b) 100% minus the Reserve Percentage. The LIBOR
Rate shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.
               “LIBOR Rate Loan” means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
               “LIBOR Rate Margin” means, as of any date of determination (with
respect to any portion of the outstanding Advances on such date that is a LIBOR
Rate Loan), the applicable margin set forth in the following table that
corresponds to the most recent Average Excess Availability calculation performed
by Agent (the “Average Excess Availability Calculation”); provided, however,
that (a) for the period from the Closing Date through the date Agent performs
the Average Excess Availability Calculation in respect of the testing period
ending September 30, 2009, the LIBOR Rate Margin shall be at the margin in the
row styled “Level II”, and (b) at any time that a Default or an Event of Default
shall have occurred and be continuing, the LIBOR Rate Margin shall be at the
margin in the row styled “Level I”:

              Average Excess Availability     Level   Calculation   LIBOR Rate
Margin
I
  If the Average Excess Availability is less than or equal to $20,000,000  
4.00 percentage points  
II
  If the Average Excess Availability is greater than $20,000,000  
3.75 percentage points

               Except as set forth in the foregoing proviso, the LIBOR Rate
Margin shall be based upon the most recent determination by Agent of the Average
Excess Availability Calculation, which will be calculated as of the end of each
fiscal quarter. Except as set forth in the foregoing proviso, the LIBOR Rate
Margin shall be re-determined quarterly on the first day of the month following
the date of delivery by Parent and its Subsidiaries to Agent of the report
described in clause (i) of Schedule 5.2 of the Agreement; provided, however,
that if Parent and its Subsidiaries fail to provide such report when such report
is due, the LIBOR Rate Margin shall be set at the margin in the row styled
“Level I” as of the first day of the month following the date on which such
report was required to be delivered until the date on which such report is
delivered (on which date (but not retroactively), without constituting a waiver
of any Default or Event of Default occasioned by the failure to timely deliver
such report, the LIBOR Rate Margin shall be set at the margin based upon the
Average Excess Availability Calculation determined by Agent based upon the
information contained in such report. In the event that the information used by
Agent to perform the Average Excess Availability Calculation contained in any
such report is shown to be inaccurate, and such inaccuracy, if corrected, would
have led to the application of a higher LIBOR Rate Margin for any period (a
“LIBOR Rate Period”) than the LIBOR Rate Margin actually applied for such LIBOR
Rate Period, then (i) Administrative Borrower shall immediately deliver to Agent
a correct report for such LIBOR Rate Period, (ii) the LIBOR Rate Margin shall be
determined as if the correct LIBOR Rate Margin (as set forth in the table above)
were applicable for such LIBOR Rate Period, and (iii) Administrative Borrower
shall immediately deliver to Agent full payment in

Schedule 1.1-15

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respect of the accrued additional interest and letter of credit fees as a result
of such increased LIBOR Rate Margin for such LIBOR Rate Period, which payment
shall be promptly applied by Agent to the affected Obligations.
               “Lien” means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory
or other), security interest, or other security arrangement and any other
preference, priority, or preferential arrangement of any kind or nature
whatsoever, including any conditional sale contract or other title retention
agreement, 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.
               “Loan Account” has the meaning specified therefor in Section 2.9
of the Agreement.
               “Loan Documents” means the Agreement, the Bank Product
Agreements, any Borrowing Base Certificate, the Contribution Agreement, the
Control Agreements, the Controlled Account Agreements, the Copyright Security
Agreements, the Fee Letter, the Guaranties, the Intercompany Subordination
Agreement, the Letters of Credit, any Mortgages, the Patent Security Agreements,
the Security Agreement, the Trademark Security Agreements, any note or notes
executed by Borrower in connection with the Agreement and payable to any member
of the Lender Group, any letter of credit application entered into by a Borrower
in connection with the Agreement, and any other agreement entered into, now or
in the future, by Parent or any of its Subsidiaries and any member of the Lender
Group in connection with the Agreement.
               “Loan Party” means any Borrower or any Guarantor.
               “Margin Stock” as defined in Regulation U of the Board of
Governors of the Federal Reserve System as in effect from time to time.
               “Material Adverse Change” means (a) a material adverse change in
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of Borrowers, taken as a whole, or Parent
and its Subsidiaries, taken as a whole, (b) a material impairment of Parent’s or
any of its Subsidiaries’ ability to perform its obligations under the Loan
Documents to which it is a party or of the Lender Group’s ability to enforce the
Obligations or realize upon any of the Collateral, or (c) a material impairment
of the enforceability or priority of the Agent’s Liens with respect to any of
the Collateral as a result of an action or failure to act on the part of Parent
or any of its Subsidiaries.
               “Material Contract” means, with respect to any Person, (a) each
contract or agreement to which such Person or any of its Subsidiaries is a party
involving aggregate consideration payable to or by such Person or such
Subsidiary of $1,000,000 or more in any fiscal year (other than purchase orders
and sales contracts in the ordinary course of the business of such Person or
such Subsidiary and other than contracts that by their terms may be terminated
by such Person or Subsidiary in the ordinary course of its business upon less
than 60 days’ notice without penalty or premium) and (b) all other contracts or
agreements material to the business, operations, condition (financial or
otherwise), performance, prospects or properties of such Person or such
Subsidiary, including, without limitation, contracts or agreements with the
Equity Sponsor or its Affiliates (including, without limitation, the
Transcription Services Agreement).
               “Maturity Date” has the meaning specified therefor in Section 3.3
of the Agreement.
               “Maximum Revolver Amount” means (a) prior to the Increase
Effective Date, $25,000,000, and (b) thereafter, $25,000,000 plus the Commitment
Increase, in the case of each of clauses (a) and (b), decreased by the amount of
reductions in the Revolver Commitments made in accordance with Section 2.4(c) of
the Agreement.
               “Moody’s” has the meaning specified therefor in the definition of
Cash Equivalents.

Schedule 1.1-16

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               “Mortgage Policy” has the meaning specified therefor in
Schedule 3.1(v).
               “Mortgages” means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by
Parent or its Subsidiaries in favor of Agent, in form and substance reasonably
satisfactory to Agent, that encumber any Real Property Collateral.
               “Net Cash Proceeds” means:
                    (a) with respect to any sale or disposition by Parent or any
of its Subsidiaries of assets, the amount of cash proceeds received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment of deferred consideration) by or on behalf of Parent or its
Subsidiaries, in connection therewith after deducting therefrom only (i) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (A) Indebtedness owing to Agent or any Lender under the Agreement or the
other Loan Documents and (B) Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such sale or
disposition, (ii) reasonable fees, commissions, and expenses related thereto and
required to be paid by Parent or such Subsidiary in connection with such sale or
disposition and (iii) taxes paid or payable to any taxing authorities by Parent
or such Subsidiary in connection with such sale or disposition, in each case to
the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid or payable to a Person that is not
an Affiliate of Parent or any of its Subsidiaries, and are properly attributable
to such transaction; and
                    (b) with respect to the issuance or incurrence of any
Indebtedness by Parent or any of its Subsidiaries, or the issuance by Parent or
any of its Subsidiaries of any shares of its Stock, the aggregate amount of cash
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of Parent or such Subsidiary in connection with such issuance or
incurrence, after deducting therefrom only (i) reasonable fees, commissions, and
expenses related thereto and required to be paid by Parent or such Subsidiary in
connection with such issuance or incurrence, (ii) taxes paid or payable to any
taxing authorities by Parent or such Subsidiary in connection with such issuance
or incurrence, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, actually paid or
payable to a Person that is not an Affiliate of Parent or any of its
Subsidiaries, and are properly attributable to such transaction.
               “Net Interest Expense” means, for any period, the result of
(a) the aggregate of the interest expense of Parent and its Subsidiaries for
such period minus (b) the aggregate of the interest income of Parent and its
Subsidiaries for such period, in each case, determined on a consolidated basis
in accordance with GAAP.
               “Obligations” means (a) all loans, Advances, debts, principal,
interest (including any interest that accrues after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), contingent reimbursement or
indemnification obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to the Loan Account
pursuant to the Agreement), obligations (including indemnification obligations),
fees (including the fees provided for in the Fee Letter), Lender Group Expenses
(including any fees or expenses that accrue after the commencement of an
Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), guaranties, covenants, and
duties of any kind and description owing by Borrowers to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all other expenses or other amounts that Borrowers are
required to pay or reimburse by the Loan Documents or by law or otherwise in
connection with the Loan Documents, and (b) all Bank Product Obligations. Any
reference in the Agreement or in the Loan Documents to the Obligations shall
include all or any portion thereof and any extensions, modifications, renewals,
or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

Schedule 1.1-17

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               “OFAC” means The Office of Foreign Assets Control of the U.S.
Department of the Treasury.
               “Originating Lender” has the meaning specified therefor in
Section 13.1(e) of the Agreement.
               “Other Taxes” shall mean any and all present or future stamp,
value added or documentary taxes or any other excise or property taxes, charges
or similar levies (including interest, fines, penalties and additions to tax)
arising from any payment made under any Loan Document or from the execution,
delivery, performance, enforcement, recordation or filing of, or otherwise with
respect to, any Loan Document.
               “Overadvance” has the meaning specified therefor in Section 2.5
of the Agreement.
               “Parent” has the meaning specified therefor in the preamble to
the Agreement.
               “Participant” has the meaning specified therefor in
Section 13.1(e) of the Agreement.
               “Participant Register” has the meaning set forth in
Section 13.1(i) of the Agreement.
               “Patent Security Agreement” has the meaning specified therefor in
the Security Agreement.
               “Patriot Act” has the meaning specified therefor in Section 4.18
of the Agreement.
               “Payoff Date” means the first date on which all of the
Obligations are paid in full and the Commitments of the Lenders are terminated.
               “Permitted Acquisition” means any Acquisition as to which each of
the following is applicable:
               (a) no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the proposed Acquisition and
the proposed Acquisition is consensual,
               (b) no Indebtedness will be incurred, assumed, or would exist
with respect to Parent or its Subsidiaries as a result of such Acquisition,
other than Indebtedness permitted under clause (l) of the definition of
Permitted Indebtedness and no Liens will be incurred, assumed, or would exist
with respect to the assets of Parent or its Subsidiaries as a result or such
Acquisition other than Liens permitted under clause (r) of the definition of
Permitted Liens,
               (c) Parent has provided Agent with forecasted balance sheets,
profit and loss statements, and cash flow statements of the Person to be
acquired (or related to the assets to be acquired), all prepared on a basis
consistent with such Person’s historical financial statements (or the historical
financial statements related to such assets), together with appropriate
supporting details and a statement of underlying assumptions for the 3 year
period following the date of the proposed Acquisition (on a year by year basis,
and for the 1 year period following the date of the proposed Acquisition, on a
month by month basis), in each case, reasonably satisfactory to Agent,
               (d) Parent has provided Agent with written confirmation,
supported by reasonably detailed calculations, that on a pro forma basis,
created by adding the historical combined financial statements of Parent
(including the combined financial statements of any other Person or assets that
were the subject of a prior Permitted Acquisition during the relevant period) to
the historical consolidated financial statements of the Person to be acquired
(or the historical financial statements related to the assets to be acquired)
pursuant to the proposed Acquisition (adjusted to eliminate expense items that
would not have been incurred and to include income items that would have been
recognized, in each case, if the combination had been accomplished at the
beginning of the relevant period; such eliminations and inclusions to be
mutually and reasonably agreed upon by Parent and Agent), Parent and its
Subsidiaries, are projected to be in compliance with the financial

Schedule 1.1-18

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covenants in Section 7 for the 12 month period ended one year after the proposed
date of consummation of such proposed Acquisition, together with copies of all
such historical financial statements of the Person or assets being acquired for
the 12 month period ended immediately prior to the proposed date of consummation
of such proposed Acquisition,
               (e) Parent has provided Agent with written notice of the proposed
Acquisition at least 14 days prior to the anticipated closing date of the
proposed Acquisition and, not later than 3 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and other material documents relative to the proposed Acquisition,
which agreement and documents must be reasonably acceptable to Agent,
               (f) the assets being acquired (other than a de minimis amount of
assets in relation to Parent and its Subsidiaries’ total assets), or the Person
whose Stock is being acquired, are useful in or engaged in, as applicable, the
business of Parent and its Subsidiaries or a business reasonably related
thereto,
               (g) the subject assets or Stock, as applicable, are being
acquired directly by a Loan Party, and (i) in the case of an Asset Acquisition,
such Loan Party shall have executed and delivered or authorized, as applicable,
any and all documentation reasonably requested by Agent in order to provide
Agent with a first priority perfected security interest, subject to Permitted
Liens, in the acquired assets, and (ii) in the case of a Stock Acquisition,
(A) the Person whose Stock is being acquired shall have executed and delivered
any and all documentation reasonably requested by Agent in order to become a
Guarantor, (B) the Person whose Stock is being acquired shall have executed and
delivered any and all documentation reasonably requested by Agent in order to
provide Agent with a first priority perfected security interest, subject to
Permitted Liens, in the assets of such Person, and (C) the owner of the Stock
subject to such Stock Acquisition shall have executed and delivered any and all
documentation reasonably requested by Agent in order to provide Agent with a
first priority perfected security interest in such Stock,
               (h) Borrowers shall have Excess Availability of not less than
$10,000,000 plus Qualified Cash of not less than $10,000,000, in each case, both
for the 1 day period before, and, on a pro forma basis, for the 1 day period
after giving effect to, the consummation of the proposed Acquisition,
               (i) the assets being acquired (other than a de minimis amount of
assets in relation to the assets being acquired) are located within the United
States or any other jurisdiction approved by Agent, or the Person whose Stock is
being acquired is organized in a jurisdiction located within the United States
or any other jurisdiction approved by Agent, and
               (j) the purchase consideration payable in respect of all
Permitted Acquisitions in the aggregate (including the proposed Acquisition and
including deferred payment obligations) shall not exceed $30,000,000.
               “Permitted Discretion” means a determination made in the exercise
of reasonable (from the perspective of a secured lender) business judgment.
               “Permitted Dispositions” means:
               (a) sales, abandonment, or other dispositions of Equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
               (b) sales of Inventory to buyers in the ordinary course of
business,
               (c) the use or transfer of money or Cash Equivalents in a manner
that is not prohibited by the terms of the Agreement or the other Loan
Documents,

Schedule 1.1-19

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               (d) the licensing, on a non-exclusive basis, of patents,
trademarks, copyrights, and other intellectual property rights in the ordinary
course of business,
               (e) the granting of Permitted Liens,
               (f) the sale or discount, in each case without recourse, of
Accounts arising in the ordinary course of business, but only in connection with
the compromise or collection thereof,
               (g) any involuntary loss, damage or destruction of property,
               (h) any involuntary condemnation, seizure or taking, by exercise
of the power of eminent domain or otherwise, or confiscation or requisition of
use of property,
               (i) the leasing or subleasing of assets of Parent or its
Subsidiaries in the ordinary course of business,
               (j) the sale or issuance of Stock (other than Prohibited
Preferred Stock) of Parent,
               (k) [Reserved],
               (l) the lapse of registered patents, trademarks and other
intellectual property of Parent and its Subsidiaries to the extent not
economically desirable in the conduct of their business and so long as such
lapse is not materially adverse to the interests of the Lenders,
               (m) dispositions of assets (other than Accounts, intellectual
property, licenses, Stock of Subsidiaries of Parent, or Material Contracts) not
otherwise permitted in clauses (a) through (l) above so long as made at fair
market value and the aggregate fair market value of all assets disposed of in
all such dispositions in any calendar year (including the proposed disposition)
would not exceed $250,000, and
               (n) dispositions of assets (other than Accounts, intellectual
property, licenses, Stock of Subsidiaries of Parent, or Material Contracts) not
otherwise permitted in clauses (a) through (m) above so long as (i) no Default
or Event of Default shall have occurred and be continuing or would otherwise
result from the consummation of the proposed disposition, (ii) Borrowers shall
have Excess Availability of at least $20,000,000, in each case, both for the
1 day period before, and, on a pro forma basis, for the 1 day period after
giving effect to, the consummation of the proposed disposition, (iii) the
proposed disposition is made at fair market value, and (iv) the aggregate fair
market value of all assets disposed of in all such dispositions (including the
proposed disposition) would not exceed $2,500,000 during the term of the
Agreement.
               “Permitted Indebtedness” means:
               (a) Indebtedness evidenced by the Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with respect to
Underlying Letters of Credit,
               (b) Indebtedness set forth on Schedule 4.19 and any Refinancing
Indebtedness in respect of such Indebtedness,
               (c) Permitted Purchase Money Indebtedness and any Refinancing
Indebtedness in respect of such Indebtedness,
               (d) endorsement of instruments or other payment items for
deposit,
               (e) Indebtedness consisting of (i) unsecured guarantees incurred
in the ordinary course of business with respect to surety and appeal bonds,
performance bonds, bid bonds, appeal bonds, completion

Schedule 1.1-20

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guarantee and similar obligations; (ii) unsecured guarantees arising with
respect to customary indemnification obligations to purchasers in connection
with Permitted Dispositions; and (iii) unsecured guarantees with respect to
Indebtedness of Parent or one of its Subsidiaries, to the extent that the Person
that is obligated under such guaranty could have incurred such underlying
Indebtedness,
               (f) Indebtedness incurred in the ordinary course of business
under performance, surety, statutory, and appeal bonds,
               (g) Indebtedness owed to any Person providing property, casualty,
liability, or other insurance to Parent or any of its Subsidiaries, so long as
the amount of such Indebtedness is not in excess of the amount of the unpaid
cost of, and shall be incurred only to defer the cost of, such insurance for the
year in which such Indebtedness is incurred and such Indebtedness is outstanding
only during such year,
               (h) the incurrence by Parent or its Subsidiaries of Indebtedness
under Hedge Agreements that are incurred for the bona fide purpose of hedging
the interest rate or foreign currency risk associated with Parent’s and its
Subsidiaries’ operations and not for speculative purposes,
               (i) unsecured Indebtedness incurred in respect of netting
services, overdraft protection, and other like services, in each case, incurred
in the ordinary course of business,
               (j) unsecured Indebtedness of Parent owing to former employees,
officers, or directors (or any spouses, ex-spouses, or estates of any of the
foregoing) incurred in connection with the repurchase by Parent of the Stock of
Parent that has been issued to such Persons, so long as (i) no Default or Event
of Default has occurred and is continuing or would result from the incurrence of
such Indebtedness, (ii) the aggregate amount of all such Indebtedness
outstanding at any one time does not exceed $500,000, and (iii) such
Indebtedness is subordinated to the Obligations on terms and conditions
reasonably acceptable to Agent,
               (k) Indebtedness composing Permitted Investments,
               (l) Acquired Indebtedness in an aggregate amount for all
Permitted Acquisitions not to exceed $7,500,000,
               (m) contingent liabilities in respect of any indemnification
obligation, adjustment of purchase price, non-compete, or similar obligation of
Parent or the applicable Loan Party incurred in connection with the consummation
of one or more Permitted Acquisitions, and
               (n) Subordinated Indebtedness.
               “Permitted Intercompany Advances” means (a) loans made by (i) a
Loan Party to another Loan Party other than Parent, (ii) a non-Loan Party to
another non-Loan Party (other than a Specified Subsidiary), (iii) a non-Loan
Party to a Loan Party, so long as the parties thereto are party to the
Intercompany Subordination Agreement, and (iv) a Loan Party to a non-Loan Party
so long as (A) the amount of such loans does not exceed $1,000,000 outstanding
at any one time, (B) no Default or Event of Default has occurred and is
continuing or would result therefrom, and (C) Borrowers have Excess Availability
of not less than $10,000,000 both for the 1 day period before and the 1 day
period after giving effect to each such loan, and (b) those recurring ordinary
course transactions of Borrowers as further described on Schedule P-1.
               “Permitted Investments” means:
               (a) Investments in cash and Cash Equivalents,
               (b) Investments in negotiable instruments deposited or to be
deposited for collection in the ordinary course of business,

Schedule 1.1-21

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               (c) advances made in connection with purchases of goods or
services in the ordinary course of business,
               (d) Investments received in settlement of amounts due to any Loan
Party or any of its Subsidiaries effected in the ordinary course of business or
owing to any Loan Party or any of its Subsidiaries as a result of Insolvency
Proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of a Loan Party or its Subsidiaries,
               (e) Investments owned by any Loan Party or any of its
Subsidiaries on the Closing Date and set forth on Schedule P-2,
               (f) guarantees permitted under the definition of Permitted
Indebtedness,
               (g) Permitted Intercompany Advances,
               (h) Stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due or owing to a Loan
Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise
outside the ordinary course of business) or as security for any such
Indebtedness or claims,
               (i) deposits of cash made in the ordinary course of business to
secure performance of operating leases,
               (j) non-cash loans to employees, officers, and directors of
Parent or any of its Subsidiaries for the purpose of purchasing Stock in Parent
so long as the proceeds of such loans are used in their entirety to purchase
such stock in Parent,
               (k) Permitted Acquisitions,
               (l) Permitted Unrestricted Acquisitions,
               (m) [Reserved], and
               (n) any other Investment not otherwise permitted by the foregoing
clauses (a) through (m) so long as (i) if during the 1 day period immediately
prior to such Investment and immediately after giving effect to such Investment,
the Revolver Usage is zero, (A) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (B) during the 1 day
period immediately prior to the making of such Investment, Borrowers have, and
immediately after the making of such Investment, the Borrowers are projected to
have, Excess Availability of at least $20,000,000, (C) no portion of the
Advances are used to make such Investment, and (D) Parent has provided Agent
with written notice containing (1) notice of its intent to make such Investment
pursuant to this clause (n)(i), (2) the amount of such proposed Investment,
(3) certification that each of the conditions contained in clauses (A) through
(C) above will be satisfied both before and after giving effect to such proposed
Investment and (4) a confirmation, supported by reasonably detailed
calculations, that on a pro forma basis, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the
12 month period ended one year after the proposed date of such Investment and
(ii) if during the 1 day period immediately prior to such Investment or
immediately after giving effect to such Investment, the Revolver Usage is
greater than zero, (A) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (B) during the 1 day period immediately
prior to the making of such Investment, the Borrowers have, and immediately
after the making of such Investment, Borrowers are projected to have, Excess
Availability of at least $15,000,000, (C) Parent has provided Agent with written
notice containing (1) notice of its intent to make such Investment pursuant to
this clause (n)(ii), (2) the amount of such proposed Investment,
(3) certification that each of the conditions contained in clauses (A) and
(B) above will be satisfied both before and after giving effect to such proposed
Investment and (4) a

Schedule 1.1-22

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confirmation, supported by reasonably detailed calculations, that on a pro forma
basis, Parent and its Subsidiaries are projected to be in compliance with the
financial covenants in Section 7 for the 12 month period ended one year after
the proposed date of such Investment and (D) the aggregate amount of all such
Investments made pursuant to this clause (n)(ii), together with the aggregate
amount of all distributions made pursuant to Section 6.9(c)(ii), shall not
exceed $4,500,000 in any 12 consecutive month period.
               “Permitted Liens” means
               (a) Liens held by Agent to secure the Obligations,
               (b) Liens for unpaid taxes, assessments, or other governmental
charges or levies that either (i) are not yet delinquent, or (ii) do not have
priority over Agent’s Liens and the underlying taxes, assessments, or charges or
levies are the subject of Permitted Protests,
               (c) judgment Liens arising solely as a result of the existence of
judgments, orders, or awards that do not constitute an Event of Default under
Section 8.3 of the Agreement,
               (d) Liens set forth on Schedule P-3, provided that any such Lien
only secures the Indebtedness that it secures on the Closing Date and any
Refinancing Indebtedness in respect thereof,
               (e) the interests of lessors under operating leases and
non-exclusive licensors under license agreements,
               (f) purchase money Liens or the interests of lessors under
Capital Leases to the extent that such Liens or interests secure Permitted
Purchase Money Indebtedness and so long as (i) such Lien attaches only to the
asset purchased or acquired and the proceeds thereof, and (ii) such Lien only
secures the Indebtedness that was incurred to acquire the asset purchased or
acquired or any Refinancing Indebtedness in respect thereof,
               (g) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests,
               (h) Liens on amounts deposited in connection with obtaining
worker’s compensation or other unemployment insurance,
               (i) Liens on amounts deposited in connection with the making or
entering into of bids, tenders, or leases in the ordinary course of business and
not in connection with the borrowing of money,
               (j) Liens on amounts deposited as security for surety or appeal
bonds in connection with obtaining such bonds in the ordinary course of
business,
               (k) with respect to any Real Property, easements, rights of way,
and zoning restrictions that do not materially interfere with or impair the use
or operation thereof,
               (l) non-exclusive licenses of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,
               (m) Liens that are replacements of Permitted Liens to the extent
that the original Indebtedness is the subject of permitted Refinancing
Indebtedness and so long as the replacement Liens only encumber those assets
that secured the original Indebtedness,

Schedule 1.1-23

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               (n) rights of setoff or bankers’ liens upon deposits of cash in
favor of banks or other depository institutions, solely to the extent incurred
in connection with the maintenance of such deposit accounts in the ordinary
course of business,
               (o) Liens granted in the ordinary course of business on the
unearned portion of insurance premiums securing the financing of insurance
premiums to the extent the financing is permitted under the definition of
Permitted Indebtedness,
               (p) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods,
               (q) Liens solely on any cash earnest money deposits made by
Parent or any of its Subsidiaries in connection with any letter of intent or
purchase agreement with respect to a Permitted Acquisition, and
               (r) Liens assumed by Parent or any of its Subsidiaries in
connection with a Permitted Acquisition that secure Acquired Indebtedness.
               “Permitted Preferred Stock” means and refers to any Preferred
Stock issued by Parent (and not by one or more of its Subsidiaries) that is not
Prohibited Preferred Stock.
               “Permitted Protest” means the right of Parent or any of its
Subsidiaries to protest any Lien (other than any Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject of a
United States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on Parent’s or its Subsidiaries’
books and records in such amount as is required under GAAP, (b) any such protest
is instituted promptly and prosecuted diligently by Parent or its Subsidiary, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of the Agent’s Liens.
               “Permitted Purchase Money Indebtedness” means, as of any date of
determination, Purchase Money Indebtedness incurred after the Closing Date in an
aggregate principal amount outstanding at any one time not in excess of
$1,000,000.
               “Permitted Unrestricted Acquisition” means any Stock Acquisition
as to which each of the following is applicable:
               (a) no Default or Event of Default shall have occurred and be
continuing or would result from the consummation of the proposed Stock
Acquisition and the proposed Stock Acquisition is consensual,
               (b) no Indebtedness will be incurred, assumed, or would exist
with respect to Parent or its Subsidiaries as a result of such Stock
Acquisition, and no Liens will be incurred, assumed, or would exist with respect
to the assets of Parent or its Subsidiaries as a result or such Stock
Acquisition,
               (c) Parent has provided Agent with forecasted balance sheets,
profit and loss statements, and cash flow statements of the Person to be
acquired, all prepared on a basis consistent with such Person’s historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the 3 year period following the date of
the proposed Stock Acquisition (on a year by year basis, and for the 1 year
period following the date of the proposed Stock Acquisition, on a month by month
basis), in each case, reasonably satisfactory to Agent,
               (d) Parent has provided Agent with written notice of the proposed
Stock Acquisition at least 14 days prior to the anticipated closing date of the
proposed Stock Acquisition and, not later than 3 Business Days prior to the
anticipated closing date of the proposed Acquisition, copies of the acquisition

Schedule 1.1-24

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agreement and other material documents relative to the proposed Stock
Acquisition, which agreement and documents must be reasonably acceptable to
Agent,
               (e) the Person whose Stock is being acquired is engaged in the
business of Parent and its Subsidiaries or a business reasonably related
thereto,
               (f) the consideration payable by Parent or its Subsidiaries in
respect of the proposed Stock Acquisition shall be composed solely of common
Stock or Permitted Preferred Stock of Parent and/or proceeds of contributions to
capital or the purchase of common Stock or Permitted Preferred Stock of Parent
contemporaneously made by the holders of such common Stock or Permitted
Preferred Stock,
               (g) Borrowers shall have Excess Availability of not less than
$20,000,000 both for the 1 day period before, and, on a pro forma basis, after
giving effect to the consummation of the proposed Stock Acquisition,
               (h) during the 1 day period immediately prior to such proposed
Stock Acquisition and immediately after giving affect to such proposed Stock
Acquisition, the Revolver Usage is zero,
               (i) no portion of the Advances are used to make such Stock
Acquisition,
               (j) (i) the Person whose Stock is being acquired shall not be
owned by any Loan Party (or Subsidiary of a Loan Party) other than Parent, and
(ii) Parent shall have designated such Person as a Specified Subsidiary in
accordance with Section 1.5(b) of the Agreement,
               (k) for the 12 consecutive month period immediately prior to the
proposed Stock Acquisition, such Person has not had revenues in excess of
$125,000,000,
               (l) for the 12 consecutive month period immediately prior to the
proposed Stock Acquisition, such Person has, and during the 6 consecutive month
period immediately after the proposed Stock Acquisition, such Person is
projected to have, Permitted Unrestricted Acquisition EBITDA in excess of $1.00,
and
               (m) the purchase consideration payable in respect of all
Permitted Unrestricted Acquisitions (including the proposed Permitted
Unrestricted Acquisition and including deferred payment obligations) shall not
exceed $100,000,000, except to the extent that the Person whose Stock is being
acquired shall otherwise be acceptable to Agent, as evidenced by a duly executed
written agreement between Agent and Borrowers.
               “Permitted Unrestricted Acquisition EBITDA” means, with respect
to any fiscal period, such Person’s consolidated net earnings (or loss), minus
extraordinary gains, interest income, plus non-cash extraordinary losses,
interest expense, income taxes, and depreciation and amortization for such
period, in each case, determined on a consolidated basis in accordance with GAAP
(except for the exclusion of the net earnings (or less) of Specified
Subsidiaries).
               “Person” means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
               “Preferred Stock” means, as applied to the Stock of any Person,
the Stock of any class or classes (however designated) that is preferred with
respect to the payment of dividends, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
shares of Stock of any other class of such Person.

Schedule 1.1-25

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               “Prohibited Preferred Stock” means any Preferred Stock that by
its terms is mandatorily redeemable or subject to any other payment obligation
(including any obligation to pay dividends, other than dividends of shares of
Preferred Stock of the same class and series payable in kind or dividends of
shares of common stock) on or before a date that is less than 1 year after the
Maturity Date, or, on or before the date that is less than 1 year after the
Maturity Date, is redeemable at the option of the holder thereof for cash or
assets or securities (other than distributions in kind of shares of Preferred
Stock of the same class and series or of shares of common stock).
               “Projections” means Parent’s forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with Parent’s historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
               “Pro Rata Share” means, as of any date of determination:
               (a) with respect to a Lender’s obligation to make Advances and
right to receive payments of principal, interest, fees, costs, and expenses with
respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender’s Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or
reduced to zero, the percentage obtained by dividing (y) the outstanding
principal amount of such Lender’s Advances by (z) the outstanding principal
amount of all Advances,
               (b) with respect to a Lender’s obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and right to receive
payments of fees with respect thereto, (i) prior to the Revolver Commitments
being terminated or reduced to zero, the percentage obtained by dividing (y)
such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of
all Lenders, and (ii) from and after the time that the Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
outstanding principal amount of such Lender’s Advances by (z) the outstanding
principal amount of all Advances; provided, however, that if all of the Advances
have been repaid in full and Letters of Credit remain outstanding, Pro Rata
Share under this clause shall be determined based upon subclause (i) of this
clause as if the Revolver Commitments had not been terminated or reduced to zero
and based upon the Revolver Commitments as they existed immediately prior to
their termination or reduction to zero, and
               (c) with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section 15.7 of the
Agreement), the percentage obtained by dividing (i) such Lender’s Revolver
Commitment, by (ii) the aggregate amount of Revolver Commitments of all Lenders;
provided, however, that in the event the Revolver Commitments have been
terminated or reduced to zero, Pro Rata Share under this clause shall be the
percentage obtained by dividing (A) the outstanding principal amount of such
Lender’s Advances plus such Lender’s ratable portion of the Risk Participation
Liability with respect to outstanding Letters of Credit by (B) the outstanding
principal amount of all Advances plus the aggregate amount of the Risk
Participation Liability with respect to outstanding Letters of Credit.
               “Protective Advances” has the meaning specified therefor in
Section 2.3(d)(i) of the Agreement.
               “Purchase Money Indebtedness” means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations), incurred at the time
of, or within 20 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof.
               “Qualified Cash” means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of Parent and its Subsidiaries
that is in Deposit Accounts or in Securities Accounts, or any combination
thereof, and which such Deposit Account or Securities Account is the subject of
a Control

Schedule 1.1-26

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Agreement and is maintained by a branch office of the bank or securities
intermediary located within the United States.
               “Real Property” means any estates or interests in real property
now owned or hereafter acquired by Parent or its Subsidiaries and the
improvements thereto.
               “Real Property Collateral” means any Real Property hereafter
acquired by Parent or its Subsidiaries.
               “Record” means information that is inscribed on a tangible medium
or that is stored in an electronic or other medium and is retrievable in
perceivable form.
               “Refinancing Indebtedness” means refinancings, renewals, or
extensions of Indebtedness so long as:
               (a) the terms and conditions of such refinancings, renewals, or
extensions do not, in Agent’s reasonable judgment, materially impair the
prospects of repayment of the Obligations by Parent and its Subsidiaries or
materially impair Parent’s and its Subsidiaries’ creditworthiness,
               (b) such refinancings, renewals, or extensions do not result in
an increase in the principal amount of the Indebtedness so refinanced, renewed,
or extended,
               (c) such refinancings, renewals, or extensions do not result in
an increase in the interest rate with respect to the Indebtedness so refinanced,
renewed, or extended,
               (d) such refinancings, renewals, or extensions do not result in a
shortening of the average weighted maturity (measured as of the refinancing,
renewal or extension) of the Indebtedness so refinanced, renewed, or extended,
nor are they on terms or conditions that, taken as a whole, are, materially more
burdensome or restrictive to Parent and its Subsidiaries,
               (e) if the Indebtedness that is refinanced, renewed, or extended
was subordinated in right of payment to the Obligations, then the terms and
conditions of the refinancing, renewal, or extension must include subordination
terms and conditions that are at least as favorable to the Lender Group as those
that were applicable to the refinanced, renewed, or extended Indebtedness, and
               (f) the Indebtedness that is refinanced, renewed, or extended is
not recourse to any Person that is liable on account of the Obligations other
than those Persons which were obligated with respect to the Indebtedness that
was refinanced, renewed, or extended.
               “Related Fund” means, with respect to any Lender that is an
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
               “Register” has the meaning set forth in Section 13.1(h) of the
Agreement.
               “Registered Loan” has the meaning set forth in Section 13.1(h) of
the Agreement.
               “Remedial Action” means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) restore or reclaim natural resources or the
environment, (d) perform any pre-remedial studies, investigations, or
post-remedial

Schedule 1.1-27

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operation and maintenance activities, or (e) conduct any other actions with
respect to Hazardous Materials authorized by Environmental Laws.
               “Replacement Lender” has the meaning specified therefor in
Section 2.13(b) of the Agreement.
               “Report” has the meaning specified therefor in Section 15.16 of
the Agreement.
               “Required Availability” means that the sum of (a) Excess
Availability, plus (b) Qualified Cash exceeds $50,000,000.
               “Required Lenders” means, at any time, Lenders whose aggregate
Pro Rata Shares (calculated under clause (c) of the definition of Pro Rata
Shares) exceed 50%; provided, however, that at any time there are 2 or more
Lenders, “Required Lenders” must include at least 2 Lenders.
               “Reserve Percentage” means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities”) of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
               “Revolver Commitment” means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement.
               “Revolver Usage” means, as of any date of determination, the sum
of (a) the amount of outstanding Advances, plus (b) the amount of the Letter of
Credit Usage.
               “Risk Participation Liability” means, as to each Letter of
Credit, all obligations of Borrowers to the Issuing Lender with respect to such
Letter of Credit, including (a) the contingent reimbursement obligations of
Borrowers with respect to the amounts available to be drawn or which may become
available to be drawn thereunder, (b) the reimbursement obligations of Borrowers
with respect to amounts that have been paid by the Issuing Lender to the
Underlying Issuer, and (c) all accrued and unpaid interest, fees, and expenses
payable with respect thereto.
               “Sanctioned Entity” means (a) a country or a government of a
country, (b) an agency of the government of a country, (c) an organization
directly or indirectly controlled by a country or its government, (d) a Person
resident in or determined to be resident in a country, in each case, that is
subject to a country sanctions program administered and enforced by OFAC.
               “Sanctioned Person” means a person named on the list of Specially
Designated Nationals maintained by OFAC.
               “SEC” means the United States Securities and Exchange Commission
and any successor thereto.
               “Securities Account” means a securities account (as that term is
defined in the Code).

Schedule 1.1-28

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               “Securities Act” means the Securities Act of 1933, as amended
from time to time, and any successor statute.
               “Security Agreement” means a security agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by Borrowers
and Guarantors to Agent.
               “Settlement” has the meaning specified therefor in
Section 2.3(e)(i) of the Agreement.
               “Settlement Date” has the meaning specified therefor in
Section 2.3(e)(i) of the Agreement.
               “Solvent” means, with respect to any Person on a particular date,
that the sum of such Person’s assets, at fair valuations, is greater than all of
such Person’s debts.
               “Specified Subsidiary” means any Subsidiary formed or acquired by
Parent in connection with a Permitted Unrestricted Acquisition that is
designated by the Board of Directors of Parent as a Specified Subsidiary in
accordance with Section 1.5(b) of the Agreement.
               “S&P” has the meaning specified therefor in the definition of
Cash Equivalents.
               “Stock” means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other “equity security” (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
               “Stock Acquisition” means the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
Subsidiaries of all or substantially all of the Stock of any other Person.
               “Subordinated Indebtedness” means unsecured Indebtedness of
Parent or any of its Subsidiaries the terms of which are satisfactory to Agent
and which has been expressly subordinated in right of payment to all
Indebtedness of Parent and its Subsidiaries under the Loan Documents (a) by the
execution and delivery of a subordination agreement, in form and substance
satisfactory to Agent, or (b) otherwise on terms and conditions (including,
without limitation, subordination provisions, payment terms, interest rates,
covenants, remedies, defaults and other material terms) satisfactory to Agent.
               “Subsidiary” of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity; provided, however, that with respect to Parent or any Loan Party, any
reference to “Subsidiary” shall be construed to exclude each Specified
Subsidiary so long as such Person satisfies the criteria set forth in clauses
(i) through (vii) of Section 1.5(b).
               “Swing Lender” means WFF or any other Lender that, at the request
of Administrative Borrower and with the consent of Agent agrees, in such
Lender’s sole discretion, to become the Swing Lender under Section 2.3(b) of the
Agreement.
               “Swing Loan” has the meaning specified therefor in Section 2.3(b)
of the Agreement.
               “Taxes” shall mean, any taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments and all interest, penalties or similar
liabilities with respect thereto; provided that Taxes shall exclude (i) any tax
imposed on the net income or net profits of any Lender or any Participant
(including any branch profits taxes), in each case imposed by the jurisdiction
(or by

Schedule 1.1-29

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any political subdivision or taxing authority thereof) in which such Lender or
such Participant is organized or the jurisdiction (or by any political
subdivision or taxing authority thereof) in which such Lender’s or such
Participant’s principal office is located in each case as a result of a present
or former connection between such Lender or such Participant and the
jurisdiction or taxing authority imposing the tax (other than any such
connection arising solely from such Lender or such Participant having executed,
delivered or performed its obligations or received payment under, or enforced
its rights or remedies under the Agreement or any other Loan Document);
(ii) taxes resulting from a Lender’s or a Participant’s failure to comply with
the requirements of Section 16(c) or (d) of the Agreement, and (iii) any United
States federal withholding taxes that would be imposed on amounts payable to a
Foreign Lender based upon the applicable withholding rate in effect at the time
such Foreign Lender becomes a party to the Agreement (or designates a new
lending office), except that Taxes shall include (A) any amount that such
Foreign Lender (or its assignor, if any) was previously entitled to receive
pursuant to Section 16(a) of the Agreement, if any, with respect to such
withholding tax at the time such Foreign Lender becomes a party to the Agreement
(or designates a new lending office), and (B) additional United States federal
withholding taxes that may be imposed after the time such Foreign Lender becomes
a party to the Agreement (or designates a new lending office), as a result of a
change in law, rule, regulation, order or other decision with respect to any of
the foregoing by any Governmental Authority.
               “Total Commitment” means, with respect to each Lender, its Total
Commitment, and, with respect to all Lenders, their Total Commitments, in each
case as such Dollar amounts are set forth beside such Lender’s name under the
applicable heading on Schedule C-1 attached hereto or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of the Agreement.
               “Trademark Security Agreement” has the meaning specified therefor
in the Security Agreement.
               “Transcription Services Agreement” means that certain
Transcription Services Agreement, dated April 3, 2009, by and between MedQuist
Transcriptions, Ltd. and CBay Systems & Services, Inc.
               “Underlying Issuer” means a third Person which is the beneficiary
of an L/C Undertaking and which has issued a letter of credit at the request of
the Issuing Lender for the benefit of Borrowers.
               “Underlying Letter of Credit” means a letter of credit that has
been issued by an Underlying Issuer.
               “United States” means the United States of America.
               “Voidable Transfer” has the meaning specified therefor in
Section 17.8 of the Agreement.
               “Wells Fargo” means Wells Fargo Bank, National Association, a
national banking association.
               “WFF” means Wells Fargo Foothill, LLC, a Delaware limited
liability company.

Schedule 1.1-30

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Schedule 3.1
               The obligation of each Lender to make its initial extension of
credit provided for in the Agreement is subject to the fulfillment, to the
satisfaction of each Lender (the making of such initial extension of credit by
any Lender being conclusively deemed to be its satisfaction or waiver of the
following), of each of the following conditions precedent:
               (a) the Closing Date shall occur on or before September 2, 2009;
               (b) Agent shall have received a letter duly executed by each
Borrower and each Guarantor authorizing Agent to file appropriate financing
statements in such office or offices as may be necessary or, in the opinion of
Agent, desirable to perfect the security interests to be created by the Loan
Documents;
               (c) Agent shall have received evidence that appropriate financing
statements have been duly filed in such office or offices as may be necessary
or, in the opinion of Agent, desirable to perfect the Agent’s Liens in and to
the Collateral, and Agent shall have received searches reflecting the filing of
all such financing statements, and evidencing the absence of any Liens on the
Collateral, other than Liens acceptable to Agent;
               (d) Agent shall have received each of the following documents, in
form and substance satisfactory to Agent, duly executed, and each such document
shall be in full force and effect:
                    (i) the Contribution Agreement,
                    (ii) the Control Agreements,
                    (iii) the Controlled Account Agreements (other than as set
forth on Schedule 3.3),
                    (iv) the Copyright Security Agreement,
                    (v) a disbursement letter executed and delivered by each
Borrower to Agent regarding the extensions of credit to be made on the Closing
Date, the form and substance of which is satisfactory to Agent,
                    (vi) the Fee Letter,
                    (vii) the Guaranty,
                    (viii) the Intercompany Subordination Agreement,
                    (ix) the Patent Security Agreement,
                    (x) the Security Agreement, together with all certificates
representing the shares of Stock pledged thereunder, as well as stock powers
with respect thereto endorsed in bank,
                    (xi) the Trademark Security Agreement;

Schedule 3.1-1

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               (e) Agent shall have received a certificate from the Secretary of
each Loan Party (i) attesting to the resolutions of such Loan Party’s Board of
Directors authorizing its execution, delivery, and performance of the Agreement
(in the case of Parent and Borrowers) and the other Loan Documents to which such
Loan Party is a party, (ii) authorizing specific officers of such Loan Party to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of such Loan Party;
               (f) Agent shall have received copies of each Loan Party’s
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Loan Party;
               (g) Other than as set forth on Schedule 3.3, Agent shall have
received a certificate of status with respect to each Loan Party, dated within
10 days of the Closing Date, such certificate to be issued by the appropriate
officer of the jurisdiction of organization of such Loan Party, which
certificate shall indicate that such Loan Party is in good standing in such
jurisdiction;
               (h) Agent shall have received certificates of status with respect
to each Loan Party, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Loan Party) in which its failure
to be duly qualified or licensed would constitute a Material Adverse Change,
which certificates shall indicate that such Loan Party is in good standing in
such jurisdictions;
               (i) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 5.6, the form
and substance of which shall be satisfactory to Agent;
               (j) Agent shall have received Collateral Access Agreements with
respect to the following locations:
                    (i) 1000 Bishops Gate Boulevard, Mt. Laurel, New Jersey
08054; and
                    (ii) 5430 Metric Place, Suite 200, Norcross, Georgia 30092;
               (k) Agent shall have received an opinion of each of the following
counsel in form and substance satisfactory to Agent:
                    (i) Robinson & Cole LLP; and
                    (ii) Raymond & Coleman, LLP;
               (l) Agent shall have received a certificate from the Chief
Financial Officer or other responsible officer of each Loan Party certifying as
to (i) the truth and accuracy of the representations and warranties of the Loan
Parties contained in Section 4 of the Agreement, (ii) the absence of any
Defaults or Events of Default, (iii) Borrowers having the Required Availability
after giving effect to the initial extensions of credit under the Agreement and
the payment of all fees and expenses required to be paid by Parent and its
Subsidiaries on the Closing Date under the Agreement or the other Loan Documents
and (iv) the solvency of each Loan Party after giving effect to the incurrence
of Indebtedness under the Agreement;
               (m) the Loan Parties shall have implemented a system of
electronic collateral reporting in order to provide electronic reporting of each
of the items required by Section 5.2 of the Agreement;
               (n) Agent shall have completed to its reasonable satisfaction its
business, legal, and collateral due diligence, including (i) a collateral audit
and review of Parent’s and its Subsidiaries’ books and records and verification
of Parent’s and its Subsidiaries’ representations and warranties to Lender
Group, the results of which shall be satisfactory to Agent, (ii) an inspection
of each of the locations where Parent’s and its Subsidiaries Inventory and
Equipment is located, the results of which shall be satisfactory to Agent,
(iii) a

Schedule 3.1-2

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review of Parent’s and its Subsidiaries Material Contracts, the results of which
shall be reasonably satisfactory to Agent, and (iv) a review of Parent’s
business plan, the results of which shall be reasonably satisfactory to Agent;
               (o) Agent shall have received (i) completed reference checks with
respect to Parent’s and its Subsidiaries’ senior management and (ii) completed
Patriot Act and OFAC searches, in each case, the results of which are
satisfactory to Agent in its sole discretion;
               (p) Agent shall have received a set of Projections of Parent for
the 3-year period following the Closing Date (on a year by year basis, and for
the 1-year period following the Closing Date, on a month by month basis), in
form and substance (including as to scope and underlying assumptions) reasonably
satisfactory to Agent;
               (q) Borrowers shall have paid all Lender Group Expenses incurred
in connection with the transactions evidenced by the Agreement;
               (r) Agent shall have received copies of each Material Contract,
together with a certificate of the Secretary of Administrative Borrower
certifying each such document as being a true, correct, and complete copy
thereof;
               (s) Parent and each of its Subsidiaries shall have received all
licenses, approvals or evidence of other actions required by any Governmental
Authority in connection with the execution and delivery by Parent or its
Subsidiaries of the Loan Documents or with the consummation of the transactions
contemplated thereby;
               (t) Agent shall have performed a full field audit of Parent and
its Subsidiaries, the results of which shall be satisfactory to Agent; and
               (u) all other documents and legal matters in connection with the
transactions contemplated by the Agreement shall have been delivered, executed,
or recorded and shall be in form and substance reasonably satisfactory to Agent.

Schedule 3.1-3

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Schedule 3.3
Conditions Subsequent
     Parent and Borrowers agree that, in addition to all other terms, conditions
and provisions set forth in the Agreement and the other Loan Documents,
including those conditions set forth in Sections 3.1 and 3.2, Parent and
Borrowers shall satisfy each of the following conditions subsequent on or before
the date applicable thereto:
               (a) Within three days after the Closing Date, Agent shall have
received evidence satisfactory to Agent that Loan Parties have closed Investment
Account number 50004150 maintained at JPMorgan Chase Bank, N.A.
               (b) On or prior to September 9, 2009, Agent shall have received a
Controlled Account Agreement with respect to the Loan Parties’ account number
XXXXXX maintained at JPMorgan Chase Bank.
               (c) Within 15 days after the Closing Date, Agent shall have
received a Collateral Access Agreement with respect to the following leased
location: 1395 S. Marietta Parkway, Building 600, Suite 606/608, Marietta,
Georgia 30067;
provided, however, that the Collateral Access Agreement with respect to the
leased location described above shall not be required if Agent is satisfied, in
its Permitted Discretion, that such Collateral Access Agreement will not be
obtained after the Loan Parties have used commercially reasonable efforts to do
so (it being understood and agreed that in the event the Loan Parties are unable
to obtain such Collateral Access Agreement, Agent may, in its Permitted
Discretion, establish such reserves as it deems necessary with respect to such
leased location).
               (d) Within 120 days after the Closing Date, Agent shall have
received a certificate from the Secretary of the State of New York, certifying
that Administrative Borrower is in good standing in the State of New York.

Schedule 3.1-1

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Schedule 5.1
     Deliver to Agent, with copies to each Lender, each of the financial
statements, reports, or other items set forth set forth below at the following
times in form satisfactory to Agent:

     
As soon as available, but in any event within 30 days after the end of each
month (other than any month that is the end of one of Parent’s fiscal quarters)
  (a) an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering Parent’s and its Subsidiaries’
operations during such period and setting forth, in each case, in comparative
form, the figures for the corresponding period of the immediately preceding
fiscal year,
 
   
 
  (b) an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering each Specified Subsidiary’s
operations during such period and setting forth, in each case, in comparative
form, the figures for the corresponding period of the immediately preceding
fiscal year, and
 
   
 
  (c) a Compliance Certificate.
 
   
As soon as available, but in any event within 5 days after the date on which the
financial statements described in clause (a) above are delivered
  (d) as it pertains to the financial statements described in clause (a) above,
a reconciliation to the most recent Projections delivered to Agent for such
period, together with a written explanation of any material variances for such
period.
 
   
As soon as available, but in any event within 45 days after the end of each of
Parent’s fiscal quarters
  (e) an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering Parent’s and its Subsidiaries’
operations during such period and setting forth, in each case, in comparative
form, the figures for the corresponding period of the immediately preceding
fiscal year (it being understood and agreed that the foregoing delivery
requirement shall be deemed satisfied with respect to each of the first three
fiscal quarters of each of Parent’s fiscal years by Parent’s delivery to Agent,
with copies to each Lender, of a copy of its Form 10-O quarterly report for such
period),
 
   
 
  (f) an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering each Specified Subsidiary’s
operations during such period and setting forth, in each case, in comparative
form, the figures for the corresponding period of the immediately preceding
fiscal year, and
 
   
 
  (g) a Compliance Certificate.
 
   
As soon as available, but in any event within 5 days after the date on which the
financial statements described in clause (e) above are delivered
  (h) as it pertains to the financial statements described in clause (e) above,
a reconciliation to the most recent Projections delivered to Agent for such
period, together with a written explanation of any material variances for such
period.

Schedule 5.1-1

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As soon as available, but in any event within 90 days after the end of each of
Parent’s fiscal years
  (i) consolidated and consolidating financial statements of Parent and its
Subsidiaries and Specified Subsidiaries for each such fiscal year, setting
forth, in each case, in comparative form, the figures for the corresponding
period of the immediately preceding fiscal year, which consolidated financial
statements shall be audited by independent certified public accountants
reasonably acceptable to Agent and certified, without any qualifications
(including any (i) “going concern” or like qualification or exception, (ii)
qualification or exception as to the scope of such audit, or (iii) qualification
which relates to the treatment or classification of any item and which, as a
condition to the removal of such qualification, would require an adjustment to
such item, the effect of which would be to cause any noncompliance with the
provisions of Section 7), by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to include a balance
sheet, income statement, and statement of cash flow and, if prepared, such
accountants’ letter to management) (it being understood and agreed that the
foregoing delivery requirement shall be deemed satisfied by Parent’s delivery to
Agent, with copies to each Lender, of a copy of its Form 10-K annual report for
such fiscal year), and
 
   
 
  (j) an unaudited consolidated balance sheet, income statement, and statement
of cash flow covering Parent’s and its Subsidiaries’ operations during such
period and setting forth, in each case, in comparative form, the figures for the
corresponding period of the immediately preceding fiscal year,
 
   
 
  (k) a Compliance Certificate.
 
   
As soon as available, but in any event within 5 days after the date on which the
financial statements described in clause (i) above are delivered
  (l) as it pertains to the financial statements described in clause (i) above,
a reconciliation to the most recent Projections delivered to Agent for such
period, together with a written explanation of any material variances for such
period.
 
   
As soon as available, but in any event within 30 days after the end of each of
Parent’s fiscal years,
  (m) copies of Parent’s Projections, in form and substance (including as to
scope and underlying assumptions) satisfactory to Agent, in its Permitted
Discretion, for the forthcoming 3 years, year by year, and for the forthcoming
fiscal year, month by month, certified by the chief financial officer of Parent
as being such officer’s good faith estimate of the financial performance of
Parent and its Subsidiaries during the period covered thereby.
 
   
If and when filed by Parent or any of its Subsidiaries,
  (n) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K
current reports,
 
   
 
  (o) any other filings made by Parent or any of its Subsidiaries with the SEC,
and
 
   
 
  (p) any other information that is provided by Parent or any of its
Subsidiaries to its shareholders generally.

Schedule 5.1-2

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Promptly, but in any event within 5 days after Parent or any of its Subsidiaries
have knowledge of any event or condition that constitutes a Default or an Event
of Default,
  (q) notice of such event or condition and a statement of the curative action
that such Person proposes to take with respect thereto.
 
   
Promptly after the commencement thereof, but in any event within 5 days after
the service of process with respect thereto on Parent or any of its
Subsidiaries,
  (r) notice of all actions, suits, or proceedings brought by or against Parent
or any of its Subsidiaries before any Governmental Authority which reasonably
could be expected to result in a Material Adverse Change.
 
   
Immediately after receipt or
delivery thereof,
  (s) copies of any notices evidencing the expiration, cancellation or other
termination of any Material Contract.
 
   
Immediately after Parent or any of its Subsidiaries has knowledge of any labor
negotiations which could result in a labor strike,
  (t) notice of the nature and status of such negotiations, together with a
statement of action that the Parent proposes to take with respect thereto.
 
   
Upon the request of Agent,
  (u) any other information reasonably requested relating to the financial
condition of Parent or its Subsidiaries.

Schedule 5.1-3

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Schedule 5.2
     Provide Agent (and if so requested by Agent, with copies for each Lender)
with each of the documents set forth below at the following times in form
satisfactory to Agent and in electronic format where indicated when such
reporting is implemented pursuant to Section 5.2 of the Credit Agreement:

     
Monthly (no later than the 15th day of each month)
  (a) a Borrowing Base Certificate as of the then most recently concluded
calendar month,
 
   
 
  (b) a detailed aging, by total, of Parent’s and its Subsidiaries’ Accounts
together with a reconciliation and supporting documentation for any reconciling
items noted (delivered electronically in an acceptable format, if Borrowers have
implemented electronic reporting),
 
   
 
  (c) a detailed calculation of those Accounts that are not eligible for the
Borrowing Base, if Borrowers have not implemented electronic reporting,
 
   
 
  (d) a summary aging, by vendor, of Parent’s and its Subsidiaries’ accounts
payable and any book overdraft (delivered electronically in an acceptable
format, if Borrowers have implemented electronic reporting) and an aging, by
vendor, of any held checks,
 
   
 
  (e) a detailed report regarding Parent’s and its Subsidiaries’ cash and Cash
Equivalents, including an indication of which amounts constitute (i) Qualified
Cash, (ii) proceeds of Accounts, and (iii) other Collections,
 
   
 
  (f) a monthly Account roll-forward, in a format acceptable to Agent in its
discretion, tied to the beginning and ending account receivable balances of
Parent’s and its Subsidiaries’ general ledger,
 
   
 
  (g) a report regarding Parent’s and its Subsidiaries’ accrued, but unpaid
taxes and royalties, including ad valorem taxes, and
 
   
 
  (h) a detailed report, by customer, showing (i) all deferred revenue and
deferred accommodation liabilities as set forth in Loan Parties’ balance sheets
for the prior month, and (ii) the portion of such deferred revenue and deferred
accommodation liabilities that has previously been paid in cash,
 
   
Monthly (no later than the 30th day of each month)
  (i) a reconciliation of Accounts and trade accounts payable of Parent’s and
its Subsidiaries’ general ledger accounts to its monthly financial statements
including any book reserves related to each category.
 
   
Annually
  (j) a detailed list of Parent’s and its Subsidiaries’ customers, with address
and contact information.
 
   
Upon request by Agent
  (k) copies of purchase orders and invoices for Inventory and Equipment
acquired by Parent or its Subsidiaries,
 
   
 
  (l) a schedule showing unbilled Accounts and/or accrued royalties of Parent
and its Subsidiaries, and
 
   
 
  (l) such other reports as to the Collateral or the financial condition of
Parent and its Subsidiaries, as Agent may reasonably request.

Schedule 5.2-1