Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT, WAIVER AND CONSENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT, WAIVER AND CONSENT (this “Amendment”)
is entered into as of July 11, 2011, by and among CBay Inc., a Delaware
corporation, MedQuist Inc., a New Jersey corporation, MedQuist Transcriptions,
Ltd., a New Jersey corporation (collectively, the “Borrowers”), MedQuist
Holdings Inc., a Delaware corporation (“Holdings”), the other Loan Parties
signatory hereto, the Lenders signatory hereto, and General Electric Capital
Corporation, a Delaware corporation, as Agent for the Lenders (“Agent”).

RECITALS

A. The Borrowers, Holdings, the Lenders signatory thereto from time to time and
Agent are parties to that certain Credit Agreement, dated as of October 1, 2010
(as amended, supplemented, revised, restated, replaced or otherwise modified,
the “Credit Agreement”). Capitalized terms used herein and not otherwise defined
shall having the meanings set forth in the Credit Agreement.

B. The Borrowers have requested that the Lenders amend the Credit Agreement in
certain respects and the Lenders have agreed to amend the Credit Agreement,
subject to the terms and conditions hereof.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and intending to be legally bound, the parties hereto
agree as follows:

A. AMENDMENT

1. Amendment to Section 6.1(a). Section 6.1(a) of the Credit Agreement is
amended by replacing such subsection in its entirety with the following:

(a) Monthly Reports. Within 30 days after the end of each of the first two
months of each Fiscal Quarter and within 45 days after the end of the last month
of each Fiscal Quarter, the internal Consolidated unaudited balance sheet of
each of MedQuist and CBay as of the close of such fiscal month and related
Consolidated statements of income and cash flow for such fiscal month and that
portion of the Fiscal Year ending as of the close of such fiscal month, setting
forth in comparative form the figures for the corresponding period in the prior
Fiscal Year (after the first anniversary of the Closing Date) prepared for
management and consistent with past practice.

2. Amendment to Section 8.1(n). Section 8.1(n) of the Credit Agreement is
amended by replacing such subsection in its entirety with the following:

(n) to the extent constituting Indebtedness (i) any earn-out or similar
obligation of any Group Member incurred in connection with a Permitted
Acquisition and (ii) any Group Member’s deferred cash purchase consideration

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arising in connection with the Project Miami Acquisition (as defined in the
First Amendment to Credit Agreement, Waiver and Consent to this Agreement, dated
as of July 11, 2011) in a principal amount not to exceed $30,000,000;

B. WAIVER AND CONSENT

1. Project Miami Acquisition. Subject to the satisfaction of the conditions
precedent set forth in Section C below, the Agent and the Lenders hereby
(a) agree to waive, solely with respect to the Proposed Acquisition of the
entity previously disclosed to the Agent and on terms and conditions previously
disclosed to the Agent (the “Project Miami Acquisition”), each of the limits on
aggregate amounts payable set forth in clause (a) of the definition of
“Permitted Acquisition” under the Credit Agreement; provided, that (A) with
respect to clause (a)(ii) immediately after the consummation of the Project
Miami Acquisition actual Additional Available Cash shall be reduced to zero and
(B) with respect to clauses (a)(i) and (a)(iii) any amounts payable with respect
to the Project Miami Acquisition shall not reduce the dollar limits with respect
to future Permitted Acquisitions; provided, further that (1) to the extent each
other requirement of the definition of “Permitted Acquisition” under the Credit
Agreement is satisfied with respect to the Project Miami Acquisition, the
Project Miami Acquisition shall be a Permitted Acquisition, (2) the Project
Miami Acquisition shall not be funded with the proceeds of any Loans or with
more than $60,000,000 in cash and Cash Equivalents from the Group Members’
balance sheets and (3) the restructuring and acquisition expenses incurred in
connection with the Project Miami Acquisition that may be added back to
Consolidated EBITDA pursuant to clause (b)(x) of the definition thereof as set
forth in the Credit Agreement shall be capped at $10,000,000.

2. Amendments to Senior Subordinated Note Purchase Agreement. Notwithstanding
Section 8.11 of the Credit Agreement or any provision of the Subordination
Agreement, the Agent and Lenders hereby consent to (a) the Borrowers and other
Loan Parties entering into the Waiver and First Amendment to the Senior
Subordinated Note Purchase Agreement (the “First NPA Amendment”), dated as of
the date hereof, in substantially the form attached hereto as Exhibit A, (b) the
payment of (i) the Amendment Fee and Waiver Fee (each as defined in the First
NPA Amendment) and (ii) the Second Amendment Fee (as defined in the Second
Amendment to Senior Subordinated Note Purchase Agreement (the “Second NPA
Amendment”), dated as of the date hereof, in substantially the form attached
hereto as Exhibit B) and (c) the Agent’s acknowledgement of and consent to the
payment of (i) such Amendment Fee and Waiver Fee under the First NPA Amendment
and (ii) such Second Amendment Fee under the Second NPA Amendment.

C. CONDITIONS TO EFFECTIVENESS

Notwithstanding any other provision of this Amendment and without affecting in
any manner the rights of the Lenders hereunder, it is understood and agreed that
this Amendment shall not become effective, and the Borrowers shall have no
rights under this Amendment, until Agent shall have received:

1. an amendment to the Senior Subordinated Note Purchase Agreement in form and
substance satisfactory to the Agent; and

 

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2. duly executed signature pages to this Amendment from the Required Lenders,
the Borrowers, Holdings, and Agent.

D. REPRESENTATIONS

Each Loan Party hereby represents and warrants to the Lenders and Agent that:

1. The execution, delivery and performance by such Loan Party of this Amendment
(a) are within such Loan Party’s corporate or similar powers and, at the time of
execution hereof, have been duly authorized by all necessary corporate and
similar action, (b) do not (i) contravene such Loan Party’s Constituent
Documents, (ii) violate any applicable material Requirement of Law in any
material respect, (iii) conflict with, contravene, constitute a default or
breach under, or result in or permit the termination or acceleration of, any
material Contractual Obligation of any Group Member (including other Related
Documents or Loan Documents) other than those that would not, in the aggregate,
have a Material Adverse Effect, (iv) do not materially adversely affect any
Permit of such Loan Party other than those that would not, in the aggregate,
have a Material Adverse Effect or (v) result in the imposition of any Lien
(other than a Permitted Lien) upon any property of any Group Member and (c) do
not require any Permit of, or filing with, any Governmental Authority or any
consent of, or notice to, any Person, other than those which, if not obtained or
made, would not reasonably be expected to have a Material Adverse Effect;

2. This Amendment (a) has been duly executed and delivered to the other parties
hereto by each Loan Party party hereto, (b) is the legal, valid and binding
obligation of such Loan Party and (c) is enforceable against such Loan Party in
accordance with its terms, subject to the effect of any applicable bankruptcy,
insolvency, reorganization or moratorium or similar laws affecting the rights or
remedies of creditors generally and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity); and

3. Upon giving effect to this Amendment, the representations and warranties set
forth in the Credit Agreement and the other Loan Documents are true and correct
in all material respects or, to the extent such representations and warranties
expressly relate to an earlier date, on and as of such earlier date. Both before
and after giving effect to this Amendment, no Default has occurred and is
continuing as of the date hereof.

E. OTHER AGREEMENTS

1. Continuing Effectiveness of Loan Documents. As amended hereby, all terms of
the Credit Agreement and the other Loan Documents shall be and remain in full
force and effect and shall constitute the legal, valid, binding and enforceable
obligations of the Loan Parties party thereto. To the extent any terms and
conditions in any of the other Loan Documents shall contradict or be in conflict
with any terms or conditions of the Credit Agreement, after giving effect to
this Amendment, such terms and conditions are hereby deemed modified and amended
accordingly to reflect the terms and conditions of the Credit Agreement as
modified and amended hereby. Upon the effectiveness of this Amendment such terms
and conditions are hereby deemed modified and amended accordingly to reflect the
terms and conditions of the Credit Agreement as modified and amended hereby.

 

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2. Reaffirmation of Guaranty. Each Guarantor consents to the execution and
delivery by the Borrowers of this Amendment and the consummation of the
transactions described herein, and ratifies and confirms the terms of the
Guaranty and Security Agreement to which such Guarantor is a party with respect
to the Indebtedness now or hereafter outstanding under the Credit Agreement as
amended hereby and all promissory notes issued thereunder. Each Guarantor
acknowledges that, notwithstanding anything to the contrary contained herein or
in any other document evidencing any Indebtedness of the Borrowers to the
Lenders or any other obligation of the Borrowers, or any actions now or
hereafter taken by the Lenders with respect to any obligation of the Borrowers,
the Guaranty and Security Agreement to which such Guarantor is a party (i) is
and shall continue to be a primary obligation of such Guarantor, (ii) is and
shall continue to be an absolute, unconditional, continuing and irrevocable
guaranty of payment, and (iii) is and shall continue to be in full force and
effect in accordance with its terms. Nothing contained herein to the contrary
shall release, discharge, modify, change or affect the original liability of any
Guarantor under the Guaranty and Security Agreement to which such Guarantor is a
party.

3. Acknowledgment of Perfection of Security Interest. Each Loan Party hereby
acknowledges that, as of the date hereof, the security interests and liens
granted to Agent and the Lenders under the Credit Agreement and the other Loan
Documents are in full force and effect, are properly perfected and are
enforceable in accordance with (and to the extent required by) the terms of the
Credit Agreement and the other Loan Documents.

4. Effect of Agreement. Except as set forth expressly herein, all terms of the
Credit Agreement, as amended hereby, and the other Loan Documents shall be and
remain in full force and effect and shall constitute the legal, valid, binding
and enforceable obligations of the Borrowers to the Lenders and Agent. The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Lenders under the Credit Agreement, nor constitute a waiver of any provision
of the Credit Agreement. This Amendment shall constitute a Loan Document for all
purposes of the Credit Agreement.

5. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of New York and all applicable
federal laws of the United States of America.

6. No Novation. This Amendment is not intended by the parties to be, and shall
not be construed to be, a novation of the Credit Agreement and the other Loan
Documents or an accord and satisfaction in regard thereto.

7. Costs and Expenses. The Borrowers agree to pay on demand all reasonable and
documented costs and expenses of Agent in connection with the preparation,
execution and delivery of this Amendment, including, without limitation, the
reasonable and documented fees and out-of-pocket expenses of outside counsel for
Agent with respect thereto.

 

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8. Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, each of which shall be deemed an
original and all of which, taken together, shall be deemed to constitute one and
the same instrument. Delivery of an executed counterpart of this Amendment by
facsimile transmission, Electronic Transmission or containing an E-Signature
shall be as effective as delivery of a manually executed counterpart hereof.

9. Binding Nature. This Amendment shall be binding upon and inure to the benefit
of the parties hereto, their respective successors, successors-in-titles, and
assigns.

10. Entire Understanding. This Amendment sets forth the entire understanding of
the parties with respect to the matters set forth herein, and shall supersede
any prior negotiations or agreements, whether written or oral, with respect
thereto.

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first
written above.

 

CBAY INC.
AS BORROWER

By:  

/s/ Kashyap Joshi

 

Name: Kashyap Joshi

  Title: Vice President, Finance

MEDQUIST INC.
AS BORROWER

By:  

/s/ Mark R. Sullivan

  Name: Mark R. Sullivan   Title: General Counsel & Chief Compliance
          Officer

MEDQUIST TRANSCRIPTIONS, LTD.
AS BORROWER

By:  

/s/ Mark R. Sullivan

  Name: Mark R. Sullivan   Title: General Counsel & Chief Compliance
          Officer

MEDQUIST HOLDINGS INC.
AS HOLDINGS

By:  

/s/ Mark R. Sullivan

  Name: Mark R. Sullivan   Title: General Counsel & Chief Compliance
          Officer GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender By:
 

/s/ Kevin Blitz

  Its Duly Authorized Signatory

[Signature Page to First Amendment - MedQuist]

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SUNTRUST BANK, as Lender

By:  

/s/ John Cappellari

  Name: John Cappellari   Title: Vice President

[Signature Page to First Amendment - MedQuist]

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ING CAPITAL LLC, as Lender By:  

/s/ Mike Garvin

  Name: Mike Garvin   Title: Managing Director

[Signature Page to First Amendment - MedQuist]

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REGIONS BANK, as Lender By:  

/s/ Kap Yarbrough

  Name: Kap Yarbrough   Title: Vice President

[Signature Page to First Amendment - MedQuist]

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CAPITALSOURCE BANK, as Lender By:  

/s/ J. Stephen Klose

  Name: J. Stephen Klose   Title: SVP/Portfolio Manager

[Signature Page to First Amendment - MedQuist]

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ROYAL BANK OF CANADA, as Lender By:  

/s/ Dean Sas

  Name: Dean Sas   Title: Authorized Signatory

[Signature Page to First Amendment - MedQuist]

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FIFTH THIRD BANK, as Lender By:  

/s/ William D. Priester

  Name: William D. Priester   Title: Senior Relationship Manager

[Signature Page to First Amendment - MedQuist]

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MIHI LLC,

as Lender

By:  

/s/ Katherine Mogg

  Name: Katherine Mogg   Title: Authorized Signatory

By:

 

/s/ Rob D. Redmond

  Name: Rob D. Redmond   Title: Authorized Signatory

[Signature Page to First Amendment - MedQuist]

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EXHIBIT A

Waiver and First Amendment to

Senior Subordinated Note Purchase Agreement

(see attached)

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WAIVER AND FIRST AMENDMENT

This WAIVER AND FIRST AMENDMENT, dated as of July 11, 2011 (this “Waiver and
First Amendment”), is entered into among CBay Inc., a Delaware corporation
(“CBay”), MedQuist Inc., a New Jersey corporation (“MedQuist”), MedQuist
Transcriptions, Ltd., a New Jersey corporation (“MedQuist Transcriptions”, and
together with CBay and MedQuist, the “Issuers”), MedQuist Holdings Inc., a
Delaware corporation (“Holdings”), MedQuist, as Issuer Representative, BlackRock
Kelso Capital Corporation (“BKC”), PennantPark Investment Corporation
(“Pennant”), Citibank, N.A. (“Citibank”), and THL Credit, Inc. (“THL” and
together with BKC, Pennant, Citibank and the other Purchasers from time to time
parties hereto, collectively, the “Purchasers”).

WHEREAS, the Issuers, Holdings and the Purchasers are party to that certain
Senior Subordinated Note Purchase Agreement, dated as of September 30, 2010 (the
“Note Purchase Agreement”; all capitalized terms defined in the Note Purchase
Agreement and not otherwise defined herein to have the meanings assigned thereto
in the Note Purchase Agreement);

WHEREAS, the Issuers and Holdings have requested that the Purchasers amend
certain reporting covenants set forth in Section 6.1 of the Note Purchase
Agreement;

WHEREAS, Holdings intends to consummate the proposed acquisition of
[                    ] on the terms described in Annex A hereto (the “Project
Miami Acquisition”);

WHEREAS, the Note Purchase Agreement contains certain restrictions with respect
to Permitted Acquisitions;

WHEREAS, the Issuers and Holdings have requested that the Purchasers waive such
restrictions with respect to Permitted Acquisitions to permit the Project Miami
Acquisition as a Permitted Acquisition; and

WHEREAS, subject to the terms and conditions hereof, the Purchasers are willing
to waive certain restrictions on Permitted Acquisitions to permit the Project
Miami Acquisition as a Permitted Acquisition and to make amendments to the Note
Purchase Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

SECTION 1.

AMENDMENT

Section 1.1. Subject to the fulfillment of the conditions set forth in
Section 4.1 below, the Note Purchase Agreement is hereby amended, as of the
Effective Date, as follows:

(a) The definitions of each of “Discounted Value”, “Remaining Scheduled
Payments” and “Reinvestment Yield” set forth in the Note Purchase Agreement are
deleted in their entireties;

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(b) The definition of “Called Notes” set forth in the Note Purchase Agreement is
amended and restated in its entirety as follows:

““Called Notes” means the principal amount of the Notes that is to be prepaid at
a voluntary redemption date occurring during the No Call Period pursuant to
Section 2.6(b)(iii).”

(c) The definition of “Make-Whole Amount” set forth in the Note Purchase
Agreement is amended and restated in its entirety as follows:

““Make-Whole Amount” means, with respect to any redemption or prepayment of
Called Notes during the No Call Period, an amount equal to (a) the excess, if
any, of the present value as of the date of such redemption or prepayment of
(i) 107% of such Called Notes, plus (ii) all required interest payments at the
Cash Rate due on such Called Notes though the end of the No Call Period
(excluding accrued but unpaid interest through the redemption date), computed
using a discount rate equal to the Treasury Rate at such redemption or
prepayment date, plus 50 basis points over (b) such Called Notes; provided that
the Make-Whole Amount may in no event be less than zero.”

(d) The following definition is inserted in the appropriate alphabetical order
in Section 1.1 of the Note Purchase Agreement:

““No Call Period” means the period prior to the start of the twenty-fifth month
following the Funding Date.”

(e) The following definition is inserted in the appropriate alphabetical order
in Section 1.1 of the Note Purchase Agreement:

““Treasury Rate” means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15
(519) which has become publicly available at least two business days prior to
the redemption or prepayment date (or, if such Statistical Release is no longer
published, any publicly available source or similar market data)) most nearly
equal to the period from the redemption or prepayment date to the end of the No
Call Period; provided, however, that if the period from the redemption or
prepayment date to the end of the No Call Period is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the redemption or prepayment date to the end or the No
Call Period is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.”

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(f) Section 2.6(b) of the Note Purchase Agreement is amended and restated in its
entirety as follows:

“(b) Prepayments.

(i) The Issuers may, at any time following the No Call Period, redeem the Notes
in whole or in part (and if in part shall be in an aggregate amount that is an
integral multiple of $1,000,000) at the following redemption prices (expressed
as a percentage of the then outstanding principal balance of the Notes to be
repaid) (the “Redemption Price”), plus accrued and unpaid interest (including
PIK Interest) through the date of redemption:

 

Months after the Funding Date

   Redemption Price  

25-36

     107.0 % 

37-48

     103.0 % 

49-60

     101.0 % 

Thereafter

     100.0 % 

(ii) If the Issuers elect to make any permitted redemption of the Notes pursuant
to this Section 2.6(b), the Issuer Representative shall give notice of such
redemption to each Purchaser not less than five (5) Business Days and not more
than 60 days prior to the date such redemption is to be made, specifying (i) the
date on which such prepayment is to be made and (ii) the amount of such
prepayment. Subject to Section 2.6(b)(iii), the aggregate principal amount of
the Notes so specified to be prepaid, together with accrued interest thereon
(including any interest payable in kind), shall be due and payable on the
prepayment date set forth in such notice; provided, however, that such notice
may provide that such prepayment is contingent upon the consummation of a
related financing or acquisition transaction, in which case such Notes shall not
be due and payable if such transaction is not consummated.

(iii) During the No Call Period, upon notice given as provided in
Section 2.6(b)(ii), the Issuers, at their option, may prepay all or any part of
the principal amount of the Notes (and if in part shall be in an aggregate
amount that is an integral multiple of $1,000,000), together with accrued but
unpaid interest on the principal amount being prepaid to the date of such
prepayment, plus the Make-Whole Amount.

(iv) If as a result of an Event of Default or otherwise, the Notes are caused to
be repaid prior to the Maturity Date other than in accordance with an accepted
Redemption Offer pursuant to Section 2.6(c), then the Obligations shall be
repaid taking into consideration the Make-Whole Amount or at the Redemption
Price applicable at the time such Event of Default first occurred.”

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(g) Section 6.1(a) of the Note Purchase Agreement is amended and restated in its
entirety as follows:

“(a) Monthly Reports. Within 30 days after the end of each month (other than
each month corresponding with the end of a Fiscal Quarter, in which case, within
45 days of the end of each such month), the internal Consolidated unaudited
balance sheet of each of MedQuist and CBay as of the close of such fiscal month
and related Consolidated statements of income and cash flow for such fiscal
month and that portion of the Fiscal Year ending as of the close of such fiscal
month, setting forth in comparative form the figures for the corresponding
period in the prior Fiscal Year (after the first anniversary of the Closing
Date) prepared for management and consistent with past practice.”

(h) Section 6.1(b) of the Note Purchase Agreement is amended and restated in its
entirety as follows:

“(b) Quarterly Reports. As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter of each Fiscal Year (except with respect to
the Fiscal Quarter corresponding with the end of each Fiscal Year, in which
case, within 90 days of the end of such Fiscal Quarter) (i) ending before the
MedQuist Consolidation Date, the Consolidated unaudited balance sheet of
Holdings, the Consolidated unaudited balance sheet of MedQuist and all
eliminations necessary to reconcile such balance sheets and (ii) ending on or
after the MedQuist Consolidation Date, the Consolidated unaudited balance sheet
of Holdings, in each case as of the close of such Fiscal Quarter, and including
related Consolidated statements of income and cash flow for such Fiscal Quarter
and that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter, setting forth in comparative form (x) the figures for the corresponding
period in the prior Fiscal Year (after the first anniversary of the Closing
Date) and (y) the figures for the corresponding period set forth in the most
recent corresponding Projections received by the Purchasers pursuant to
Section 6.1(f), in each case certified by a Responsible Officer of the Issuer
Representative as fairly presenting in all material respects the Consolidated
financial position, results of operations and cash flow of Holdings and/or
MedQuist, as applicable, as at the dates indicated and for the periods indicated
in accordance with GAAP (subject to the absence of footnote disclosure and
normal year-end audit adjustments).”

(i) Section 8.1(n) of the Note Purchase Agreement is amended and restated in its
entirety as follows:

“(n) to the extent constituting Indebtedness (i) any earn-out or similar
obligation of any Group Member incurred in connection with a Permitted
Acquisition and (ii) any Group Member’s deferred cash purchase consideration
arising in connection with the Project Miami Acquisition (as defined in the
Waiver and First Amendment to this Agreement, dated as of July 11, 2011) in a
principal amount not to exceed $30,000,000;”.

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SECTION 2.

WAIVER OF PERMITTED ACQUISITIONS RESTRICTIONS

Section 2.1. Subject to the fulfillment of the conditions set forth in
Section 4.1 below, the Purchasers hereby (a) agree to waive, solely with respect
to the Project Miami Acquisition, each of the limits on aggregate amounts
payable set forth in clause (a) of the definition of “Permitted Acquisition”
under the Note Purchase Agreement; provided that (A) with respect to clause
(a)(ii) immediately after the consummation of the Project Miami Acquisition
actual Additional Available Cash shall be reduced to zero and (B) with respect
to clauses (a)(i) and (a)(iii) any amounts payable with respect to the Project
Miami Acquisition shall not reduce the dollar limits with respect to future
Permitted Acquisitions; provided, further that (1) to the extent each other
requirement of the definition of “Permitted Acquisition” under the Note Purchase
Agreement is satisfied with respect to the Project Miami Acquisition, the
Project Miami Acquisition shall be a Permitted Acquisition, (2) the Project
Miami Acquisition shall not be funded with the proceeds of any Loans or with
more than $60,000,000 in cash and Cash Equivalents from the Group Members’
balance sheets and (3) the restructuring and acquisition expenses incurred in
connection with the Project Miami Acquisition that may be added back to
Consolidated EBITDA pursuant to clause (x) of the definition thereof as set
forth in the Note Purchase Agreement shall be capped at $10,000,000.

SECTION 3.

REPRESENTATIONS AND WARRANTIES

Section 3.1. The Issuers and Holdings hereby represent and warrant that: (a) the
representations and warranties contained in the Note Purchase Agreement are true
and correct on the date hereof with the same effect as though such
representations and warranties had been made on the date hereof, except to the
extent such representations expressly relate to an earlier, specific calendar
date and then only to the extent that such representations and warranties were
represented and/or warranted in the Note Purchase Agreement to be true and
correct on such earlier date; (b) no Default or Event of Default has occurred or
is continuing; and (c) the execution, delivery and performance of this Waiver
and First Amendment: (i) has been duly authorized by all necessary corporate
action, (ii) will not violate any applicable material Requirement of Law or
their Constituent Documents and (iii) will not be in conflict or result in a
breach with any material Contractual Obligation of any Group Member other than
those that would not, in the aggregate, have a Material Adverse Effect.

SECTION 4.

CONDITIONS TO EFFECTIVENESS

Section 4.1. The amendments set forth in Section 1 and the waiver set forth in
Section 2 shall become effective at the time the following conditions are
satisfied to the Purchasers’ satisfaction (the date of satisfaction of such
conditions, the “Effective Date”):

(a) The Purchasers shall have received one or more counterparts of this Waiver
and First Amendment executed and delivered by each of the Issuers and Holdings;

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(b) After giving effect to this Waiver and First Amendment, no Default or Event
of Default shall have occurred and be continuing as of the date of this
Amendment;

(c) The representations and warranties of Issuers and Holdings contained in this
Waiver and First Amendment shall be true and correct in all material respects on
and as of the Effective Date.

(d) The Issuers and Holdings shall have entered into an agreement with the
Senior Lenders pursuant to which (i) Section 6.01(a) of the Senior Credit
Agreement is amended in a manner consistent with Section 1.1 hereof, (ii) the
Senior Lenders waive the restrictions set forth in clause (a) of the definition
of “Permitted Acquisition” in the Senior Credit Agreement so as to permit the
Project Miami Acquisition and (iii) the Senior Lenders consent to the payment of
the Amendment Fee and the Waiver Fee to Purchasers as set forth herein.

(e) The Issuers shall have paid to each Purchaser a non-refundable amendment fee
in cash in an amount equal to 25 basis points multiplied by the outstanding
amount of such Purchaser’s Note which shall be fully earned on the Effective
Date (the “Amendment Fee”).

SECTION 5.

PROJECT MIAMI ACQUISITION

Section 5.1. Upon the consummation of the Project Miami Acquisition,
automatically, without further demand or action:

(a) The Issuers shall pay to each Purchaser a non-refundable waiver fee in cash
in an amount equal to 50 basis points multiplied by the outstanding amount of
such Purchaser’s Note which shall be fully earned and due and payable on the
consummation of the Project Miami Acquisition (the “Waiver Fee”).

(b) The definition of “No Call Period” shall be amended and restated in its
entirety as follows:

““No Call Period” means the period prior to the start of the thirty-first month
following the Funding Date.”

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(c) The table set forth in Section 2.6(b)(i) of the Note Purchase Agreement
shall be amended and restated in its entirety as follows:

 

Months after the Funding Date

  

Redemption Price

  31-42      107.0 %  43-54      103.0 %  55-66      101.0 %  Thereafter     
100.0 % 

SECTION 6.

MISCELLANEOUS

Section 6.1. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Note Documents shall remain
in full force and effect in accordance with their respective terms. The
amendments and waiver set forth herein shall be limited precisely as provided
for herein and shall not be deemed to be a waiver of, amendment of, consent to
or modification of any term or provision of the Note Documents or any other
document or instrument referred to therein or of any transaction or further or
future action on the part of the Issuers or Holdings requiring the consent of
the Purchasers except to the extent specifically provided for herein. The
Purchasers have not and shall not be deemed to have waived any of their
respective rights and remedies against the Issuers or Holdings for any existing
or future Defaults or Event of Default.

Section 6.2. The Issuers agree to pay on demand all reasonable and documented
costs and expenses of or incurred by the Purchasers in connection with the
negotiation, preparation, execution and delivery of this Waiver and First
Amendment, including the reasonable and documented fees and expenses of
transaction counsel for the Purchasers.

Section 6.3. This Waiver and First Amendment may be executed in any number of
counterparts, and by the different parties on different counterpart signature
pages, all of which taken together shall constitute one and the same agreement.
Any of the parties hereto may execute this Waiver and First Amendment by signing
any such counterpart and each of such counterparts shall for all purposes be
deemed to be an original. Delivery of executed counterparts of this Waiver and
First Amendment by telecopy shall be effective as an original. This Waiver and
First Amendment shall be governed by the internal laws of the State of New York.

[signature pages follow]

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

 

CBAY INC., as Issuer By:  

 

  Name:   Title: MEDQUIST INC., as Issuer By:  

 

  Name:   Title: MEDQUIST TRANSCRIPTIONS, LTD., as Issuer By:  

 

  Name:   Title: MEDQUIST HOLDINGS INC., as Holdings By:  

 

  Name:   Title:

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PURCHASERS:

BLACKROCK KELSO CAPITAL CORPORATION,

By: BLACKROCK KELSO CAPITAL ADVISORS LLC, its Investment Manager,

as Purchaser

By:

 

 

  Name:   Title:

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PENNNANTPARK INVESTMENT CORPORATION, as Purchaser By:  

 

  Name:   Title:

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

CITIBANK, N.A., as Purchaser By:  

 

  Name:   Title

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

THL CREDIT, INC., as Purchaser By:  

 

  Name:   Title:

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The Senior Agent acknowledges and agrees that notwithstanding the restrictions
on Distributions with respect the Subordinated Debt set forth in the
Subordination Agreement, the Issuers may pay and the Purchasers may retain the
Amendment Fee and the Waiver Fee for their own benefit.

GENERAL ELECTRIC CAPITAL CORPORATION,

as Senior Agent

By:  

 

  Name:   Title:

[Signature Page to Waiver and First Amendment]

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EXHIBIT B

Second Amendment to

Senior Subordinated Note Purchase Agreement

(see attached)

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SECOND AMENDMENT

TO SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

This SECOND AMENDMENT TO SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT, dated as
of July 11, 2011 (this “Second Amendment”), is entered into among CBay Inc., a
Delaware corporation (“CBay”), MedQuist Inc., a New Jersey corporation
(“MedQuist”), MedQuist Transcriptions, Ltd., a New Jersey corporation (“MedQuist
Transcriptions”, and together with CBay and MedQuist, the “Issuers”), MedQuist
Holdings Inc., a Delaware corporation (“Holdings”), MedQuist, as Issuer
Representative, BlackRock Kelso Capital Corporation (“BKC”), PennantPark
Investment Corporation (“Pennant”), Citibank, N.A. (“Citibank”), and THL Credit,
Inc. (“THL” and together with BKC, Pennant, Citibank and the other Purchasers
from time to time parties hereto, collectively, the “Purchasers”).

WHEREAS, the Issuers, Holdings and the Purchasers are party to that certain
Senior Subordinated Note Purchase Agreement, dated as of September 30, 2010 (as
amended by that certain Waiver and First Amendment, dated as of July 11, 2011,
the “Note Purchase Agreement”; all capitalized terms defined in the Note
Purchase Agreement and not otherwise defined herein to have the meanings
assigned thereto in the Note Purchase Agreement);

WHEREAS, the Issuers and Holdings have requested that the Purchasers amend
certain provisions of the Note Purchase Agreement;

WHEREAS, subject to the terms and conditions hereof, the Purchasers are willing
to make amendments to the Note Purchase Agreement as provided herein.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

SECTION 1.

AMENDMENTS TO NOTE PURCHASE AGREEMENT

Subject to the fulfillment of the conditions set forth in Section 4.1 below, the
Note Purchase Agreement is hereby amended, as of the Effective Date, as follows:

Section 1.1. The definition of “Permitted Acquisition” set forth in the Note
Purchase Agreement is amended and restated in its entirety as follows:

““Permitted Acquisition” means any Proposed Acquisition satisfying each of the
following conditions: (a) the aggregate amounts payable in connection with, and
other consideration for (in each case, including all transaction costs and all
Indebtedness, liabilities and Guaranty Obligations incurred or assumed in
connection therewith or otherwise reflected in a Consolidated balance sheet of
Holdings and the Proposed Acquisition Target), such Proposed Acquisition and all
other Permitted Acquisitions consummated on or prior to the date of the
consummation of such Proposed Acquisition shall not exceed (i) $50,000,000 in
the aggregate in any Fiscal Year or $150,000,000 in the aggregate during the
term of this Agreement plus (ii) Additional Available Cash as of the

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date of consummation of such Proposed Acquisition plus (iii) an unlimited amount
in the form of shares of common stock of Holdings issued in connection with such
Proposed Acquisition, (b) the Purchasers shall have received reasonable advance
notice of such Proposed Acquisition including a reasonably detailed description
thereof at least 15 days prior to the consummation of such Proposed Acquisition
(or such later date as may be agreed by the Required Purchasers) and on or prior
to the date of such Proposed Acquisition, the Purchasers shall have received
copies of the acquisition agreement and related Contractual Obligations and
other documents (including financial information and analysis, environmental
assessments and reports, opinions, certificates and lien searches) and
information reasonably requested by the Required Purchasers, (c) as of the date
of consummation of such Proposed Acquisition and after giving effect to all
transactions to occur on such date as part of such Proposed Acquisition, (1) all
conditions set forth in clauses (i) and (ii) of Section 3.1(f) shall be
satisfied or duly waived, (2) Holdings shall, on a Pro Forma Basis as of the
last day of the last Fiscal Quarter for which Financial Statements have been
delivered hereunder, have a Consolidated Total Leverage Ratio and Consolidated
Senior Leverage Ratio which are at least 0.25:1.00 less than the required
thresholds set forth in Sections 5.1 and 5.2 as of such date, as applicable, and
(3) Holdings shall have Liquidity of at least $20,000,000 and (d) such Proposed
Acquisition is consummated no earlier than December 31, 2010.”

Section 1.2. A new Section 5.5 shall be added as follows:

“Section 5.5 Notwithstanding the minimum and maximum covenant levels set forth
in Sections 5.1, 5.2 and 5.4 above, if the Senior Loan Documents are amended,
restated, refinanced or otherwise replaced prior to or on September 30, 2011,
such minimum and maximum covenant levels set forth herein shall automatically be
deemed to be revised to reflect any amendments to such minimum and maximum
covenant levels for the corresponding financial covenants under the Senior
Credit Agreement, with appropriate differences in covenant levels consistent
with the differences in existence on the Funding Date between the Senior Loan
Agreement and the Note Purchase Agreement.”

Section 1.3. Section 8.5(j) of the Note Purchase Agreement is amended and
restated in its entirety as follows:

“(j) other Restricted Payments by the Group Members not to exceed $25,000,000 in
the aggregate during the term of this Agreement plus, to the extent the
Consolidated Total Leverage Ratio of Holdings is less than 1.00:1.00 both before
and after giving effect to such Restricted Payment and any Indebtedness incurred
in connection therewith, Additional Available Cash; provided, that at the time
any such Restricted Payment is made no Default or Event of Default shall exist
or shall result therefrom.”

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SECTION 2.

AMENDMENT TO THE SUBORDINATION AGREEMENT

Section 2.1. Purchasers agree to work with the Senior Lenders to cause the
definition of “Senior Debt” in the Subordination Agreement to be amended and
restated in its entirety as follows:

“Senior Debt” means all obligations, liabilities and indebtedness of every
nature of any Company or any guarantor from time to time owed under the Senior
Debt Documents, the Secured Hedging Obligations and the Bank Product
Obligations, including, without limitation, the principal amount of all debts,
claims and indebtedness, accrued and unpaid interest and all fees, costs and
expenses, whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and from time to time hereafter owing, due or payable, whether
before or after the filing of a Proceeding under the Bankruptcy Code together
with (a) any amendments, modifications, renewals or extensions thereof to the
extent not prohibited by the terms of this Agreement and (b) any interest
accruing thereon after the commencement of a Proceeding, without regard to
whether or not such interest is an allowed claim; provided, however, that in no
event shall the principal amount of the Senior Debt (specifically excluding the
Secured Hedging Obligations and Bank Product Obligations) exceed the sum of
$275,000,000 reduced by the amount of any prepayments and repayments and
commitment reductions under the Senior Credit Agreement to the extent that such
payments and reductions may not be reborrowed (specifically excluding, however,
any such repayments and commitment reductions occurring in connection with any
Permitted Refinancing) (the “Maximum Senior Principal Amount”). Senior Debt
shall be considered to be outstanding whenever any loan commitment under the
Senior Debt Document is outstanding. Notwithstanding the foregoing, no Sponsor
Affiliated Lender (as defined in the Senior Credit Agreement as in effect on the
date hereof) or Group Member shall be entitled to the benefits of this Agreement
as a holder of Senior Debt, except that to the extent that a Sponsor Affiliated
Lender (x) holds no more than ten percent (10%) of the combined principal amount
of the term loan obligations under the Senior Debt Documents determined at the
time such obligation under the Senior Debt Documents and (y) is subject, in
relation to such obligations under the Senior Debt Documents, to the voting and
other restrictions as set forth in the last sentence of Section 11.2(b) of the
Senior Credit Agreement as in effect on the date hereof.”

SECTION 3.

REPRESENTATIONS AND WARRANTIES

Section 3.1. The Issuers and Holdings hereby represent and warrant that on the
date hereof and on the Effective Date: (a) the representations and warranties
contained in the Note Purchase Agreement are true and correct on the date hereof
with the same effect as though such representations and warranties had been made
on the date hereof and on the Effective Date, except to the extent such
representations expressly relate to an earlier, specific calendar date and then
only to the extent that such representations and warranties were represented
and/or warranted in the Note Purchase Agreement to be true and correct on such
earlier date; (b) no

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Default or Event of Default has occurred or is continuing; and (c) the
execution, delivery and performance of this Second Amendment: (i) has been duly
authorized by all necessary corporate action, (ii) will not violate any
applicable material Requirement of Law or their Constituent Documents and
(iii) will not be in conflict or result in a breach with any material
Contractual Obligation of any Group Member other than those that would not, in
the aggregate, have a Material Adverse Effect.

SECTION 4.

CONDITIONS TO EFFECTIVENESS

Section 4.1. The amendments set forth in Section 1 and the agreement set forth
in Section 2 shall become effective at the time the following conditions are
satisfied to the Purchasers’ satisfaction (the date of satisfaction of such
conditions, the “Effective Date”):

(a) The Purchasers shall have received one or more counterparts of this Second
Amendment executed and delivered by each of the Issuers and Holdings;

(b) After giving effect to this Second Amendment, no Default or Event of Default
shall have occurred and be continuing as of the date hereof and on the Effective
Date of this Second Amendment;

(c) The representations and warranties of Issuers and Holdings contained in this
Second Amendment shall be true and correct in all material respects on and as of
the Effective Date;

(d) The Issuers shall pay to each Purchaser a non-refundable amendment fee in
cash in an amount equal to 50 basis points multiplied by the outstanding amount
of such Purchaser’s Note (the “Second Amendment Fee”) which shall be fully
earned as of the date hereof and payable on the date that is the earlier of
(a) September 30, 2011 and (b) the date on which the Indebtedness under the
Senior Credit Agreement is refinanced;

(e) Notwithstanding anything to the contrary herein, the payment of the Second
Amendment Fee on or prior to September 30, 2011 (the “Effective Date Deadline”)
is a condition precedent to the effectiveness of the Second Amendment and if the
Second Amendment Fee is not paid on or prior to the Effective Date Deadline, the
right of the Issuers or any other Persons to enter into the Second Amendment
shall automatically, without further action by any party hereto, terminate
and the Second Amendment shall be null and void without ever having any force or
effect; and

(f) The Senior Agent shall have consented, in writing, to the terms of this
Second Amendment.

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SECTION 5.

MISCELLANEOUS

Section 5.1. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Note Documents shall remain
in full force and effect in accordance with their respective terms. The
amendments and waiver set forth herein shall be limited precisely as provided
for herein and shall not be deemed to be a waiver of, amendment of, consent to
or modification of any term or provision of the Note Documents or any other
document or instrument referred to therein or of any transaction or further or
future action on the part of the Issuers or Holdings requiring the consent of
the Purchasers except to the extent specifically provided for herein. The
Purchasers have not and shall not be deemed to have waived any of their
respective rights and remedies against the Issuers or Holdings for any existing
or future Defaults or Event of Default.

Section 5.2. The Issuers agree to pay on demand all reasonable and documented
costs and expenses of or incurred by the Purchasers in connection with the
negotiation, preparation, execution and delivery of this Second Amendment,
including the reasonable and documented fees and expenses of transaction counsel
for the Purchasers.

Section 5.3. This Second Amendment may be executed in any number of
counterparts, and by the different parties on different counterpart signature
pages, all of which taken together shall constitute one and the same agreement.
Any of the parties hereto may execute this Second Amendment by signing any such
counterpart and each of such counterparts shall for all purposes be deemed to be
an original. Delivery of executed counterparts of this Second Amendment by
telecopy shall be effective as an original. This Second Amendment shall be
governed by the internal laws of the State of New York.

[signature pages follow]

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

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

 

CBAY INC., as Issuer By:  

 

  Name:   Title: MEDQUIST INC., as Issuer By:  

 

  Name:   Title: MEDQUIST TRANSCRIPTIONS, LTD., as Issuer By:  

 

  Name:   Title: MEDQUIST HOLDINGS INC., as Holdings By:  

 

  Name:   Title:

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

PURCHASERS:

BLACKROCK KELSO CAPITAL CORPORATION, By: BLACKROCK KELSO CAPITAL ADVISORS LLC,
its Investment Manager,

as Purchaser

By:  

 

  Name:   Title:

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

PENNNANTPARK INVESTMENT CORPORATION, as Purchaser By:  

 

  Name:   Title:

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

CITIBANK, N.A., as Purchaser By:  

 

  Name:   Title

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

THL CREDIT, INC., as Purchaser By:  

 

  Name:   Title:

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

The Senior Agent acknowledges and agrees that notwithstanding the restrictions
on Distributions with respect the Subordinated Debt set forth in the
Subordination Agreement, the Issuers may pay and the Purchasers may retain the
Second Amendment Fee for their own benefit.

GENERAL ELECTRIC CAPITAL CORPORATION,

as Senior Agent

By:  

 

  Name:   Title:

[Signature Page to Second Amendment]