EXHIBIT 10.2
EXECUTION VERSION
$85,000,000
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
Dated as of September 30, 2010
among
CBAY INC., MEDQUIST INC.,
and
MEDQUIST TRANSCRIPTIONS, LTD,
AS ISSUERS,
CBAYSYSTEMS HOLDINGS LIMITED, AS HOLDINGS
and
BLACKROCK KELSO CAPITAL CORPORATION,
PENNANTPARK INVESTMENT CORPORATION
CITIBANK, N.A.
and
THL CREDIT, INC.
AS PURCHASERS
♦ ♦ ♦

 

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This Agreement and the rights and obligations evidenced hereby are subordinate
in the manner and to the extent set forth in that certain Subordination and
Intercreditor Agreement (the “Subordination Agreement”) among Blackrock Kelso
Capital Corporation (“BKC”), PennanPark Investment Corporation (“Pennant”),
Citibank, N.A. (“Citibank”), THL Credit, Inc. (“THL” and together with BKC,
Pennat and Citibank, the “Purchasers”), 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”) and General Electric Capital
Corporation (“Agent”), to the indebtedness (including interest) owed by the
Companies pursuant to that certain Credit Agreement dated as of October 1, 2010
among the Companies, Agent and the lenders from time to time party thereto, as
such Credit Agreement has been and hereafter may be amended, supplemented or
otherwise modified from time to time and to indebtedness refinancing the
indebtedness under that agreement as contemplated by the Subordination
Agreement; and each holder of this instrument, by its acceptance hereof,
irrevocably agrees to be bound by the provisions of the Subordination Agreement.

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TABLE OF CONTENTS

         
ARTICLE 1 DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
    7  
 
       
Section 1.1 Defined Terms
    7  
Section 1.2 UCC Terms
    36  
Section 1.3 Accounting Terms and Principles
    36  
Section 1.4 Pro Forma
    36  
Section 1.5 Payments
    36  
Section 1.6 Interpretation
    37  
 
       
ARTICLE 2 ISSUANCE AND SALE OF NOTES; INTEREST AND REPAYMENT
    37  
 
       
Section 2.1 Note Issuance
    37  
Section 2.2 Procedures for Issuance
    38  
Section 2.3 [Reserved.]
    38  
Section 2.4 [Reserved.]
    38  
Section 2.5 [Reserved.]
    38  
Section 2.6 Repayment and Prepayment of Obligations
    38  
Section 2.7 Interest
    40  
Section 2.8 AHYDO Payments
    41  
Section 2.9 [Reserved.]
    41  
Section 2.10 Application of Payments
    41  
Section 2.11 Payments and Computations
    42  
Section 2.12 Evidence of Debt
    42  
Section 2.13 [Reserved.]
    43  
Section 2.14 [Reserved.]
    43  
Section 2.15 [Reserved.]
    43  
Section 2.16 [Reserved.]
    43  
Section 2.17 Taxes
    43  
Section 2.18 [Reserved.]
    46  
Section 2.19 Issuer Representative
    46  
 
       
ARTICLE 3 CONDITIONS TO PURCHASE OF NOTES
    47  
 
       
Section 3.1 Conditions Precedent to Purchase of Notes
    47  
Section 3.2 Conditions to Funding
    49  
 
       
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
    49  
 
       
Section 4.1 Corporate Existence; Compliance with LAw
    49  
Section 4.2 Note Documents and Related Documents
    50  
Section 4.3 Ownership of Group Members
    50  
Section 4.4 Financial Statements
    51  
Section 4.5 Material Adverse Effect
    51  
Section 4.6 Solvency
    52  
Section 4.7 Litigation
    52  
Section 4.8 Taxes
    52  
Section 4.9 Margin Regulations
    52  
Section 4.10 No Defaults
    52  
Section 4.11 Investment Company Act
    52  
Section 4.12 Labor Matters
    53  
Section 4.13 ERISA
    53  
Section 4.14 Environmental Matters
    53  
Section 4.15 Intellectual Property
    54  
Section 4.16 Title; Real Property
    54  
Section 4.17 Full Disclosure
    54  

 

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Section 4.18 Anti-Terrorism Laws
    55  
Section 4.19 Material Agreement
    55  
Section 4.20 Health Care Matters
    55  
Section 4.21 Health Care Permits
    55  
Section 4.22 Exclusion
    55  
Section 4.23 HIPAA
    56  
 
       
ARTICLE 5 FINANCIAL COVENANTS
    56  
 
       
Section 5.1 Maximum Consolidated Senior Leverage Ratio
    56  
Section 5.2 Maximum Consolidated Total Leverage Ratio
    57  
Section 5.3 [Reserved.]
    58  
Section 5.4 Minimum Consolidated Interest Coverage Ratio
    58  
 
       
ARTICLE 6 REPORTING COVENANTS
    58  
 
       
Section 6.1 Financial Statements
    58  
Section 6.2 Other Events
    60  
Section 6.3 Copies of Notices and Reports
    61  
Section 6.4 Labor Matters
    61  
Section 6.5 ERISA-Related Information
    61  
 
       
ARTICLE 7 AFFIRMATIVE COVENANTS
    62  
 
       
Section 7.1 Maintenance of Corporate
    62  
Section 7.2 Compliance with Laws, Etc.
    62  
Section 7.3 Payment of Obligations
    62  
Section 7.4 Maintenance of Property
    62  
Section 7.5 Maintenance of Insurance
    63  
Section 7.6 Keeping of Books
    63  
Section 7.7 Access to Books and Property
    63  
Section 7.8 Environmental
    64  
Section 7.9 Use of Proceeds
    64  
Section 7.10 Additional Guaranties
    64  
Section 7.11 [Reserved.]
    64  
Section 7.12 Compliance Program
    64  
 
       
ARTICLE 8 NEGATIVE COVENANTS
    65  
 
       
Section 8.1 Indebtedness
    65  
Section 8.2 Liens
    67  
Section 8.3 Investments
    68  
Section 8.4 Asset Sales
    69  
Section 8.5 Restricted Payments
    71  
Section 8.6 Prepayment of Indebtedness
    73  
Section 8.7 Fundamental Changes
    73  
Section 8.8 Change in Nature of Business
    74  
Section 8.9 Transactions with Affiliates
    74  
Section 8.10 Third-Party Restrictions on Indebtedness, Liens, Investments or
Restricted Payments
    76  
Section 8.11 Modification of Certain Documents
    77  
Section 8.12 Fiscal Year
    77  
Section 8.13 Margin Regulations
    77  
Section 8.14 Compliance with ERISA
    77  
Section 8.15 Hazardous Materials
    77  
Section 8.16 Limitation on Layering Indebtedness
    77  
 
       
ARTICLE 9 EVENTS OF DEFAULT
    78  

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Section 9.1 Definition
    78  
Section 9.2 Remedies
    80  
 
       
ARTICLE 10 RESERVED
    80  
 
       
ARTICLE 11 MISCELLANEOUS
    80  
 
       
Section 11.1 Amendments, Waivers, Etc.
    80  
Section 11.2 Assignments and Participations; Binding Effect
    81  
Section 11.3 Costs and Expenses
    83  
Section 11.4 Indemnities
    83  
Section 11.5 Survival
    84  
Section 11.6 Limitation of Liability for Certain Damages
    84  
Section 11.7 Noteholder-Issuer Relationship
    85  
Section 11.8 [Reserved.]
    85  
Section 11.9 Sharing of Payments, Etc.
    85  
Section 11.10 [Reserved.]
    85  
Section 11.11 Addresses
    85  
Section 11.12 Electronic Transmissions
    86  
Section 11.13 Governing Law
    87  
Section 11.14 Jurisdiction
    87  
Section 11.15 Waiver of Jury Trial
    88  
Section 11.16 Severability
    88  
Section 11.17 Execution in Counterparts
    88  
Section 11.18 Entire Agreement
    88  
Section 11.19 Use of Name
    88  
Section 11.20 Non-Public Information; Confidentiality
    88  
Section 11.21 Patriot Act Notice
    89  
 
       
ARTICLE 12 CROSS-GUARANTY
    89  
 
       
Section 12.1 Cross-Guaranty
    89  
Section 12.2 Waivers by Issuers
    90  
Section 12.3 Benefit of Guaranty
    90  
Section 12.4 Subordination of Subrogation, Etc.
    90  
Section 12.5 Election of Remedies
    91  
Section 12.6 Limitation
    91  
Section 12.7 Contribution with Respect to Guaranty Obligations
    91  
Section 12.8 Liability Cumulative
    92  
Section 12.9 Subordination
    92  

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SCHEDULES

     
Schedule I
  Commitments
Schedule II
  Addresses for Notices
Schedule 4.3
  Capitalization
Schedule 4.12
  Labor Matters
Schedule 4.14
  Environmental Matters
Schedule 4.19
  Material Agreements
Schedule 4.21
  Health Care Permits
Schedule 8.1
  Indebtedness
Schedule 8.2
  Liens
Schedule 8.3
  Investments
Schedule 8.9
  Affiliate Transactions
Schedule 8.10
  Contractual Obligations

EXHIBITS

     
Exhibit A
  Form of Assignment Agreement
Exhibit B
  Form of Note
Exhibit C
  PIK Toggle Notice
Exhibit D
  Form of Compliance Certificate
Exhibit E
  Subordination Agreement

6

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          THIS SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT, DATED AS OF
SEPTEMBER 30, 2010, IS ENTERED INTO AMONG CBAY INC., A DELAWARE CORPORATION
(“CBAY”), MEDQUIST INC., A NEW JERSEY CORPORATION (“MEDQUIST”), MEDQUIST
TRANSCRIPTIONS, LTD., A NEW JERSEY CORPORATION (“MEDQUIST TRANSCRIPTIONS”, AND
TOGETHER WITH CBAY AND MEDQUIST, THE “ISSUERS”), CBAYSYSTEMS HOLDINGS LIMITED, A
COMPANY INCORPORATED IN THE BRITISH VIRGIN ISLANDS AND AS SUCH ENTITY MAY BE
CONVERTED TO A DELAWARE CORPORATION PURSUANT TO SECTION 265 OF THE DELAWARE
GENERAL CORPORATION LAW (“HOLDINGS”), MEDQUIST, AS 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 PARK, CITIBANK AND THE OTHER PURCHASERS FROM TIME TO
TIME PARTIES HERETO (COLLECTIVELY, THE “PURCHASERS”).
          WHEREAS, simultaneously with the transactions contemplated under the
Senior Credit Agreement, Issuers wish to sell to Purchasers and Purchasers wish
to purchase from Issuers the 13.0% Senior Subordinated Notes Due October 2016
(each, a “Note” and collectively, the “Notes”), in an aggregate principal amount
equal to $85,000,000, for the consideration and upon the terms and conditions
contained herein; and
          WHEREAS, Holdings and the Subsidiary Guarantors (each, a “Guarantor”
and collectively, the “Guarantors”) will derive substantial direct and indirect
benefits from the issuance of the Notes hereunder and are willing to guaranty
all of the Obligations of Issuers to Purchasers under the Note Documents;
          NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
     Section 1.1 Defined Terms As used in this Agreement, the following terms
have the following meanings:
     “Acquired Business” means the assets of Spheris Inc. and its subsidiaries
acquired by the Issuers pursuant to the terms of the Acquisition Agreement.
     “Acquisition” means the acquisition by the Issuers of the Acquired
Business.
     “Acquisition Agreement” means that certain Stock and Asset Purchase
Agreement, dated as of February 2, 2010, by and among Spheris Inc. and certain
of its affiliates as sellers and CBay and MedQuist as purchasers.
     “Additional Available Cash” means, on any date, (i) aggregate Excess Cash
Flow of Holdings for periods after the Closing Date for which audited financial
statements and related Compliance Certificates have been delivered pursuant to
Section 6.1(c) and (d) after the Closing Date not required to be paid to the
Senior Agent pursuant to Section 2.8(a) of the Senior Credit Agreement plus
(ii) aggregate Net Cash Proceeds arising from the issuance or Sale by any Group

7

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Member of its own Stock (other than the Holdings IPO) not required to be paid to
the Senior Agent pursuant to Section 2.8(b) of the Senior Credit Agreement, plus
(iii) Available Holdings IPO Proceeds, plus (iv) Net Cash Proceeds arising from
the A-Life Sale, and, minus (iv) any such amounts, previously used on or prior
to such date to make Permitted Acquisitions, Investments, Restricted Payments,
in each case as expressly permitted hereunder to be made with Additional
Available Cash and, minus (vi) prepayments of the Notes pursuant to Section 2.6.
     “Affiliate” means, with respect to any Person, each other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person; provided, however, that no Purchaser shall be an Affiliate of
any Note Party. For purpose of this definition, “control” means the possession
of either (a) the power to vote 10% or more of the Voting Stock of such Person
or (b) the power to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
     “Aggregate Accrual” has the meaning specified in Section 2.8.
     “Agreement” means this Senior Subordinated Note Purchase Agreement.
     “A-Life Sale” means the sale by MedQuist of its equity investment in A-Life
Medical, Inc. pursuant to that certain Agreement and Plan of Merger, dated as of
September 20, 2010, among Ingenix, Inc., Oasis Acquisition Holdings Inc., A-Life
Medical, Inc., MedQuist and the other equity holders of A-Life Medical, Inc.,
for approximately $19,000,000 in cash at closing and $5,000,000 pursuant to an
eighteen month escrow arrangement.
     “Assignment” means an assignment agreement entered into by a Purchaser, as
assignor, and any Person, as assignee, pursuant to the terms and provisions of
Section 11.2 accepted by the Required Purchasers, in substantially the form of
Exhibit A, or any other form approved by the Required Purchasers.
     “Available Holdings IPO Proceeds” means, on any date (i) the Net Cash
Proceeds received by Holdings from the consummation of the Holdings IPO minus
(ii) in the case of the initial Holdings IPO, the Designated IPO Proceeds
Amount; provided, however, that in no event shall Available Holdings IPO
Proceeds be less than zero.
     “Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.
     “Benefit Plan” means any employee benefit plan as defined in Section 3(3)
of ERISA (whether governed by the laws of the United States or otherwise) to
which any Group Member incurs or otherwise has any obligation or liability,
contingent or otherwise.
     “BKC” has the meaning set forth in the preamble.
     “Business Day” means any day of the year that is not a Saturday, Sunday or
a day on which banks are required or authorized to close in New York City.
     “Called Notes” means the principal amount of the Notes that is to be
prepaid at a voluntary redemption date on or prior to the second anniversary of
the Funding Date pursuant to Section 2.6(b)(iii).

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     “Capital Expenditures” means, for any Person for any period, the aggregate
of all expenditures, whether or not made through the incurrence of Indebtedness,
by such Person and its Subsidiaries during such period for the acquisition,
leasing (pursuant to a Capital Lease), construction, replacement, repair,
substitution or improvement of fixed or capital assets or additions to
equipment, in each case required to be capitalized under GAAP on a Consolidated
balance sheet of such Person, excluding (a) interest capitalized during
construction and (b) any expenditure to the extent, for purpose of the
definition of Permitted Acquisition, such expenditure is part of the aggregate
amounts payable in connection with, or other consideration for, any Permitted
Acquisition consummated during or prior to such period.
     “Capital Lease” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, any property (whether real, personal or
mixed) by such Person as lessee that has been or should be accounted for as a
capital lease on a balance sheet of such Person prepared in accordance with
GAAP.
     “Capitalized Lease Obligations” means, at any time, with respect to any
Capital Lease, any lease entered into as part of any Sale and Leaseback
Transaction of any Person or any synthetic lease, the amount of all obligations
of such Person that is (or that would be, if such synthetic lease or other lease
were accounted for as a Capital Lease) capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
     “Cash Equivalents” means (a) any readily-marketable securities (i) issued
by, or directly, unconditionally and fully guaranteed or insured by the United
States federal government or (ii) issued by any agency of the United States
federal government the obligations of which are fully backed by the full faith
and credit of the United States federal government, (b) any readily-marketable
direct obligations issued by any other agency of the United States federal
government, any state of the United States or any political subdivision of any
such state or any public instrumentality thereof, in each case having a rating
of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial
paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person
organized under the laws of any state of the United States, (d) any
Dollar-denominated time deposit, insured certificate of deposit, overnight bank
deposit or bankers’ acceptance issued or accepted by any commercial bank that is
(A) organized under the laws of the United States, any state thereof or the
District of Columbia, (B) “adequately capitalized” (as defined in the
regulations of its primary federal banking regulators) and (C) has Tier 1
capital (as defined in such regulations) in excess of $250,000,000 and
(e) shares of any United States money market fund that (i) has substantially all
of its assets invested continuously in the types of investments referred to in
clause (a), (b), (c) or (d) above with maturities as set forth in the proviso
below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from
either S&P or Moody’s the highest rating obtainable for money market funds in
the United States; provided, however, that the maturities of all obligations
specified in any of clauses (a), (b), (c) and (d) above shall not exceed
365 days.
     “Cash Rate” has the meaning specified in Section 2.7(a).
     “CBay” has the meaning specified in the preamble.
     “CBay Convertible Notes” means those certain 6.00% Convertible Senior PIK
Notes due 2015 which mature on August 6, 2015 issued by CBay to Koninklijke
Philips Electronics N.V.
     “CBay India” means CBay Systems (India) Pvt. Ltd. , a company incorporated
in India.

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     “CBay Management Agreement” means that certain Services Agreement, dated as
of September 19, 2009, between Holdings and CBay.
     “CBay Transcription Agreements” means (i) that certain Sales & Services
Agreement, dated as of March 9, 2010, between MedQuist Transcriptions and CBay
Systems and (ii) that certain Transcription Services Subcontracting Agreement by
and between MedQuist Transcriptions and CBay Systems, dated as of March 31,
2009, each as in effect as of the date hereof.
     “CBay Systems” means CBay Systems & Services, Inc., a Delaware corporation.
     “CERCLA” means the United States Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.).
     “Change of Control” means the occurrence of any of the following: (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), other than Sponsor, of Stock representing 45% of the
aggregate ordinary voting power represented by the issued and outstanding Stock
of Holdings, (b) the Sale by Sponsor of all or substantially all of the Stock of
Holdings owned by Sponsor to any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) (but excluding any sale
by Sponsor of all of its shares of Stock of Holdings to the extent such shares
constitute no more than 5% of the shares of Stock of Holdings held by the
Sponsor on the Closing Date and are not sold in a series of related transactions
that would otherwise be a Change of Control), (c) the occupation of a majority
of the seats on the board of directors of Holdings by Persons who were not
directors on the Closing Date and were neither (i) nominated by the board of
directors of Holdings nor (ii) appointed by directors so nominated, (c) Holdings
ceases, directly or indirectly, to own and control, beneficially and of record,
ninety-five percent (95%) of the issued and outstanding Voting Stock and Stock
Equivalents of CBay on a fully diluted basis (as the same may be adjusted for
any combination, recapitalization or reclassification into a greater or smaller
number of shares, interests or other unit of equity security), (d) CBay ceases,
directly or indirectly, to own and control, beneficially and of record, a
percentage equal to or greater than the percentage owned and controlled as of
the Closing Date of the issued and outstanding Voting Stock and Stock
Equivalents of MedQuist on a fully diluted basis (other than through the
exercise of options existing on the Closing Date) or (e) a “Change of Control”
or any term of similar effect, as defined in any Senior Loan Document.
     “Citibank” has the meaning set forth in the preamble.
     “Closing Date” means the September 30, 2010.
     “Code” means the U.S. Internal Revenue Code of 1986, as amended.
     “Commitment” means, with respect to any Purchaser, the aggregate amount set
forth opposite such Purchaser’s name on Schedule I under the heading
“Commitment.”
     “Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

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     “Consolidated” means, with respect to any Person, the accounts of such
Person and its Subsidiaries consolidated in accordance with GAAP.
     “Consolidated Cash Interest Expense” means, with respect to any Person for
any period, the Consolidated Interest Expense of such Person for such period
less the sum of, in each case to the extent included in the definition of
Consolidated Interest Expense, (a) the amortized amount of debt discount and
debt issuance costs, (b) charges relating to write-ups or write-downs in the
book or carrying value of existing Consolidated Total Debt, (c) interest payable
in evidences of Indebtedness or by addition to the principal of the related
Indebtedness and (d) other non-cash interest.
     “Consolidated Current Assets” means, with respect to any Person at any
date, the total Consolidated current assets of such Person at such date other
than cash, Cash Equivalents and any Indebtedness owing to such Person or any of
its Subsidiaries by Affiliates of such Person.
     “Consolidated Current Liabilities” means, with respect to any Person at any
date, all liabilities of such Person and its Subsidiaries at such date that
should be classified as current liabilities on a Consolidated balance sheet of
such Person in accordance with GAAP; provided, however, that “Consolidated
Current Liabilities” shall exclude the principal amount of the Notes then
outstanding, the current portion of any other long term Indebtedness and accrued
interest payable.
     “Consolidated EBITDA” means, with respect to any Person for any period:
     (a) the Consolidated Net Income of such Person for such period;
     (b) the sum of, in each case to the extent deducted in the calculation of
such Consolidated Net Income but without duplication:
     (i) any provision for United States federal income taxes or other taxes
measured by net income;
     (ii) Consolidated Interest Expense, amortization of debt discount and
commissions and other fees and charges associated with Indebtedness (except
amortization of debt discount, expenses and fees related to the consummation of
the Related Transactions);
     (iii) any loss from extraordinary items as defined by GAAP;
     (iv) any depreciation, depletion and amortization expense;
     (v) any aggregate net loss on the Sale of property (other than accounts (as
defined under the applicable UCC) and inventory) outside the Ordinary Course of
Business;
     (vi) expenses and fees paid in cash associated with the Related
Transactions accrued in the Fiscal Years ending on December 31, 2010 or
December 31, 2011 and amortization of debt discount in the aggregate not to
exceed $14,000,000;

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

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     (vi) aggregate non-cash foreign exchange gains resulting from foreign
currency fluctuation or hedging activity related thereto.
     Notwithstanding the above, for purposes of calculating the condition
precedent set forth in Section 3.1(e) and covenants under Article 5 and
Article 8, Consolidated EBITDA for the following Fiscal Quarters shall be deemed
to be the amount set forth opposite such Fiscal Quarter below:

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

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

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Forma Basis. For the avoidance of doubt, the net income (or loss) of A Life
Medical Inc. shall not be included in the Consolidated Net Income of Holdings or
MedQuist.
     “Consolidated Senior Debt” means, as of any date, (i) the Consolidated
Total Debt of Holdings less (ii) all Indebtedness evidenced by the Notes.
     “Consolidated Senior Leverage Ratio” means, with respect to any Person as
of any date, the ratio of (a) Consolidated Senior Debt of such Person
outstanding as of such date to (b) Consolidated EBITDA for such Person for the
last period of four (4) consecutive Fiscal Quarters ending on or before such
date.
     “Consolidated Total Debt” of any Person means all Indebtedness of a type
described in clause (a), (b), (c), (d), (f) or (g) of the definition thereof
and, without duplication, all Guaranty Obligations with respect to any such
Indebtedness, in each case of such Person and its Subsidiaries on a Consolidated
basis.
     “Consolidated Total Leverage Ratio” means, with respect to any Person as of
any date, the ratio of (a) Consolidated Total Debt of such Person outstanding as
of such date to (b) Consolidated EBITDA for such Person for the last period of
four (4) consecutive Fiscal Quarters ending on or before such date.
     “Constituent Documents” means, with respect to any Person, collectively
and, in each case, together with any modification of any term thereof, to the
extent not prohibited hereunder, (a) the articles of incorporation, certificate
of incorporation, constitution or certificate of formation of such Person,
(b) the bylaws, operating agreement or joint venture agreement of such Person,
(c) any other constitutive, organizational or governing document of such Person,
whether or not equivalent, and (d) any other document setting forth the manner
of election or duties of the directors, officers or managing members of such
Person or the designation, amount or relative rights, limitations and
preferences of any Stock of such Person.
     “Contingent Note Document Obligations” means contingent indemnification
obligations arising under the Note Documents for which no claims have been
asserted.
     “Contractual Obligation” means, with respect to any Person, any provision
of any Security issued by such Person or of any document or undertaking (other
than a Note Document) to which such Person is a party or by which it or any of
its property is bound or to which any of its property is subject.
     “Copyrights” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
copyrights and all mask work, database and design rights, whether or not
registered or published, all registrations and recordations thereof and all
applications in connection therewith.
     “Corporate Chart” means a document setting forth, as of a date set forth
therein, for each Person that is a Note Party or a Subsidiary or joint venture
of a Note Party, (a) the full legal name of such Person, (b) the jurisdiction of
organization and, if organized under the laws of a state of the United States,
any organizational number and tax identification number of such Person, (c) the
location of such Person’s chief executive office (or, if applicable, sole place
of business), (d) the number of shares of each class of Stock of such Person
(other than Holdings) authorized and

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outstanding and (e) the number and percentage of such outstanding shares for
each such class owned, directly or indirectly, by each Group Member.
     “Customary Permitted Liens” means, with respect to any Person, any of the
following:
     (a) Liens (i) with respect to the payment of taxes, assessments or other
governmental charges that are not yet overdue or (ii) of suppliers, carriers,
materialmen, warehousemen, workmen or mechanics and other similar Liens that are
not yet overdue for a period of more than 30 days without the commencement of
enforcement or foreclosure, in each case imposed by law or arising in the
Ordinary Course of Business, and, for each of the Liens in clauses (i) and (ii)
above for amounts that are being contested in good faith by appropriate
proceedings diligently conducted and with respect to which adequate reserves or
other appropriate provisions are maintained on the books of such Person in
accordance with GAAP;
     (b) Liens of a collection bank on items in the course of collection arising
under Section 4-208 of the UCC as in effect in the State of New York or any
similar section under any applicable UCC or any similar Requirement of Law of
any foreign jurisdiction;
     (c) pledges or cash deposits made in the Ordinary Course of Business (i) in
connection with workers’ compensation, unemployment insurance or other types of
social security benefits (other than any Lien imposed by ERISA), (ii) to secure
the performance of bids, tenders, leases (other than Capital Leases) sales or
other trade contracts (other than for the repayment of borrowed money) or
(iii) made in lieu of, or to secure the performance of, surety, customs,
reclamation or performance bonds (in each case not related to judgments or
litigation);
     (d) judgment liens (other than for the payment of taxes, assessments or
other governmental charges) securing judgments and other proceedings not
constituting an Event of Default under Section 9.1(e) and pledges or cash
deposits made in lieu of, or to secure the performance of, judgment or appeal
bonds in respect of such judgments and proceedings;
     (e) Liens (i) arising by reason of zoning restrictions, easements,
licenses, reservations, restrictions, covenants, rights-of-way, encroachments,
minor defects or irregularities in title (including leasehold title) and other
similar encumbrances on the use of real property or (ii) consisting of leases,
licenses or subleases granted by a lessor, licensor or sublessor on its property
(in each case other than Capital Leases) otherwise permitted under Section 8.4
that, for each of the Liens in clauses (i) and (ii) above, do not, in the
aggregate, materially (x) impair the value or marketability of such real
property or (y) interfere with the ordinary conduct of the business conducted
and proposed to be conducted at such real property;
     (f) Liens of landlords and mortgagees of landlords (i) arising by statute
or under any lease or related Contractual Obligation entered into in the
Ordinary Course of Business, (ii) on fixtures and movable tangible property
located on the real property leased or subleased from such landlord, (iii) for
amounts not overdue for a period of more than 30 days without the commencement
of enforcement or foreclosure or that are being contested in good faith by
appropriate proceedings diligently conducted and (iv) for which adequate
reserves or other appropriate provisions are maintained on the books of such
Person in accordance with GAAP;
     (g) Liens arising from precautionary uniform commercial code financing
statements filed under any lease permitted by this Agreement;

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     (h) licenses (including, without limitation, licenses granted by a Group
Member with respect to its Intellectual Property), sublicenses, leases or
subleases granted to third parties in the Ordinary Course of Business not
interfering with the business of the Group Members;
     (i) Liens in favor of collecting banks arising under Section 4-210 of the
UCC;
     (j) Liens (including the right of set-off) in favor of a bank or other
depository institution arising as a matter of law encumbering deposits, or Liens
that are contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of
Indebtedness or (ii) relating to pooled deposit, automatic clearing house or
sweep accounts of the Group Members to permit satisfaction of overdraft or
similar obligations incurred in the Ordinary Course of Business of the Group
Members;
     (k) Liens arising out of consignment or similar arrangements for the sale
of goods entered into by Group Member in the Ordinary Course of Business;
     (l) Liens in favor of customs and revenue authorities arising as a matter
of law that secure payment of customs duties in connection with the importation
of goods of any Group Member in the Ordinary Course of Business;
     (m) Liens (i) on cash earnest money deposits in favor of the seller of any
Property to be acquired in an Investment permitted pursuant to Section 8.3 to be
applied against the purchase price for such Investment and (ii) consisting of an
agreement to sell, transfer, lease or otherwise dispose of any Property in a
transaction permitted under Section 8.4 and affecting only the Property that is
the subject of such agreement, in each case, solely to the extent such
Investment or sale, disposition, transfer or lease would have been permitted on
the date of the creation of such Lien;
     (n) Liens that are in the nature of (i) a common law or statutory right of
set-off arising solely by operation of applicable law, or (ii) a right of
set-off, relating to purchase orders and other agreements entered into with
customers of the Group Members in the Ordinary Course of Business (except to the
extent such Lien was waived or subordinated to the Obligations pursuant to the
terms of the applicable Contractual Obligations or any amendment thereto);
     (o) Liens on an insurance policy and the proceeds thereof securing the
financing of the insurance premiums payable with respect to such policy; and
     (p) the title and interest of a lessor or sublessor in and to personal
property leased or subleased (other than through a Capital Lease), in each case
extending only to such personal property.
     “Default” means any Event of Default and any event that, with the passing
of time or the giving of notice or both, would become an Event of Default.
     “Designated IPO Proceeds Amount” means $19,500,000, which represents the
Net Cash Proceeds from the Holdings IPO available to fund the transactions
permitted under Section 8.5(h) and Sections 8.9(j) and (k).
     “Designated Purchaser” means that Purchaser which, together with its
Affiliates, holds the greatest percentage of the outstanding principal amount of
the Notes.

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     “Disclosure Documents” means, collectively, (a) all confidential
information memoranda and related materials prepared in connection with the
syndication of the Senior Credit Facilities and (b) all other documents filed by
any Group Member with the United States Securities and Exchange Commission.
     “Discounted Value” means, with respect to the Called Notes, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such
Called Notes from their respective scheduled due dates to the redemption date
with respect to such Called Notes in accordance with accepted financial practice
and at a discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with respect
to such Called Notes.
     “Dollars” and the sign “$” each mean the lawful money of the United States
of America.
     “Domestic Person” means any “United States person” as defined in
Section 7701(a)(30) of the Code.
     “E-Fax” means any system used to receive or transmit faxes electronically.
     “E-Signature” means the process of attaching to or logically associating
with an Electronic Transmission an electronic symbol, encryption, digital
signature or process (including the name or an abbreviation of the name of the
party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept such Electronic Transmission.
     “E-System” means any electronic system, including Intralinks® and ClearPar®
and any other Internet or extranet-based site, whether such electronic system is
owned, operated or hosted by the Senior Agent, any of its Related Persons or any
other Person, providing for access to data protected by passcodes or other
security system.
     “Electronic Transmission” means each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
     “Environmental Laws” means all Requirements of Law and Permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health and safety (to the extent related to Releases,
Remedial Action or protection from or exposure to Hazardous Material), the
environment and natural resources, including CERCLA, the SWDA, the Hazardous
Materials Transportation Act (49 U.S.C. §§ 5101 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.), the Toxic
Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean Air Act (42 U.S.C.
§§ 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.), the
Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all regulations
promulgated under any of the foregoing, all analogous Requirements of Law and
Permits and any environmental transfer of ownership notification or approval
statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann. §§ 13:1K-6
et seq.).
     “Environmental Liabilities” means all Liabilities (including costs of
Remedial Actions, natural resource damages and costs and expenses of
investigation and feasibility studies) that may be imposed on, incurred by or
asserted against any Group Member as a result of, or related to,

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any claim, suit, action, investigation, proceeding or demand by any Person,
whether based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute or common law or otherwise, arising under any
Environmental Law or in connection with any environmental, health or safety
condition or with any Release and resulting from the ownership, lease, sublease
or other operation or occupation of property by any Group Member, whether on,
prior to or after the date hereof.
     “ERISA” means the United States Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
     “ERISA Affiliate” means, collectively, any Group Member, and any Person
under common control, or treated as a single employer, with any Group Member,
within the meaning of Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
     “ERISA Event” means any of the following: (a) a reportable event described
in Section 4043 of ERISA (as to which the PBGC has not waived, under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043, the requirement of
Section 4043(a) of ERISA that it be notified of such event) with respect to a
Title IV Plan, (b) the withdrawal of any ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA, (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan, (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA, or the receipt by any ERISA Affiliate
of any notice, that any Multiemployer Plan is in endangered or critical status
under Section 305 of ERISA, (e) the filing of a notice of intent to terminate a
Title IV Plan (or treatment of a plan amendment as termination) under
Section 4041 of ERISA, (f) the institution of proceedings to terminate a Title
IV Plan or a Multiemployer Plan by the PBGC, (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due, there
being or arising any “unpaid minimum required contribution” or “accumulated
funding deficiency” (as defined or otherwise set forth in Section 4971 of the
Code or Part 3 of Subtitle B of Title 1 of ERISA) with respect to a
Multiemployer Plan or a Title IV Plan (whether or not waived), the filing of any
request for or receipt of a minimum funding waiver under Section 412 of the Code
with respect to any Benefit Plan, or that such filing may be reasonably be
expected to be made, or a determination that any Title IV Plan is, or is
reasonably expected to be, in at-risk status under Title IV of ERISA; (h) the
imposition of a lien under Section 430 of the Code or Section 303 or 4068 of
ERISA on any property (or rights to property, whether real or personal) of any
ERISA Affiliate, (i) the failure of a Benefit Plan or any trust thereunder
intended to qualify for tax exempt status under Section 401 or 501 of the Code
or other Requirements of Law to qualify thereunder; and (j) engaging in a
non-exempt prohibited transaction within the meaning of Section 4975 of the Code
or Section 406 of ERISA; and (k) any other event or condition that might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or for the imposition of any liability upon any ERISA
Affiliate under Title IV of ERISA, other than for PBGC premiums due but not
delinquent.
     “Event of Default” has the meaning specified in Section 9.1.
     “Excess Availability” means, at any time, the remainder of (a) the
aggregate Revolving Credit Commitments of the lenders under the Senior Credit
Agreement less (b) the aggregate amount of the Revolving Senior Loans
outstanding.

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

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     (x) cash payments of fees and expenses related to the Related Transactions
and paid prior to the end of the Fiscal Year ending December 31, 2011 as set
forth in reasonable detail in any such applicable Compliance Certificate in an
aggregate amount not to exceed $14,000,000;
     (xi) to the extent added back in calculating Consolidated EBITDA pursuant
to clause (b)(x) of the definition thereof, any unusual or non-recurring cash
losses, cash charges or cash expenses, including severance and restructuring
costs, related to Permitted Acquisitions or Permitted Indebtedness (regardless
of when paid) or equity issuances of Stock or Stock Equivalents permitted
hereunder (excluding any equity issuances in connection with the Exchange Offer
or the Holdings IPO) as set forth in reasonable detail in any such applicable
Compliance Certificate; and
     (xii) to the extent added back in calculating Consolidated EBITDA pursuant
to clause (b)(xi) of the definition thereof, costs of legal proceedings and
settlements with respect to those matters disclosed in Item 3 of MedQuist’s
Annual Report on Form 10-K as of December 31, 2009 filed on March 12, 2010 in an
aggregate amount not to exceed $5,000,000;
     (c) plus, without duplication,
     (i) to the extent included in the calculation of Consolidated EBITDA
pursuant to clause (b)(i) of the definition thereof, any provision for United
States federal income taxes or other taxes measured by net income;
     (ii) to the extent the calculation of Excess Cash Flow is based on the
Consolidated EBITDA of MedQuist rather than Holdings, the total amount of cash
payments made by MedQuist or its Subsidiaries to Holdings or its Subsidiaries
(other than MedQuist and its Subsidiaries) in excess of (x) payments required to
be made under the CBay Transcription Agreements and (y) up to $2,000,000 of
payments made pursuant to the CBay Management Agreement;
     (iii) any decrease in the Working Capital of such Person during such period
(measured as the excess of such Working Capital at the beginning of such period
over such Working Capital at the end thereof).
     “Exchange Offer” means one or more transactions in which shareholders of
MedQuist other than CBay exchange their Stock of MedQuist for shares of common
stock of Holdings, cash or a combination of such shares and cash.
     “Excluded Foreign Subsidiary” means any Subsidiary that is not a Domestic
Person unless (i) such Subsidiary has granted a Lien on any of its property as
collateral for, or incurred any Guaranty Obligations with respect to, any
Indebtedness of any Note Party (other than Obligations) or (ii) more than 65% of
the Voting Stock of such Subsidiary has been pledged as collateral for any such
Indebtedness.
     “Excluded Taxes” has the meaning specified in Section 2.17.
     “Existing Agent” means General Electric Capital Corporation, in its
capacity as administrative agent under the Existing Credit Agreement.

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     “Existing Credit Agreement” means that certain Credit Agreement, dated as
of April 22, 2010, among MedQuist, MedQuist Transcriptions, the institutions
party thereto as lenders and issuers and the Existing Agent.
     “Existing Subordinated Note” means that certain Subordinated Promissory
Note, dated July 30, 2010, in the amount of $17,500,000 issued by MedQuist
Transcriptions to Black Horse Capital LP, Black Horse Capital (QP) LP, and Black
Horse Capital Master Fund Ltd.
     “Federal Flood Insurance” means Federally backed Flood Insurance available
under the National Flood Insurance Program to owners of real property
improvements located in Special Flood Hazard Areas in a community participating
in the National Flood Insurance Program.
     “FEMA” means the Federal Emergency Management Agency, a component of the
U.S. Department of Homeland Security that administers the National Flood
Insurance Program.
     “Financial Statement” means each financial statement delivered pursuant to
Section 4.4 or 6.1.
     “Fiscal Quarter” means each three (3) fiscal month period ending on
March 31, June 30, September 30 or December 31.
     “Fiscal Year” means each twelve fiscal month period ending on December 31.
     “Flood Insurance” means, for any real property located in a Special Flood
Hazard Area, Federal Flood Insurance or private insurance that meets the
requirements set forth by FEMA in its Mandatory Purchase of Flood Insurance
Guidelines. Flood Insurance shall be in an amount equal to the full, unpaid
balance of the Notes and any prior liens on the real property up to the maximum
policy limits set under the National Flood Insurance Program, or as otherwise
required by the Senior Agent, with deductibles not to exceed $50,000.
     “Funding Date” means the date on which the Issuers sell and the initial
Purchasers purchase the Notes pursuant to this Agreement.
     “GAAP” means generally accepted accounting principles in the United States
of America, as in effect from time to time, set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, in the statements and pronouncements of the
Financial Accounting Standards Board and in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession that are applicable to the circumstances as of the date of
determination. Subject to Section 1.3, all references to “GAAP” shall be to GAAP
applied consistently with the principles used in the preparation of the
Financial Statements described in Section 4.4(a).
     “Governmental Authority” means any nation, sovereign or government, any
state or other political subdivision thereof, any agency, authority or
instrumentality thereof and any entity or authority exercising executive,
legislative, taxing, judicial, regulatory or administrative functions of or
pertaining to government, including any central bank, stock exchange, regulatory
body, arbitrator, public sector entity, supra-national entity (including the
European Union and the European Central Bank) and any self-regulatory
organization (including the National Association of Insurance Commissioners).

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     “Governmental Payor Programs” means all governmental third party payor
programs in which any Group Member participates, including, without limitation,
Medicare, Medicaid, TRICARE or any other federal or state health care programs.
     “Group Members” means, collectively, Holdings and its Subsidiaries.
     “Group Members’ Accountants” means KPMG LLP or other nationally-recognized
independent registered certified public accountants reasonably acceptable to the
Required Purchasers.
     “Guarantor(s)” has the meaning specified in the recitals.
     “Guaranty Agreement” means that certain Guaranty Agreement dated as of the
date hereof, among the Purchasers, the Issuers and the Guarantors from time to
time party thereto.
     “Guaranty Obligation” means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person for any
Indebtedness, lease, dividend or other obligation (the “primary obligation”) of
another Person (the “primary obligor”), if the purpose or intent of such Person
in incurring such liability, or the economic effect thereof, is to guarantee
such primary obligation or provide support, assurance or comfort to the holder
of such primary obligation or to protect or indemnify such holder against loss
with respect to such primary obligation, including (a) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the Ordinary
Course of Business), co-making, discounting with recourse or sale with recourse
by such Person of any primary obligation, (b) the existence of any Lien, or any
right, contingent or otherwise, to receive a Lien, on the property of such
Person securing any part of any primary obligation and (c) any liability of such
Person for a primary obligation through any Contractual Obligation (contingent
or otherwise) or other arrangement (i) to purchase, repurchase or otherwise
acquire such primary obligation or any security therefor or to provide funds for
the payment or discharge of such primary obligation (whether in the form of a
loan, advance, stock purchase, capital contribution or otherwise), (ii) to
maintain the solvency, working capital, equity capital or any balance sheet
item, level of income or cash flow, liquidity or financial condition of any
primary obligor, (iii) to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party to any Contractual Obligation,
(iv) to purchase, sell or lease (as lessor or lessee) any property, or to
purchase or sell services, primarily for the purpose of enabling the primary
obligor to satisfy such primary obligation or to protect the holder of such
primary obligation against loss or (v) to supply funds to or in any other manner
invest in, such primary obligor (including to pay for property or services
irrespective of whether such property is received or such services are
rendered); provided, however, that “Guaranty Obligations” shall not include
(x) endorsements for collection or deposit in the Ordinary Course of Business
and (y) product warranties given in the Ordinary Course of Business. The
outstanding amount of any Guaranty Obligation shall equal the outstanding amount
of the primary obligation so guaranteed or otherwise supported or, if lower, the
stated maximum amount for which such Person may be liable under such Guaranty
Obligation.
     “Hazardous Material” means any substance, material or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including petroleum or any fraction thereof,
asbestos, polychlorinated biphenyls and radioactive substances.

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     “Health Care Laws” means, collectively, any and all federal, state or local
laws, rules, regulations, manuals, orders, ordinances, statutes, guidelines and
requirements issued with respect to regulatory matters relating to the
provision, administration, and/or payment for healthcare products or services,
including, without limitation, to the extent applicable, rules and regulations
governing the operation and administration of Medicare, Medicaid or any other
Government Payor Program, HIPAA, any and all federal, state and local fraud and
abuse laws of any Governmental Authority, including, without limitation, the
federal Anti-Kickback Statute (42 U.S.C. § 1320a-7(b)), the Stark Law (42 U.S.C.
§ 1395nn and § 1395(q)), the civil False Claims Act (31 U.S.C. § 3729 et seq.),
and rules and regulations of the U.S. Food and Drug Administration, as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto.
     “Hedging Agreement” means any Interest Rate Contract, foreign exchange,
swap, option or forward contract, spot, cap, floor or collar transaction, any
other derivative instrument and any other similar transaction and any other
similar agreement or arrangement designed to alter the risks of any Person
arising from fluctuations in any underlying variable.
     “HIPAA” means the Health Insurance Portability and Accountability Act of
1996, as the same may be amended, modified or supplemented from time to time,
any successor statute thereto, any and all rules or regulations promulgated from
time to time thereunder, and any comparable state laws.
     “HIPAA Compliance Plan” has the meaning specified in Section 4.23.
     “Holding Company” means any Person that (i) is an Affiliate of a Permitted
Investor, (ii) is a direct or indirect holder of Stock of Holdings and
(iii) owns no substantial assets other than such Stock.
     “Holdings” has the meaning specified in the preamble.
     “Holdings IPO” means one or more sales by Holdings of its Stock after the
Closing Date pursuant to one or more underwritten public offerings pursuant to
an effective registration statement filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, provided that the Net Cash
Proceeds of the first such offering are at least equal to the Designated IPO
Proceeds Amount.
     “Indebtedness” of any Person means, without duplication, any of the
following, whether or not matured: (a) all indebtedness for borrowed money,
(b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement and other obligations with respect to
(i) letters of credit, bank guarantees or bankers’ acceptances or (ii) surety,
customs, reclamation or performance bonds (in each case not related to judgments
or litigation) other than those entered into in the Ordinary Course of Business,
(d) all obligations to pay the deferred purchase price of property or services,
other than trade payables incurred in the Ordinary Course of Business, (e) all
obligations created or arising under any conditional sale or other title
retention agreement, regardless of whether the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property, (f) all Capitalized Lease Obligations,
(g) all obligations, whether or not contingent, to purchase, redeem, retire,
defease or otherwise acquire for value any of its own Stock or Stock Equivalents
(or any Stock or Stock Equivalent of a direct or indirect parent entity thereof)
prior to the date that is 180 days after October 15, 2016, valued at, in the
case of redeemable preferred Stock, the greater of

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the voluntary liquidation preference and the involuntary liquidation preference
of such Stock plus accrued and unpaid dividends, (h) all net payments that would
be required to be made in respect of any Hedging Agreement in the event of a
termination (including an early termination) on the date of determination and
(i) all Guaranty Obligations for obligations of any other Person constituting
Indebtedness of such other Person; provided, however, that the items in each of
clauses (a) through (i) above shall constitute “Indebtedness” of such Person
solely to the extent (x) such Person is liable for such item or (y) any such
item is secured by a Lien on such Person’s property.
     “Indemnified Matters” has the meaning specified in Section 11.4.
     “Indemnitee” has the meaning specified in Section 11.4.
     “Initial Projections” means those financial projections covering the Fiscal
Years ending in 2010 through 2015 and delivered to the Purchasers by the Issuer
Representative on August 22, 2010.
     “Intellectual Property” means all rights, title and interests in or
relating to intellectual property and industrial property arising under any
Requirement of Law and all IP Ancillary Rights relating thereto, including all
Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP
Licenses.
     “Interest Payment Date” has the meaning specified in Section 2.7(a).
     “Interest Rate Contracts” means all interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and interest rate
insurance.
     “Internet Domain Names” means all rights, title and interests (and all
related IP Ancillary Rights) arising under any Requirement of Law in or relating
to Internet domain names.
     “Investment” means, with respect to any Person, (a) to own, purchase or
otherwise acquire, in each case whether beneficially or otherwise, any
investment in, including any interest in, any Security of any other Person
(other than any evidence of any Obligation), (b) to purchase or otherwise
acquire, whether in one transaction or in a series of transactions, all or a
significant part of the property of any other Person or a business conducted by
any other Person or all or substantially all of the assets constituting the
business of a division, branch, brand or other unit operation of any other
Person, (c) to incur, or to remain liable under, any Guaranty Obligation for
Indebtedness of any other Person, to assume the Indebtedness of any other Person
or to make, hold, purchase or otherwise acquire any deposit, loan, advance,
commitment to lend or advance, or other extension of credit, excluding deposits
with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable and similar items created in the Ordinary Course
of Business or (d) to make any contribution to the capital of any other Person;
provided, however, that for purposes of Section 8.3(e) and 8.4(b), (i) any
purchase of any property by any Person for more than fair market value shall
constitute an Investment in the seller of such property by such Person to the
extent of such excess over such fair market value and (ii) any Sale of any
property by any Person for less than fair market value shall constitute an
Investment in the purchaser of such property by such Person to the extent of
such deficiency below such fair market value.

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     “IP Ancillary Rights” means, with respect to any other Intellectual
Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of, such Intellectual Property and all income,
royalties, proceeds and Liabilities at any time due or payable or asserted under
or with respect to any of the foregoing or otherwise with respect to such
Intellectual Property, including all rights to sue or recover at law or in
equity for any past, present or future infringement, misappropriation, dilution,
violation or other impairment thereof, and, in each case, all rights to obtain
any other IP Ancillary Right.
     “IP License” means all Contractual Obligations (and all related IP
Ancillary Rights), whether written or oral, granting any right title and
interest in or relating to any Intellectual Property.
     “IRS” means the Internal Revenue Service of the United States and any
successor thereto.
     “Issuer” has the meaning set forth in the preamble.
     “Issuer Representative” has the meaning specified in Section 2.19.
     “Junior Subordinated Debt” means any Indebtedness that is subordinated to
the payment in full of the Obligations on terms and conditions satisfactory to
the Required Purchasers.
     “Lehman” means Lehman Brothers Commercial Corporation Asia.
     “Letter of Credit” means any letter of credit Issued pursuant to the Senior
Credit Agreement.
     “Liabilities” means all claims, actions, suits, judgments, damages, losses,
liability, obligations, responsibilities, fines, penalties, sanctions, costs,
fees, Taxes, commissions, charges, disbursements and expenses, in each case of
any kind or nature (including interest accrued thereon or as a result thereto
and fees, charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.
     “Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral
assignment, charge, encumbrance, easement, lien (statutory or other), or
preference, priority or other security interest or preferential arrangement in
the nature of a lien, including any conditional sale contract or other title
retention agreement, any assignment of any right to receive income or profits,
the interest of a lessor under a Capital Lease and any synthetic or other
financing lease having substantially the same economic effect as any of the
foregoing (but not the interest of a lessor under an operating lease).
     “Liquidity” means Excess Availability plus cash and Cash Equivalents of
Holdings and its Subsidiaries.
     “Make-Whole Amount” means an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Notes over such Called Notes; provided that the Make-Whole Amount may in no
event be less than zero.

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     “Material Adverse Effect” means (a) a material adverse change in the
financial condition, business, operations or property of the Group Members,
taken as a whole, (b) material impairment of the ability of the Note Parties
(taken as a whole) to perform in any material respect their obligations under
the Note Documents and (c) a material adverse effect upon the validity or
enforceability of the Agreement, Guaranty Agreement or the other Note Documents
taken as a whole or the rights and remedies of the Purchasers under the Note
Documents.
     “Material Agreement” means the agreements between (i) any Group Member and
Multimodal Technologies, Inc., and (ii) MedQuist Inc. or any of its Subsidiaries
and Nuance Communications, Inc., together with any amendments, modifications and
replacements of any such Material Agreements permitted hereby; provided,
however, that “Material Agreements” shall not include that certain Dictaphone
Corporation Maintenance Plan, dated on or about May 18, 2004, between
HealthScribe, Inc. and Dictaphone Corporation.
     “Maturity Date” means October 15, 2016.
     “Maximum Accrual” has the meaning specified in Section 2.8.
     “Maximum Lawful Rate” has the meaning specified in Section 2.7(c).
     “Maximum Senior Principal Amount” has the meaning set forth in the
Subordination Agreement.
     “Medicaid” means, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and
any statutes succeeding thereto, and all laws, rules, regulations, manuals,
orders, or requirements pertaining to such program, including (a) all federal
statutes affecting such program; (b) all state statutes and plans for medical
assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative,
reimbursement, and requirements of all government authorities promulgated in
connection with such program (whether or not having the force of law), in each
case as the same may be amended, supplemented or otherwise modified from time to
time.
     “Medicare” means, collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, or orders pertaining to such program including (a) all
federal statutes (whether set forth in Title XVIII of the Social Security Act or
elsewhere) affecting such program; and (b) all applicable provisions of all
rules, regulations, manuals, orders and administrative, reimbursement and
requirements of all governmental authorities promulgated in connection with such
program (whether or not having the force of law), in each case as the same may
be amended, supplemented or otherwise modified from time to time.
     “MedQuist” has the meaning specified in the preamble.
     “MedQuist Consolidation Date” means the earlier of (a) December 31, 2013 or
(b) the date upon which Holdings owns, directly or indirectly, 100% of the Stock
of MedQuist.
     “MedQuist Transcriptions” has the meaning specified in the preamble.

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     “Moody’s” means Moody’s Investors Service, Inc.
     “Multiemployer Plan” means any multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise
has any obligation or liability, contingent or otherwise.
     “National Flood Insurance Program” means the program created by the U.S.
Congress pursuant to the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as revised by the National Flood Insurance
Reform Act of 1994, that mandates the purchase of flood insurance to cover real
property improvements located in Special Flood Hazard Areas in participating
communities and provides protection to property owners through a Federal
insurance program.
     “Net Cash Proceeds” means proceeds received in cash, checks or other cash
equivalent financial instruments (including Cash Equivalents) from (a) any Sale
of, or Property Loss Event with respect to, property, net of (i) the customary
out-of-pocket cash costs, fees and expenses paid or required to be paid in
connection therewith, (ii) taxes paid or reasonably estimated to be payable as a
result thereof, (iii) any amount required to be paid or prepaid on Indebtedness
(other than the Obligations and Indebtedness owing to any Group Member) secured
by the property subject thereto and (iv) any applicable amounts required to be
held in escrow until such time as such amounts are released from escrow,
whereupon such amounts shall be considered Net Cash Proceeds or (b) any sale or
issuance of Stock or incurrence of Indebtedness, in each case net of brokers’,
advisors’ and investment banking fees and other customary out-of-pocket
underwriting discounts, commissions and other customary out-of-pocket cash
costs, fees and expenses (including costs and expenses of legal counsel), in
each case incurred in connection with such transaction; provided, however, that
any such proceeds received by any Group Member that is not a Wholly Owned
Subsidiary of Holdings shall constitute “Net Cash Proceeds” only to the extent
of the aggregate direct and indirect beneficial ownership interest of Holdings
therein.
     “Non-Excluded Taxes” has the meaning specified in Section 2.17.
     “Non-U.S. Purchaser Party” means each Purchaser, in each case that is not a
Domestic Person.
     “Note” means a promissory note issued jointly and severally by the Issuers,
in substantially the form of Exhibit B, payable to the order of a Purchaser in a
principal amount equal to the amount of such Purchaser’s Commitment.
     “Note Documents” means, collectively, this Agreement, any Notes when
issued, the Guaranty Agreement, the Subordination Agreement, and, when executed,
each document executed by a Note Party and delivered to the Purchasers in
connection with or pursuant to any of the foregoing or the Obligations, together
with any modification of any term, or any waiver with respect to, any of the
foregoing.
     “Note Party” means each Issuer and each Guarantor.
     “Obligations” means, with respect to any Note Party, all amounts,
obligations, liabilities, covenants and duties of every type and description
owing by such Note Party arising out of, under or in connection with any Note
Document, (regardless of whether acquired by assignment), absolute or
contingent, due or to become due, whether liquidated or not, now existing or
hereafter

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arising and however acquired, and whether or not evidenced by any instrument or
for the payment of money, including, without duplication, (a) if such Note Party
is an Issuer, all Notes, (b) all interest, whether or not accruing after the
filing of any petition in bankruptcy or after the commencement of any
insolvency, reorganization or similar proceeding, and whether or not a claim for
post-filing or post-petition interest is allowed in any such proceeding, and
(c) all other fees, expenses (including fees, charges and disbursement of
counsel), interest, commissions, charges, costs, disbursements, indemnities and
reimbursement of amounts paid and other sums to the extent chargeable to such
Note Party under any Note Document.
     “Ordinary Course of Business” means, in respect of any transaction
involving any Group Member, the ordinary course of such Person’s business, as
undertaken by such Person in good faith.
     “Other Taxes” has the meaning specified in Section 2.17(c).
     “Participant Register” has the meaning specified in Section 11.2(f).
     “Patents” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to letters
patent and applications therefor.
     “Patriot Act” has the meaning specified in Section 11.21.
     “PBGC” means the United States Pension Benefit Guaranty Corporation and any
successor thereto.
     “Pennant” has the meaning set forth in the preamble.
     “Permit” means, with respect to any Person, any permit, approval,
authorization, license, registration, certificate, concession, grant, franchise,
variance or permission from, and any other Contractual Obligations with, any
Governmental Authority, in each case whether or not having the force of law and
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
     “Permitted Acquisition” means any Proposed Acquisition satisfying each of
the following conditions: (a) the aggregate amounts payable in connection with,
and other consideration for (in each case, including all transaction costs and
all Indebtedness, liabilities and Guaranty Obligations incurred or assumed in
connection therewith or otherwise reflected in a Consolidated balance sheet of
Holdings and the Proposed Acquisition Target), such Proposed Acquisition and all
other Permitted Acquisitions consummated on or prior to the date of the
consummation of such Proposed Acquisition shall not exceed (i) $25,000,000 in
the aggregate in any Fiscal Year or $75,000,000 in the aggregate during the term
of this Agreement plus (ii) Additional Available Cash as of the date of
consummation of such Proposed Acquisition plus (iii) $50,000,000 in the
aggregate during the term of this Agreement in the form of shares of common
stock of Holdings issued in connection with such Proposed Acquisition, (b) the
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

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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.
     “Permitted Indebtedness” means any Indebtedness of any Group Member that is
permitted in Section 8.1.
     “Permitted Investment” means any Investment of any Group Member that is
permitted in Section 8.3.
     “Permitted Investors” means, collectively, Sponsor, and any limited
partners, operating partners or Affiliates of any of the foregoing.
     “Permitted Lien” means any Lien on or with respect to the property of any
Group Member that is permitted in Section 8.2.
     “Permitted Refinancing” means Indebtedness constituting a refinancing or
extension of Permitted Indebtedness that (a) has an aggregate outstanding
principal amount not greater than the aggregate principal amount of such
Permitted Indebtedness outstanding at the time of such refinancing or extension,
(b) has a weighted average maturity (measured as of the date of such refinancing
or extension) and maturity no shorter than that of such Permitted Indebtedness,
(c) is not entered into as part of a Sale and Leaseback transaction, (d) is not
secured by any property or any Lien other than those securing such Permitted
Indebtedness and (e) is otherwise on terms (other than market based interest
rates, discounts and fees at the time of refinancing) no less favorable to the
Group Members, taken as a whole, than those of such Permitted Indebtedness;
provided, however, that, notwithstanding the foregoing, (x) the terms of such
Permitted Indebtedness may be modified as part of such Permitted Refinancing if
such modification would have been permitted pursuant to Section 8.11 and (y) no
Guaranty Obligation for such Indebtedness shall constitute part of such
Permitted Refinancing unless similar Guaranty Obligations with respect to such
Permitted Indebtedness existed and constituted Permitted Indebtedness prior to
such refinancing or extension.
     “Permitted Reinvestment” means, with respect to the Net Cash Proceeds of
any Sale or Property Loss Event, to acquire (or make Capital Expenditures to
finance the acquisition, repair, improvement or construction of), to the extent
otherwise permitted hereunder, property useful in the business of the Group
Members, as determined in good faith by the Issuers (including through a
Permitted Acquisition) or, if such Property Loss Event involves loss or damage
to property, to repair such loss or damage.
     “Person” means any individual, partnership, corporation (including a
business trust and a public benefit corporation), joint stock company, estate,
association, firm, enterprise, trust, limited liability company, unincorporated
association, joint venture and any other entity or Governmental Authority.

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     “PIK Interest” has the meaning specified in Section 2.7(a).
     “PIK Rate” has the meaning specified in Section 2.7(a).
     “Pro Forma Balance Sheet” has the meaning specified in Section 4.4(d).
     “Pro Forma Basis” means, with respect to any determination for any period
and any Pro Forma Transaction, that such determination shall be made by giving
pro forma effect to each such Pro Forma Transaction, as if each such Pro Forma
Transaction had been consummated on the first day of such period, based on
historical results accounted for in accordance with GAAP and, to the extent
applicable, reasonable assumptions that are specified in reasonable detail in
the relevant Compliance Certificate, Financial Statement or other document
provided to the Purchasers in connection herewith in accordance with
Regulation S-X of the Securities Act of 1933; provided that non-Regulation S-X
adjustments approved by the Designated Purchaser in writing may also be made to
reflect operating expense reductions and other operating improvements or
synergies or cost savings reasonably expected to result from such Pro Forma
Transaction, which adjustments are reasonably anticipated by the Issuers to be
realizable in connection with such Pro Forma Transaction and are estimated on a
good faith basis by the Issuers.
     “Pro Forma Transaction” means any transaction consummated as part of any
Permitted Acquisition or any Sale of Property permitted under Sections 8.4(k) or
(l), together with each other transaction relating thereto and consummated in
connection therewith, including any incurrence or repayment of Indebtedness.
     “Projections” means, collectively, the Initial Projections and the
projections delivered pursuant to Section 6.1(f).
     “Property” means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
     “Property Loss Event” means, with respect to any property, any loss of or
damage to such property or any taking of such property or condemnation thereof.
     “Proposed Acquisition” means (a) any proposed acquisition of all or
substantially all of the assets or Stock of any Proposed Acquisition Target by
any Issuer or any Subsidiary of an Issuer that is consensual and approved by the
board of directors of such Proposed Acquisition Target or the Person that owns
such Proposed Acquisition Target, or (b) any proposed merger of any Proposed
Acquisition Target with or into any Issuer or any Subsidiary of an Issuer (and,
in the case of a merger with an Issuer or Holdings, with such Issuer or Holdings
being the surviving corporation).
     “Proposed Acquisition Target” means any Person or any brand, line of
business, division, branch, operating division or other unit operation of any
Person.
     “Pro Rata Outstandings”, of any Purchaser at any time, means the
outstanding principal amount of the Notes owing to such Purchaser.
     “Pro Rata Share” means, with respect to any Purchaser, the percentage
obtained by dividing (a) the outstanding principal amount of the Notes held by
such Purchaser by (b) the aggregate outstanding principal amount of the Notes
held by all Purchasers.

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     “Purchase Price” has the meaning specified in Section 2.2.
     “Purchaser(s)” has the meaning set forth in the preamble.
     “RCM Sale” means a Sale of the revenue cycle management services Subsidiary
which was disclosed to the Administrative Agent on or before the Closing Date.
     “Recapitalization Dividend” means a dividend or distribution paid by
MedQuist to the holders of its outstanding shares of Stock in the aggregate
amount of up to $177,000,000, allocated ratably to such shareholders.
     “Redemption Offer” has the meaning specified in Section 2.6(c).
     “Redemption Price” has the meaning specified in Section 2.6(b).
     “Reinvestment Yield” means, with respect to the Called Notes, 0.50% over
the yield to maturity implied by (a) the yields reported, as of 10:00 A.M. (New
York City time) on the second Business Day preceding the redemption date with
respect to such Called Notes, on display designated as Page “PX1” on the
Bloomberg Financial Market Service (or such other display as may replace Page
PX1 on the Bloomberg Financial Market Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Notes as of such redemption date, or (b) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity
Series Yields reported, for the last day for which such yields have been so
reported as of the second Business Day preceding the redemption date with
respect to such Called Notes, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Notes as of such redemption date. Such implied yield will be
determined, if necessary, by (i) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(ii) interpolating lineary between (1) the actively traded U.S. Treasury
security with the published maturity closest to and greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
published maturity closes to and less than the Remaining Average Life.
     “Register” has the meaning specified in Section 2.12(b).
     “Related Documents” means, collectively, the Senior Loan Documents and each
other document executed with respect thereto or with respect to any Related
Transaction.
     “Related Person” means, with respect to any Person, each Affiliate of such
Person and each director, officer, employee, agent, trustee, representative,
attorney, accountant and each insurance, environmental, legal, financial and
other advisor (including those retained in connection with the satisfaction or
attempted satisfaction of any condition set forth in Article 3) of or to such
Person or any of its Affiliates.
     “Related Transactions” means, collectively, the funding of the initial
Senior Loans and Letters of Credit pursuant to the Senior Loan Documents and the
application of the proceeds thereof in accordance with Section 7.9 of the Senior
Credit Agreement, the payment of the Recapitalization Dividend, the issuance of
the Notes on the Funding Date, the refinancing of the

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Existing Credit Agreement and Existing Subordinated Note, the execution and
delivery of all Related Documents and the payment of all related fees, costs and
expenses.
     “Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material into
or through the environment.
     “Remaining Average Life” means, with respect to any Called Notes, the
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (a) such Called Notes into (b) the sum of the products obtained by
multiplying (i) the principal component of each Remaining Scheduled Payment with
respect to such Called Notes by (ii) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the redemption date with
respect to such Called Notes and the scheduled due date of such Remaining
Scheduled Payment.
     “Remaining Scheduled Payments” means, all principal payments with respect
to the Called Notes and interest thereon that would be payable in cash at the
Cash Rate and due after the redemption date with respect to such Called Notes if
no redemption of such Called Notes were made prior to its scheduled due date.
     “Remedial Action” means all actions required to (a) clean up, remove, treat
or in any other way address any Hazardous Material in the indoor or outdoor
environment, (b) prevent or minimize any Release so that a Hazardous Material
does not migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care with respect to any
Hazardous Material.
     “Required Purchasers” means, at any time, Purchasers having at such time in
excess of 50% of the sum of the aggregate principal amount of Notes then
outstanding.
     “Requirements of Law” means, with respect to any Person, collectively, the
laws (statutory or common), treaties, rules and regulations, ordinances, orders,
other legal requirements of any Governmental Authority, in each case that are
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject, including without limitation all
Healthcare Laws.
     “Responsible Officer” means, with respect to any Person, any of the
president, chief executive officer, treasurer, assistant treasurer, controller,
managing member or general partner of such Person but, in any event, with
respect to financial matters, any such officer that is responsible for preparing
the Financial Statements delivered hereunder and, with respect to the Corporate
Chart and other documents delivered pursuant to Section 6.1(e), documents
delivered on the Closing Date and documents delivered pursuant to Section 7.10,
the secretary or assistant secretary of such Person or any other officer
responsible for maintaining the corporate and similar records of such Person.
     “Restricted Payment” means (a) any dividend or other distribution, whether
in cash, Securities or other property, on account of any Stock or Stock
Equivalent of any Group Member, in each case now or hereafter outstanding, and
(b) any redemption, retirement, termination, defeasance, cancellation, purchase
or other acquisition for value of any Stock or Stock Equivalent of any Group
Member, now or hereafter outstanding, and any payment or other transfer setting
aside funds for any such redemption, retirement, termination, cancellation,
purchase or other

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acquisition, and whether to a sinking fund, a similar fund or otherwise.
     “Revolving Credit Commitments” means, with respect to each Senior Lender,
the commitment of such Senior Lender to make Revolving Senior Loans and acquire
interests in other outstanding revolving credit, pursuant to and in accordance
with the Senior Credit Agreement.
     “Revolving Senior Loans” means revolving loans made by the Senior Lenders
to the Issuers pursuant to the Senior Credit Agreement.
     “S&P” means Standard & Poor’s Rating Services.
     “Sale and Leaseback Transaction” means, with respect to any Person (the
“obligor”), any Contractual Obligation or other arrangement with any other
Person (the “counterparty”) consisting of a lease by such obligor of any
property that, directly or indirectly, has been or is to be Sold by the obligor
to such counterparty or to any other Person to whom funds have been advanced by
such counterparty based on a Lien on, or an assignment of, such property or any
obligations of such obligor under such lease.
     “Security” means all Stock, Stock Equivalents, voting trust certificates,
bonds, debentures, instruments and other evidence of Indebtedness, whether or
not secured, convertible or subordinated, all certificates of interest, share or
participations in, all certificates for the acquisition of, and all warrants,
options and other rights to acquire, any Security.
     “Sell” means, with respect to any property, to sell, convey, transfer,
assign, license, lease or otherwise dispose of, any interest therein or to
permit any Person to acquire any such interest, including, in each case, through
a Sale and Leaseback Transaction or through a sale, factoring at maturity,
collection of or other disposal, with or without recourse, of any notes or
accounts receivable. Conjugated forms thereof and the noun “Sale” have
correlative meanings.
     “Senior Agent” means the “Administrative Agent” as defined in the Senior
Credit Agreement.
     “Senior Credit Agreement” means that certain Credit Agreement, dated as of
October 1, 2010, by and between the Note Parties, the Senior Agent and the
Senior Lenders, as amended, restated, supplemented, refinanced, replaced or
otherwise modified from time to time in accordance with the Subordination
Agreement.
     “Senior Credit Facilities” means the “Facilities” as defined in the Senior
Credit Agreement.
     “Senior Lenders” means the “Lenders” as defined in the Senior Credit
Agreement.
     “Senior Loans” means “Loans” as defined in the Senior Credit Agreement.
     “Senior Loan Documents” means the “Loan Documents” as defined in the Senior
Credit Agreement.

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     “Senior Loan Obligations” means the “Obligations” as defined in the Senior
Credit Agreement.
     “Solvent” means, with respect to any Person as of any date of
determination, that, as of such date, after giving effect to the rights of
contribution against other Note Parties set forth in Section 12.7 and in the
Guaranty Agreement, (a) the value of the assets of such Person (both at fair
value and present fair saleable value) is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person,
(b) such Person is able to pay all liabilities of such Person as such
liabilities mature and (c) such Person does not have unreasonably small capital.
In computing the amount of contingent or unliquidated liabilities at any time,
such liabilities shall be computed at the amount that, in light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
     “Special Flood Hazard Area” means an area that FEMA’s current flood maps
indicate has at least a one percent (1%) chance of a flood equal to or exceeding
the base flood elevation (a 100-year flood) in any given year.
     “Sponsor” means S.A.C. Private Capital Group, LLC, a Delaware limited
liability company.
     “Sponsor Affiliated Purchaser” means any Purchaser or Senior Lender that is
either the Sponsor or an Affiliate of the Sponsor (excluding its portfolio
companies).
     “Sponsor Consulting Agreement” means that certain Agreement, dated as of
August 19, 2008, by and among Holdings, S.A.C. PEI CB Investment II, LLC and
Lehman Brothers Commercial Corporation Asia.
     “Stock” means all shares of capital stock (whether denominated as common
stock or preferred stock), equity interests, beneficial, partnership or
membership interests, joint venture interests or other ownership or profit
interests in or equivalents (regardless of how designated) of or in a Person
(other than an individual), whether voting or non-voting.
     “Stock Equivalents” means all securities convertible into or exchangeable
for Stock or any other Stock Equivalent and all warrants, options or other
rights to purchase, subscribe for or otherwise acquire any Stock or any other
Stock Equivalent, whether or not presently convertible, exchangeable or
exercisable.
     “Subordination Agreement” means that certain Subordination and
Intercreditor Agreement, by and among the initial Purchasers and the Senior
Agent on behalf of the Senior Lenders, and acknowledged by Holdings and the
Issuers relating to the subordination of the Notes in the form of Exhibit E, as
such agreement shall be amended, modified, amended and restated or otherwise
changed from time to time in accordance with the terms hereof and thereof.
     “Subsidiary” means, with respect to any Person, any corporation,
partnership, joint venture, limited liability company, association or other
entity, the management of which is, directly or indirectly, controlled by, or of
which an aggregate of more than 50% of the outstanding Voting Stock is, at the
time, owned or controlled directly or indirectly by, such Person or one or more
Subsidiaries of such Person. Unless the context otherwise clearly requires,
references herein to a “Subsidiary” refer to a Subsidiary of Holdings.

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     “Subsidiary Guarantor” means each Subsidiary of Holdings that enters into
any Guaranty Obligations with respect to the Obligations pursuant to the
Guaranty Agreement or any other Agreement acceptable to the Required Purchasers.
     “SWDA” means the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.).
     “Tax Return” has the meaning specified in Section 4.8.
     “Taxes” has the meaning specified in Section 2.17(a).
     “THL” has the meaning set forth in the preamble.
     “Title IV Plan” means a pension plan subject to Title IV of ERISA, other
than a Multiemployer Plan, to which any ERISA Affiliate incurs or otherwise has
any obligation or liability, contingent or otherwise.
     “Trademarks” means all rights, title and interests (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, logos and other source
or business identifiers and, in each case, all goodwill associated therewith,
all registrations and recordations thereof and all applications in connection
therewith.
     “Trade Secrets” means all right, title and interest (and all related IP
Ancillary Rights) arising under any Requirement of Law in or relating to trade
secrets.
     “TRICARE” means, collectively, a program of medical benefits covering
former and active members of the uniformed services and certain of their
dependents, financed and administered by the United States Departments of
Defense, Health and Human Services and Transportation, and all laws applicable
to such programs.
     “UCC” means the Uniform Commercial Code of any applicable jurisdiction and,
if the applicable jurisdiction shall not have any Uniform Commercial Code, the
Uniform Commercial Code as in effect in the State of New York.
     “Unfunded Pension Liability” of any Title IV Plan shall mean the amount, if
any, by which, as of the date of the most recent financial statements reflecting
such amounts, the value of the accumulated plan benefits under the Title IV Plan
(based on assumptions used for purposes of Accounting Standards Codification
No. 715: Compensation-Retirement Benefits), exceeds the fair market value of all
plan assets allocable to such liabilities (excluding any accrued but unpaid
contributions).
     “United States” means the United States of America.
     “U.S. Purchaser Party” means each Purchaser, each SPV and each participant,
in each case that is a Domestic Person.
     “Voting Stock” means Stock of any Person having ordinary power to vote in
the election of members of the board of directors, managers or equivalent
governing body of such Person (irrespective of whether, at the time, Stock of
any other class or classes of such entity shall have or might have voting power
by reason of the occurrence of any contingency).

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     “Wholly Owned Subsidiary” of any Person means any Subsidiary of such
Person, all of the Stock of which (other than nominal holdings and director’s
qualifying shares) is owned by such Person, either directly or through one or
more Wholly Owned Subsidiaries of such Person.
     “Withdrawal Liability” means, at any time, any liability incurred (whether
or not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.
     “Working Capital” means, for any Person at any date, its Consolidated
Current Assets at such date minus its Consolidated Current Liabilities at such
date.
          Section 1.2 UCC Terms. The following terms have the meanings given to
them in the applicable UCC: “account”, “commodity account”, “commodity
contract”, “commodity intermediary”, “deposit account”, “entitlement holder”,
“entitlement order”, “equipment”, “financial asset”, “general intangible”,
“goods”, “instruments”, “inventory”, “securities account”, “securities
intermediary” and “security entitlement”.
               Section 1.3 Accounting Terms and Principles.
          (a) GAAP. All accounting determinations required to be made pursuant
hereto shall, unless expressly otherwise provided herein, be made in accordance
with GAAP. No material change in the accounting principles used in the
preparation of any Financial Statement hereafter adopted by Holdings shall be
given effect if such change would affect a calculation that measures compliance
with any provision of Article 5 or Article 8 unless the Issuers and the
Designated Purchaser agree to modify such provisions to reflect such material
changes in GAAP and, unless such provisions are modified, all Financial
Statements, Compliance Certificates and similar documents provided hereunder
shall be provided together with a reconciliation between the calculations and
amounts set forth therein before and after giving effect to such material change
in GAAP. Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to in Article 5 and Article 8 shall
be made, without giving effect to any election under Accounting Standards
Codification 825-10 (or any other Financial Accounting Standard having a similar
result or effect) to value any Indebtedness or other liabilities of any Note
Party or any Subsidiary of any Note Party at “fair value.”
          Section 1.4 Pro Forma. All components of financial calculations made
to determine compliance with Section 3.1(e), Article 5 and Article 8 shall be
adjusted on a Pro Forma Basis to include or exclude, as the case may be, without
duplication, such components of such calculations attributable to any Pro Forma
Transaction consummated after the first day of the applicable period of
determination and prior to the end of such period, as determined in good faith
by the Issuers based on assumptions expressed therein and that were believed in
good faith by the Issuers to be reasonable based on the information available to
the Issuers at the time of preparation of the Compliance Certificate setting
forth such calculations.
          Section 1.5 Payments. The Purchasers may set up standards and
procedures to determine or redetermine the equivalent in Dollars of any amount
expressed in any currency other than Dollars and otherwise may, but shall not be
obligated to, rely on any determination made by any Note Party. Any such

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determination or redetermination by the Purchasers shall be conclusive and
binding for all purposes, absent manifest error. No determination or
redetermination by any Note Party and no other currency conversion shall change
or release any obligation of any Note Party (other than the Purchasers and their
Related Persons) under any Note Document, each of which agrees to pay separately
for any shortfall remaining after any conversion and payment of the amount as
converted. The Purchasers may round up or down, and may set up appropriate
mechanisms to round up or down, any amount hereunder to nearest higher or lower
amounts and may determine reasonable de minimis payment thresholds.
               Section 1.6 Interpretation.
          (a) Certain Terms. Except as set forth in any Note Document, all
accounting terms not specifically defined herein shall be construed in
accordance with GAAP (except for the term “property”, which shall be interpreted
as broadly as possible, including, in any case, cash, Securities, other assets,
rights under Contractual Obligations and Permits and any right or interest in
any property). The terms “herein”, “hereof” and similar terms refer to this
Agreement as a whole. In the computation of periods of time from a specified
date to a later specified date in any Note Document, the terms “from” means
“from and including” and the words “to” and “until” each mean “to but excluding”
and the word “through” means “to and including.” In any other case, the term
“including” when used in any Note Document means “including without limitation.”
The term “documents” means all writings, however evidenced and whether in
physical or electronic form, including all documents, instruments, agreements,
notices, demands, certificates, forms, financial statements, opinions and
reports.
          (b) Certain References. Unless otherwise expressly indicated,
references (i) in this Agreement to an Exhibit, Schedule, Article, Section or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section or
clause in, this Agreement and (ii) in any Note Document, to (A) any agreement
shall include, without limitation, all exhibits, schedules, appendixes and
annexes to such agreement and any modification to any term of such agreement but
only to the extent such modifications are not prohibited by the terms of any
Note Document, (B) any statute shall be to such statute as modified from time to
time and to any successor legislation thereto, in each case as in effect at the
time any such reference is operative and (C) any time of day shall be a
reference to New York time. Titles of articles, sections, clauses, exhibits,
schedules and annexes contained in any Note Document are without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto. Unless otherwise expressly indicated, the meaning of
any term defined (including by reference) in any Note Document shall be equally
applicable to both the singular and plural forms of such term.
ARTICLE 2
ISSUANCE AND SALE OF NOTES; INTEREST; REPAYMENT
               Section 2.1 Note Issuance.
          (a) On the Closing Date, the Issuers shall authorize the issuance,
sale and delivery of the Notes in an aggregate principal amount of $85,000,000,
dated as of the Funding Date, to mature on the Maturity Date, and issued
substantially in the form of Exhibit B attached hereto.

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          (b) On the Funding Date, the Purchasers, severally, and not jointly
shall purchase Notes in an aggregate principal amounts set forth opposite such
Purchaser’s name on Schedule I under the heading Commitments, dated as of the
Funding Date, to mature on the Maturity Date.
          (c) The Notes issued pursuant hereto shall evidence the principal
amounts of all Notes sold hereunder (including any interest which is capitalized
under Section 2.7) and the date and principal amount of each purchase and sale
of Notes to the Purchasers by the Issuers, as well as each payment or prepayment
made on account of the principal thereof, and in each case the resulting
aggregate unpaid principal balance thereof, shall be recorded by each Purchaser
on its books; provided, that failure by any Purchaser to make any such
recordation shall not affect the obligations of the Issuers hereunder or under
such Note. Each such recordation by a Purchaser shall be prima facie evidence of
the existence and amounts of the obligations therein recorded for all purposes
in the absence of manifest error.
          (d) Notes issued under this agreement and subsequently pre-paid or
repaid in whole or in part, may not be reborrowed or reissued.
               Section 2.2 Procedures for Issuance.
          (a) Funding. The proceeds of the sale of the Notes (net of transaction
costs) (the “Purchase Price”) will be made available to the Issuers by each
Purchaser by wire transfer of its applicable Purchase Price to the Issuers on
the Funding Date, pursuant to the wire transfer instructions specified in a
written document executed by the Issuer Representative.
               Section 2.3 [Reserved.]
               Section 2.4 [Reserved.]
               Section 2.5 [Reserved.]
               Section 2.6 Repayment and Prepayment of Obligations.
          (a) At Maturity. On the Maturity Date, the unpaid principal balance of
the Notes to the extent not sooner paid or prepaid hereunder, shall be paid in
full, together with accrued interest and fees thereon and all costs, expenses,
indemnities and other Obligations then due and payable hereunder or under any
other Note Document.
          (b) Prepayments.
          (i) The Issuers may, at any time following the second anniversary of
the Funding Date, 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:

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      Months after the Funding Date   Redemption Price 25-36   105.0% 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. 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) Prior to the second (2nd) anniversary of the Funding Date, 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 pursuant to
Section 2.6(c), then the Obligations shall be repaid taking into consideration
the Make-Whole Amount or at the Redemption Price application at the time of such
Event of Default.
          (c) Mandatory Repayment on Change of Control. No later than 30 days
nor earlier than 60 days prior to the occurrence of a Change in Control, the
Issuers shall make an offer to all Purchasers to redeem all Notes pursuant to a
Redemption Offer (as defined below) at a purchase price in cash equal to 101% of
the outstanding principal amount of the Notes plus accrued and unpaid interest
(including any PIK Interest) to the date of redemption, in accordance with the
terms of this Section 2.6(c); and
          (i) concurrently with the occurrence of a Change in Control, redeem
all the Notes of all Purchasers (excluding any Purchaser that elects not to have
the Notes held by it redeemed in full) in accordance with such Redemption Offer.
          (ii) A “Redemption Offer” shall mean a notice delivered to each
Purchaser stating:

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               (1) that a Change in Control is contemplated and all or a portion
of such Purchaser’s Notes may be redeemed at a purchase price in cash equal to
the applicable percentage set forth above, plus accrued and unpaid interest
(including any PIK Interest) to the date of redemption;
               (2) in reasonable detail, the circumstances and relevant facts
regarding such Change in Control;
               (3) the redemption date (which shall be the effective date of the
Change in Control);
               (4) that the Purchasers electing not to have any Notes redeemed
pursuant to a Redemption Offer will be required to notify the Issuer prior to
the close of business on the fifth (5th) Business Day preceding the proposed
redemption date; and
               (5) that, up until the close of business on the fifth (5th)
Business Day preceding the proposed redemption date, any Purchaser will be
entitled to withdraw its election not to require the Issuer to redeem its Notes;
provided, that the Issuer receives, not later than the close of business on the
fifth (5th) Business Day preceding the proposed redemption date, a notice
setting forth the name of the Purchaser, the principal amount of Notes
previously requested not to be redeemed, and a statement that such Purchaser is
withdrawing its election not to have such Notes redeemed.
          (iii) Notwithstanding the foregoing provisions of this Section 2.6(c),
the Issuer shall be deemed to have made a Redemption Offer if a third party
makes the Redemption Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 2.6(c) applicable to
a Redemption Offer made by the Issuer and redeems all Notes as to which offers
for redemption have been validly accepted and not withdrawn pursuant to the
terms of such Redemption Offer.
               Section 2.7 Interest.
          (a) Interest Rate. Subject to Section 2.7(b), (i) the Notes shall bear
interest on the outstanding principal amount thereof from the date when issued,
payable in arrears on the first day of each quarter (each such date, an
“Interest Payment Date”), at the Issuers’ option, equal to either: (x) 13.0% per
annum payable in cash (the “Cash Rate”) or (y) 2% payable through an increase in
the outstanding principal amount of such Note (the “PIK Interest”) plus 12.0%
per annum payable in cash (the “PIK Rate”), which increase shall be evidenced by
an amended and restated Note to the extent requested by the Purchasers. The
Issuer Representative shall give written notice of the Issuers’ election to pay
PIK Interest under clause (y) above to each Purchaser in the form of Exhibit C
not later than 5 Business Days prior to any Interest Payment Date; provided,
that in the absence of any such notice with respect to any Interest Payment
Date, the interest due at such Interest Payment Date shall be the Cash Rate.
Interest shall also be paid on the date of any payment or redemption of Notes in
full or in part.
          (b) Default Interest. Notwithstanding the rates of interest specified
in Section 2.7(a) above or elsewhere in any Note Document, effective immediately
upon the occurrence of any Event of Default under Section 9.1(e)(ii) or (B) the
delivery of a notice by the

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Required Purchasers to the Issuer Representative during the continuance of any
other Event of Default, and, in each case, for as long as such Event of Default
shall be continuing, the principal balance of all Obligations (including any
Obligation that bears interest by reference to the rate applicable to any other
Obligation) then due and payable shall bear interest at a rate per annum equal
to the then applicable interest rate plus 2.0%, which default rate shall be
payable in cash (notwithstanding any election by the Issuers’ to pay PIK
Interest pursuant to Section 2.7(a)). All such interest shall be payable on
demand of any Purchaser.
          (c) Savings Clause. Anything herein to the contrary notwithstanding,
the obligations of the Issuers hereunder shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by the respective Purchaser would be contrary to the
provisions of any law applicable to such Purchaser limiting the highest rate of
interest which may be lawfully contracted for, charged or received by such
Purchaser, and in such event Issuer shall pay such Purchaser interest at the
highest rate permitted by applicable law (“Maximum Lawful Rate”); provided,
however, that if at any time thereafter the rate of interest payable hereunder
is less than the Maximum Lawful Rate, Issuer shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by the Purchasers is equal to the total interest that would have been
received had the interest payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Funding Date as otherwise
provided in this Agreement.
          Section 2.8 AHYDO Payments. Anything contained herein or in any of the
other Note Documents to the contrary notwithstanding, if the Notes shall remain
outstanding after the fifth (5th) anniversary of the initial issuance hereof and
the aggregate amount that would be includible in gross income of the Purchaser
with respect to the Notes for periods ending on or before any Interest Payment
Date (within the meaning of Section 163(i) of the Code) (the “Aggregate
Accrual”) that occurs after that fifth (5th) anniversary exceeds an amount equal
to the sum of (i) the aggregate amount of interest to be paid (within the
meaning of Section 163(i) of the Code) under the Notes on or before such
Interest Payment Date, and (ii) the product of (A) the issue price (as
determined under Sections 1273(b) and 1274(a) of the Code) of the Notes and
(B) the yield to maturity (interpreted in accordance with Section 163(i) of the
Code) of the Notes (such sum, the “Maximum Accrual”), then the Issuers shall
prepay to the Purchasers on each applicable Interest Payment Date occurring
after such fifth (5th) anniversary a portion of the outstanding stated principal
amount of the Notes equal to the excess, if any, of the Aggregate Accrual over
the Maximum Accrual, and the amount of such payment shall be treated for U.S.
federal and applicable state and local income tax purposes as an amount of
interest to be paid (within the meaning of Section 163(i)(2)(B)(i) of the Code)
under the Notes. The provision is intended to prevent the Notes from being
classified as “applicable high yield discount obligations,” as defined in
Section 163(i) of the Code, and shall be interpreted consistently therewith.
               Section 2.9 [Reserved.]
               Section 2.10 Application of Payments.
          (a) Application of Voluntary Redemption Payments. Unless otherwise
provided in this Section 2.10 or elsewhere in any Note Document, all payments
and any other amounts

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received from or for the benefit of the Issuers pursuant to Section 2.6(b)(i)
shall be applied to repay the Obligations the Issuer Representative designates.
          (b) [Reserved.]
          (c) Application of Payments During an Event of Default. Holdings and
each Issuer hereby irrevocably waives, and agrees to cause each Note Party and
each other Group Member to waive, the right to direct the application (i) during
the continuance of an Event of Default or (ii) upon any payments pursuant to
2.6(a) or 2.6(b)(iv) of any and all payments in respect of any Obligation and
agrees that, notwithstanding the provisions of clause (a) above, the Purchasers
may apply all payments in respect of any Obligation (i) first, to pay
Obligations in respect of any cost or expense reimbursements, fees or
indemnities then due to any Purchaser, (ii) second, to pay interest then due and
payable in respect of the Notes, (iii) third, to repay the outstanding principal
amounts of the Notes and (iv) fourth, to the ratable payment of all other
Obligations, and, then, any excess shall be paid to the Issuers or otherwise
ordered by a court of competent jurisdiction.
               Section 2.11 Payments and Computations.
          (a) Procedure. The Issuers shall make each payment under any Note
Document not later than 11:00 a.m. (New York time) on the day when due to each
Purchaser by wire transfer or ACH transfer to its account as set forth on
Schedule II (or at such other account or by such other means to such other
address as such Purchaser shall have notified the Issuer Representative in
writing within a reasonable time prior to such payment) in immediately available
Dollars and without setoff or counterclaim. Any payment which is received by any
Purchaser later than 11:00 a.m. (New York time) shall be deemed to have been
received on the immediately succeeding Business Day and any applicable interest
or fee shall continue to accrue.
          (b) [Reserved.]
          (c) Payment Dates. Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, the due date for such payment shall
be extended to the next succeeding Business Day without any increase in such
payment as a result of additional interest or fees; provided, however, that such
interest and fees shall continue accruing as a result of such extension of time.
               Section 2.12 Evidence of Debt.
          (a) Records of Purchasers. Each Purchaser shall maintain in accordance
with its usual practice accounts evidencing Indebtedness of the Issuers to such
Purchase resulting from each Note of such Purchaser from time to time, including
the amounts of principal, capitalized principal and interest payable and paid to
such Purchaser from time to time under this Agreement. In addition, each
Purchaser having sold a participation in any of its Obligations as such to the
Issuer Representative shall establish and maintain at its address referred to in
Section 11.11 (or at such other address as such Purchaser shall notify the
Issuer Representative) a record of ownership, in which such Purchaser shall
register by book entry (A) the name and address of each such participant (and
each change thereto, whether by assignment or otherwise) and (B) the rights,
interest or obligation of each such participant in any Obligation, in any Notes
and in any right to receive any payment hereunder.

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          (b) Records of Issuer Representative. The Issuer Representative shall
establish and maintain at its address referred to in Section 11.11 (or at such
other address as the Issuer Representative may notify the Purchasers) (A) a
record of ownership (the “Register”) in which the Issuer Representative agrees
to register by book entry the interests (including any rights to receive payment
hereunder) of each Purchaser in the Notes, each of their obligations under this
Agreement to participate in Notes, and any assignment of any such interest,
obligation or right and (B) accounts in the Register in accordance with its
usual practice in which it shall record (1) the names and addresses of the
Purchasers (and each change thereto pursuant to Section 11.2 (Assignments and
Participations; Binding Effect)), (2) the Notes held by each Purchaser, (3) the
amount of each funding of any participation described in clause (A) above,
(4) the amount of any principal or interest due and payable or paid, and (5) any
other payment received by the Purchasers from the Issuers and its application to
the Obligations.
          (c) Registered Obligations. Notwithstanding anything to the contrary
contained in this Agreement, the Notes are registered obligations, and the
right, title and interest of the Purchasers and their assignees in and to such
Notes, as the case may be, shall be transferable only upon notation of such
transfer in the Register and no assignment thereof shall be effective until
recorded therein. This Section 2.12 and Section 11.2 shall be construed so that
the Notes are at all times maintained in “registered form” within the meaning of
Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations
(and any successor provisions).
          (d) Prima Facie Evidence. The entries made in the Register and in the
accounts maintained pursuant to clause (a) above shall, to the extent permitted
by applicable Requirements of Law and absent manifest error, be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided, however, that no error in such account and no failure of any Purchaser
or the Issuer Representative to maintain any such account shall affect the
obligations of any Note Party to repay the Notes in accordance with their terms.
In addition, the Note Parties and the Purchasers shall treat each Person whose
name is recorded in the Register as a Purchaser, as applicable, for all purposes
of this Agreement. Information contained in the Register with respect to any
Purchaser shall be available for access by the Issuers or such Purchaser at any
reasonable time and from time to time upon reasonable prior notice. No Purchaser
shall, in such capacity, have access to or be otherwise permitted to review any
information in the Register other than information with respect to such
Purchaser unless otherwise agreed by the Required Purchasers.
               Section 2.13 [Reserved.]
               Section 2.14 [Reserved.]
               Section 2.15 [Reserved.]
               Section 2.16 [Reserved.]
               Section 2.17 Taxes
          (a) Payments Free and Clear of Taxes. Except as otherwise provided in
this Section 2.17, each payment by any Note Party to any Purchaser under any
Note Document shall be made free and clear of all present or future taxes,
levies, imposts, deductions, charges, stamp and other duties or withholdings and
all interest, penalties and liabilities with respect thereto (and without
deduction for any of them) (collectively, the

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“Taxes”) other than for (i) Taxes imposed on or measured by reference to net
income and franchise Taxes imposed in lieu of net income Taxes, in each case
imposed on any Purchaser as a result of a present or former connection between
such Purchaser and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from any Purchaser having executed,
delivered or performed its obligations or received a payment under, or enforced,
any Note Document), (ii) any branch profits Taxes imposed by the United States
or any similar tax imposed by any other jurisdiction in which any Purchaser is
located or (iii) Taxes that are directly attributable to the failure (other than
as a result of a change in any Requirement of Law) by any Purchaser to deliver
the documentation required to be delivered pursuant to clause (f) below (such
Taxes excluded under (i), (ii) or (iii), the “Excluded Taxes” and such
non-excluded Taxes, the “Non-Excluded Taxes”).
          (b) Gross-Up. If any Taxes shall be required by applicable
Requirements of Law to be deducted from or in respect of any amount payable
under any Note Document to any Purchaser (i) in the case of Non-Excluded Taxes,
such amount shall be increased as necessary to ensure that, after all required
deductions for Non-Excluded Taxes are made (including deductions applicable to
any increases to any amount under this Section 2.17), such Purchaser receives
the amount it would have received had no such deductions been made, (ii) the
relevant Note Party shall make such deductions, (iii) the relevant Note Party
shall timely pay the full amount deducted to the relevant taxing authority or
other authority in accordance with applicable Requirements of Law and
(iv) within 30 days after such payment is made, the relevant Note Party shall
deliver to the Purchasers an original or certified copy of a receipt evidencing
such payment; provided, however, that, notwithstanding the provisions of clause
(d) below, no such increase shall be made with respect to, and no Note Party
shall be required to indemnify any such Purchaser pursuant to clause (d) below
for, withholding Taxes to the extent that the obligation to withhold amounts
existed on the date that such Purchaser became a “Purchaser” under this
Agreement, except in each case to the extent such Purchaser is a direct or
indirect assignee of any other Purchaser that was entitled, at the time the
assignment of such other Purchaser became effective, to receive additional
amounts under this clause (b).
          (c) Other Taxes. In addition, the Issuers agree to pay, and authorize
the Purchasers to pay in its name, any stamp, documentary, excise or property
tax, charges or similar levies imposed by any applicable Requirement of Law or
Governmental Authority and all Liabilities with respect thereto (including by
reason of any delay in payment thereof), in each case arising from the
execution, delivery or registration of, or otherwise with respect to, any Note
Document or any transaction contemplated therein (collectively, “Other Taxes”).
Within 30 days after the date of any payment of Other Taxes by any Note Party,
the Issuers shall furnish to each Purchaser, at its address referred to in
Schedule II, the original or a certified copy of a receipt evidencing payment
thereof.
          (d) Indemnification. Without duplication of any additional amounts
paid pursuant to Section 2.17(b), the Issuers shall, on a joint and several
basis, reimburse and indemnify, within 30 days after receipt of demand therefor
(with copy to each Purchaser), each Purchaser for all Non-Excluded Taxes and
Other Taxes (including any Non-Excluded Taxes and Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.17) paid by such Purchaser
and any Liabilities arising therefrom or with respect thereto, whether or not
such Non-Excluded Taxes or Other Taxes were correctly or legally

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asserted. A certificate of such Purchaser claiming any compensation under this
clause (d), setting forth the amounts to be paid thereunder and delivered to the
Issuer Representative shall be conclusive, binding and final for all purposes,
absent manifest error.
          (e) Mitigation. Any Purchaser claiming any additional amounts payable
pursuant to this Section 2.17 shall use its reasonable efforts (consistent with
its internal policies and Requirements of Law) to change the jurisdiction of its
lending office if such a change would reduce any such additional amounts (or any
similar amount that may thereafter accrue) and would not, in the sole
determination of such Purchaser, be otherwise disadvantageous to such Purchaser.
          (f) Tax Forms.
               (i) Each Non-U.S. Purchaser Party that, at any of the following
times, is entitled to an exemption from or reduction of United States
withholding tax or, after a change in any Requirement of Law, is subject to such
withholding tax at a reduced rate under an applicable tax treaty, shall, to the
extent it is legally entitled to do so, (w) on or prior to the date such
Non-U.S. Purchaser Party becomes a “Non-U.S. Purchaser Party” hereunder, (x) on
or prior to the date on which any such form or certification expires or becomes
obsolete, (y) after the occurrence of any event requiring a change in the most
recent form or certification previously delivered by it pursuant to this clause
(i) and (z) from time to time if reasonably requested by the Issuer
Representative or, in the case of a participant or SPV, the relevant Purchaser,
provide the Issuer Representative or, in the case of a participant or SPV, the
relevant Purchaser with two properly completed and duly executed originals of
each of the following, as applicable: (A) Forms W-8ECI (claiming exemption from
U.S. withholding tax because the income is effectively connected with a U.S.
trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S.
withholding tax under an income tax treaty), as applicable, or any successor
forms or W-8IMY (claiming exemption through an intermediary), (B) in the case of
a Non-U.S. Purchaser Party claiming exemption under Sections 871(h) or 881(c) of
the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the
portfolio interest exemption) or any successor form and a certificate in form
and substance reasonably acceptable to the Issuer Representative that such
Non-U.S. Purchaser Party is not (1) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of any Issuer
within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any
other applicable document prescribed by the IRS certifying as to the entitlement
of such Non-U.S. Purchaser Party to such exemption from United States
withholding tax or reduced rate with respect to all payments to be made to such
Non-U.S. Purchaser Party under the Note Documents. Unless the Issuer
Representative has received forms or other documents reasonably satisfactory to
them indicating that payments under any Note Document to or for a Non-U.S.
Purchaser Party are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an applicable tax treaty, the Note Parties
shall withhold amounts required to be withheld by applicable Requirements of Law
from such payments at the applicable statutory rate.
               (ii) Each U.S. Purchaser Party shall, to the extent it is legally
entitled to do so, (A) on or prior to the date such U.S. Purchaser Party becomes
a “U.S. Purchaser Party” hereunder, (B) on or prior to the date on which any
such form or certification

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expires or becomes obsolete, (C) after the occurrence of any event requiring a
change in the most recent form or certification previously delivered by it
pursuant to this clause (f) and (D) from time to time if reasonably requested by
the Issuer Representative or, in the case of a participant or SPV, the relevant
Purchaser, provide the Issuer Representative or, in the case of a participant or
SPV, the relevant Purchaser with two properly completed and duly executed
originals of Form W-9 (certifying that such U.S. Purchaser Party is entitled to
an exemption from U.S. backup withholding tax) or any successor form.
          (iii) Each Purchaser having sold a participation in any of its
Obligations or identified an SPV as such to the Issuer Representative shall
collect from such participant or SPV the documents described in this clause (f)
and provide them to the Issuer Representative.
          (g) Refunds. If any Purchaser determines that it has received any
refund of any Non-Excluded Taxes or Other Taxes from the Governmental Authority
to which such Non-Excluded Taxes or Other Taxes were paid as to which it has
been indemnified by the Issuers or with respect to which the Issuers have paid
additional amounts pursuant to this Section 2.17, it shall pay over such refund
to the Issuer Representative (but only to the extent of indemnity payments made,
or additional amounts paid, by the Issuers under this Section 2.17, with respect
to Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Purchaser and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Issuer Representative, upon request of such
Purchaser agrees to repay the amount paid over to the Issuer Representative
(plus any penalties, interest or other charges imposed by the Governmental
Authority to the extent accrued from the date such refund is paid over to the
Issuer Representative) to such Purchaser together with any Liabilities relating
to such refund, in the event such Purchaser is required or requested to repay
such refund to the Governmental Authority. This paragraph shall not be construed
to require any Purchaser to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Issuer
Representative or any other Person.
               Section 2.18 [Reserved].
           Section 2.19 Issuer Representative. Each Note Party hereby designates
and appoints MedQuist as its representative and agent on its behalf (the “Issuer
Representative”) for the purposes of delivering certificates including
Compliance Certificates, giving instructions with respect to the disbursement of
the proceeds of the Notes, selecting interest rate options, giving and receiving
all other notices and consents hereunder or under any of the other Note
Documents and taking all other actions (including in respect of compliance with
covenants) on behalf of any Note Party under the Note Documents. MedQuist hereby
accepts such appointment. Each Purchaser may regard any notice or other
communication pursuant to any Note Document from the Issuer Representative as a
notice or communication from all Issuers. Each action authorized to be taken on
behalf of an Issuer by the Issuer Representative hereunder shall be deemed for
all purposes to have been taken by such Issuer and shall be binding upon and
enforceable against such Issuer to the same extent as if the same had been taken
directly by such Issuer.

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ARTICLE 3
CONDITIONS TO PURCHASE OF NOTES
          Section 3.1 Conditions Precedent to Purchase of Notes. The obligation
of each Purchaser to purchase the Notes on the Funding Date is subject to the
satisfaction or due waiver of each of the following conditions precedent on or
before the Closing Date:
          (a) Certain Documents. Each Purchaser shall have received on or prior
to the Closing Date each of the following, each dated as of the Closing Date
unless otherwise agreed by the Purchasers, in form and substance satisfactory to
each Purchaser:
          (i) this Agreement duly executed by Holdings and the Issuers and, for
the account of each Purchaser having requested the same by notice to the Issuer
Representative received at least three (3) Business Days prior to the Closing
Date, Notes conforming to the requirements set forth in Section 2.1(c);
          (ii) the Guaranty Agreement, duly executed by Holdings and each of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), together with
copies of UCC, tax, judgment, fixture and Intellectual Property search reports
and of all effective prior filings listed therein, in each case as may be
reasonably requested by the Required Purchasers;
          (iii) [Reserved.]
          (iv) duly executed customary opinions of counsel to the Note Parties,
each addressed to the Purchasers and addressing such matters as Required
Purchasers may reasonably request; provided, however, if the forms of such
opinions of counsel have been substantially agreed upon by the Purchasers as of
the Closing Date, the executed versions of such opinions of counsel may be
delivered promptly after the Closing Date, but in no event later than the
Funding Date.
          (v) a copy of each Constituent Document of each Note Party that is on
file with any Governmental Authority in its jurisdiction of organization,
certified as of a recent date by such Governmental Authority, together with, if
applicable, certificates attesting to the good standing of such Note Party in
(x) such jurisdiction and (y) each other jurisdiction where such Note Party is
qualified to do business as a foreign entity and where such qualification is
necessary for the conduct of such Note Party’s business (and, if appropriate in
any such jurisdiction, related tax certificates) except where the failure to so
qualify would not reasonably be expected to have a Material Adverse Effect;
          (vi) a certificate of the secretary or other officer of each Note
Party in charge of maintaining books and records of such Note Party certifying
as to (A) the names and signatures of each officer of such Note Party that is
authorized to and will execute and deliver any Note Document on the Closing
Date, (B) the Constituent Documents of such Note Party attached to such
certificate are complete and correct copies of such Constituent Documents as in
effect on the date of such certification (or, for any such Constituent Document
delivered pursuant to clause (iv) above, that there have been no changes from
such Constituent Document so delivered) and (C) the resolutions of such Note
Party’s board of directors or other appropriate governing body approving and
authorizing the execution, delivery and performance of each Note Document to
which such Note Party is a party;

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          (vii) the Senior Credit Agreement, duly executed by the initial Senior
Lenders, Holdings and the Issuers;
          (viii) a certificate of a Responsible Officer of the Issuer
Representative to the effect that (A) each condition set forth in
Sections 3.1(c) through (f) has been satisfied, (B) each Note Party is Solvent
after giving effect to consummation of the Related Transactions, and
(C) attached thereto are complete and correct copies of (x) the Related
Documents and (y) all consents and authorizations required pursuant to any
material Contractual Obligations with any other Person and all Permits of,
notices to and filings with, any Governmental Authority, in each case, as are
necessary in connection with the consummation of transactions contemplated by
the Note Documents and the Related Transactions (after giving effect to the
issuance of the Notes on the Funding Date);
          (ix) (x) interim Consolidated unaudited monthly Financial Statements
of Holdings and its Subsidiaries for each fiscal month ended after June 30, 2010
and on or prior to 45 days before the Closing Date, each in the form of the
monthly Financial Statements as of June 30, 2010 provided to the Required
Purchasers prior to the Closing Date, (y) a pro forma estimated Consolidated
balance sheet of Holdings and its Subsidiaries at the Closing Date after giving
effect to the Related Transactions and (z) Holdings’ business plan which shall
include a financial forecast on a quarterly basis for the first twelve months
after the Closing Date and on an annual basis thereafter through 2015 prepared
by Holdings’ management; and.
          (b) [Reserved.]
          (c) Related Transactions. MedQuist shall have conditioned the
declaration of the Recapitalization Dividend upon the funding of the Obligations
under this Agreement and the Senior Credit Agreement.
          (d) [Reserved.]
          (e) Minimum EBITDA; Maximum Leverage. Consolidated EBITDA of Holdings
for the twelve fiscal month period ended on July 31, 2010 shall be no less than
$84,000,000. After giving effect to the Related Transactions, the ratio of
Consolidated Total Debt of Holdings as of the Closing Date to Consolidated
EBITDA of Holdings for the twelve fiscal month period ended on July 31, 2010
shall not exceed 3.35 to 1.00, and the ratio of Consolidated Senior Debt of
Holdings as of the Closing Date to Consolidated EBITDA of Holdings for the
twelve fiscal month period ended on July 31, 2010 shall not exceed 2.35 to 1.00.
          (f) Representations and Warranties; No Defaults. To the extent
applicable, after giving pro forma effect to the Related Transactions as if they
had occurred on the Closing Date, the following statements shall be true on such
date: (i) the representations and warranties set forth in any Note Document
shall be true and correct on and as of such date or, to the extent such
representations and warranties expressly relate to an earlier date, on and as of
such earlier date and (ii) no Default shall exist.
 

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          Section 3.2 Conditions to Funding. The obligation of each Purchaser to
purchase the Notes on the Funding Date is subject to the satisfaction or due
waiver of each of the following conditions precedent on or before the Funding
Date:
          (a) Fee and Expenses. There shall have been paid to the Purchasers,
all fees and all reimbursements of costs or expenses, in each case due and
payable under any Note Document on or before the Funding Date and, in the case
of the reimbursement of costs and expenses, invoiced at least one Business Day
prior to the Funding Date.
          (b) Related Transactions. (i) the Senior Credit Agreement shall have
been duly executed and funded and (ii) subject to the satisfaction of the
condition in clause (i) and the issuance of the Notes and the use of the
proceeds thereof, all obligations due under the Existing Credit Agreement, the
Existing Subordinated Note and the CBay Convertible Notes will have been repaid
in full and the Existing Credit Agreement, all commitments to extend credit
thereunder, the Existing Subordinated Note and the CBay Convertible Notes shall
have been terminated, as evidenced by payoff letters in form and substance
reasonably satisfactory to the Required Purchasers duly executed and delivered
by the Existing Agent and the holders of the Existing Subordinated Note and CBay
Convertible Notes, as applicable, along with evidence of terminations of prior
UCC, tax, judgment, fixture and Intellectual Property filings (other than with
respect to Permitted Liens).
          (c) Subordination Agreement. The Subordination Agreement shall have
been fully executed.
          (d) Outstanding Indebtedness. After giving effect to the Related
Transactions, the Group Members shall have no Indebtedness as of the Funding
Date other than (i) Indebtedness incurred under this Agreement,
(ii) Indebtedness not to exceed $200,000,000 incurred pursuant the Senior Credit
Agreement and (iii) up to $11,000,000 of other Indebtedness existing prior the
Funding Date and not incurred in connection with the Related Transactions. There
shall not occur as a result of, and after giving effect to, the consummation of
the Related Transactions, a default (or any event which with the giving of
notice or lapse of time or both will be a default) under any Material Agreement
of Holdings and its Subsidiaries.
          (e) Representations and Warranties; No Defaults. The following
statements shall be true on such date, both before and after the Funding Date
giving effect to such Issuance: (i) the representations and warranties set forth
in any Note Document shall be true and correct on and as of such date or, to the
extent such representations and warranties expressly relate to an earlier date,
on and as of such earlier date and (ii) no Default shall exist.
          (f) Funding Date. That the Funding Date occur either on or prior to
October 15, 2010.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
          To induce the Purchasers to enter into the Note Documents, Holdings
and each Issuer represents and warrants to each of them each of the following:
          Section 4.1 Corporate Existence; Compliance with Law. Each Group
Member (a) is duly organized, validly existing and, if applicable, in good
standing under the laws of the jurisdiction of its organization, (b) is duly
qualified to do business as a foreign entity and in good standing under the laws
of each jurisdiction where such qualification is necessary, except where the
failure to be so qualified or in good standing
 

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would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, (c) has all requisite corporate or similar power and authority to own,
and operate its property and to conduct its business as now or currently
proposed to be conducted, (d) is in compliance with all applicable Requirements
of Law except where the failure to be in compliance would not reasonably be
expected to have a Material Adverse Effect and (e) has all necessary Permits
from or by, has made all necessary filings with, and has given all necessary
notices to, each Governmental Authority having jurisdiction, to the extent
required for such ownership, operation or conduct of business, except where the
failure to obtain such Permits, make such filings or give such notices would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect;
provided, however, that the representations and warranties under clause (a) and
(b) above with respect to the Excluded Foreign Subsidiaries are limited to the
knowledge of the Note Parties.
               Section 4.2 Note Documents and Related Documents. (a) Power and
Authority. The execution, delivery and performance by each Note Party of the
Note Documents and Related Documents to which it is a party and the consummation
of the Related Transactions and other transactions contemplated therein (i) are
within such Note Party’s corporate or similar powers and, at the time of
execution thereof, have been duly authorized by all necessary corporate and
similar action, (ii) do not (A) contravene such Note Party’s Constituent
Documents, (B) violate any applicable material Requirement of Law in any
material respect, (C) conflict with, contravene, constitute a default or breach
under, or result in or permit the termination or acceleration of, any material
Contractual Obligation of any Group Member (including other Related Documents or
Note Documents) other than those that would not, in the aggregate, have a
Material Adverse Effect, (D) do not materially adversely affect any Permit of
such Note Party other than those that would not, in the aggregate, have a
Material Adverse Effect or (E) result in the imposition of any Lien (other than
a Permitted Lien) upon any property of any Group Member and (iii) do not require
any Permit of, or filing with, any Governmental Authority or any consent of, or
notice to, any Person, other than (A) with respect to the Senior Loan Documents,
the filings required to perfect the Liens created by the Senior Loan Documents,
(B) those that have been, or will be prior to the Closing Date, obtained or
made, copies of which have been, or will be prior to the Closing Date, delivered
to the Purchasers, and each of which on the Closing Date will be in full force
and effect and (C) except with respect to the purchasing of the Notes and the
guarantying of the Obligations, those which, if not obtained or made, would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
          (b) Due Execution and Delivery. Each Note Document and Related
Document has been duly executed and delivered to the other parties thereto by
each Note Party party thereto, is the legal, valid and binding obligation of
such Note Party and is enforceable against such Note Party in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization or moratorium or similar laws affecting the rights or remedies of
creditors generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).
          (c) [Reserved.]
          Section 4.3 Ownership of Group Members. Set forth on Schedule 4.3 is a
complete and accurate list showing, as of the Closing Date, for each Group
Member other than Holdings, its jurisdiction of organization, the number of
 

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shares of each class of Stock outstanding on the Closing Date and the number and
percentage of the outstanding shares of each such class owned (directly or
indirectly) by any Issuer or Holdings. As of the Closing Date, all outstanding
Stock of each Group Member has been validly issued, is fully paid and
non-assessable (to the extent applicable) and, except in the case of Holdings,
is owned beneficially and of record by a Group Member free and clear of all
Liens other than Permitted Liens. As of the Closing Date, there are no Stock
Equivalents with respect to the Stock of any Group Member (other than Holdings).
As of the Closing Date, there are no Contractual Obligations or other
understandings to which any Group Member is a party with respect to (including
any restriction on) the issuance, voting, Sale or pledge of any Stock or Stock
Equivalent of any Group Member.
          Section 4.4 Financial Statements. (a) Each of (i) the audited
Consolidated balance sheet of Holdings as at December 31, 2009, and the related
Consolidated statements of income, retained earnings and cash flows of Holdings
for the Fiscal Year then ended, certified by KPMG LLP, and (ii) subject to the
absence of footnote disclosure and normal year-end audit adjustments, the
unaudited Consolidated balance sheets of Holdings as at July 31, 2010 and the
related Consolidated statements of income, retained earnings and cash flows of
Holdings for the seven (7) months then ended, copies of each of which have been
furnished to the Purchasers, fairly present in all material respects the
Consolidated financial position, results of operations and cash flow of the
Group Members as at the dates indicated and for the periods indicated in
accordance with GAAP.
          (b) On the Closing Date or the Funding Date as applicable, (i) none of
Holdings or its Subsidiaries has any material liability or obligation (including
Indebtedness, Guaranty Obligations, contingent liabilities and liabilities for
Taxes, long-term leases and unusual forward or long-term commitments) that is
not reflected in the Financial Statements referred to in clause (a) above or in
the notes thereto and which is otherwise prohibited by this Agreement and
(ii) since the date of the unaudited Financial Statements referenced in clause
(a)(ii) above, there has been no Sale of any material property of Holdings or
its Subsidiaries and no acquisition of any material property.
          (c) The Initial Projections have been prepared by Holdings in light of
the past operations of the business of Holdings and its Subsidiaries and reflect
projections for the five-year period beginning on July 1, 2010 on a quarterly
basis through June 30, 2011 and on a year-by-year basis thereafter. As of the
Closing Date, the Initial Projections have been prepared in good faith based
upon assumptions believed by the preparer thereof to be reasonable, it being
understood and agreed that financial projections are not a guarantee of
financial performance and actual results may differ from financial projections
and such differences may be material.
          (d) The unaudited Consolidated balance sheet of Holdings (the “Pro
Forma Balance Sheet”) delivered to the Purchasers prior to the date hereof, has
been prepared as of July 31, 2010 and reflects as of such date, on a Pro Forma
Basis for the Related Transactions the Consolidated financial condition of
Holdings.
          Section 4.5 Material Adverse Effect. Since December 31, 2009, no
Material Adverse Effect has occurred.
 

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          Section 4.6 Solvency. As of the Closing Date and as of the Funding
Date, both before and after giving effect to the Note Issuance and the Related
Transactions, each Note Party is Solvent.
          Section 4.7 Litigation. There are no pending (or, to the knowledge of
any Group Member, threatened in writing) actions, investigations, suits,
proceedings, audits or claims affecting any Group Member with, by or before any
Governmental Authority (x) that would reasonably be expected to have a Material
Adverse Effect or (y) that involve the Note Documents, the Related Documents or
the Related Transactions.
          Section 4.8 Taxes. Except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, all
Federal, state, local and foreign tax returns, reports and statements
(collectively, the “Tax Returns”) required to be filed by any Group Member have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct, and all Taxes, charges and other impositions reflected therein or
otherwise due and payable have been paid prior to the date on which any
Liability may be added thereto for non-payment thereof, in each case except with
respect to matters contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
appropriate Group Member in accordance with GAAP. As of the Closing Date, no
material Tax Return is under audit or examination by any Governmental Authority
and no notice of such an audit or examination or any assertion of any material
claim for Taxes has been given or made by any Governmental Authority. As of the
Closing Date, proper and accurate amounts have been withheld by each Group
Member from their respective employees for all periods in material compliance
with the tax, social security and unemployment withholding provisions of
applicable Requirements of Law and such withholdings have been timely paid to
the respective Governmental Authorities. No Group Member has participated in a
“listed transaction” within the meaning of Treasury
Regulation Section 1.6011-4(b) or has been a member of an affiliated, combined
or unitary group other than the group of which a Group Member is or was the
common parent.
          Section 4.9 Margin Regulations. No Issuer is engaged in the business
of extending credit for the purpose of, and no proceeds of any Note or other
extensions of credit hereunder will be used for the purpose of, buying or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve
Board) or extending credit to others for the purpose of purchasing or carrying
any such margin stock, in each case in contravention of Regulation T, U or X of
the Federal Reserve Board.
          Section 4.10 No Defaults. No Group Member is in default under or with
respect to any Contractual Obligation of any Group Member, other than those that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
          Section 4.11 Investment Company Act. No Group Member is an “investment
company” as defined in, or subject to regulation or restrictions under, the
Investment Company Act of 1940, as amended and the rules and regulations
promulgated thereunder.
 

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          Section 4.12 Labor Matters. There are no strikes, work stoppages,
slowdowns or lockouts existing, pending (or, to the knowledge of any Group
Member, threatened) against or involving any Group Member, except, for those
that would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 4.12, as of the Closing Date,
(a) there is no collective bargaining or similar agreement with any union, labor
organization, works council or similar representative covering any employee of
any Group Member, (b) no petition for certification or election of any such
representative is existing or pending with respect to any employee of any Group
Member and (c) no such representative has sought certification or recognition
with respect to any employee of any Group Member.
          Section 4.13 ERISA. Each Benefit Plan, and each trust thereunder,
intended to qualify for tax exempt status under Section 401 or 501 of the Code
(or other Requirements of Law) has received a favorable determination letter
from the IRS (or other applicable Governmental Authority), to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code covering all
applicable tax law changes, with respect to such qualification, and nothing has
occurred since the date of such determination that would adversely affect such
determination. Except for those that would not, in the aggregate, be reasonably
expected to result in a Material Adverse Effect, (x) each Benefit Plan is in
compliance in form and operation with its terms and with applicable provisions
of ERISA, the Code and other Requirements of Law, (y) there are no existing or
pending (or to the knowledge of any Group Member, threatened) claims (other than
routine claims for benefits in the normal course), sanctions, actions, lawsuits
or other proceedings or investigation involving any Benefit Plan to which any
Group Member has incurred or otherwise has or could have an obligation or any
Liability and (z) no ERISA Event has occurred or is reasonably expected to
occur. On the Closing Date, no ERISA Event has occurred in connection with which
obligations and liabilities (contingent or otherwise) remain outstanding. No
Benefit Plan and no other employee benefit plan maintained, sponsored or
contributed to by any Note Party or ERISA Affiliate is a defined benefit pension
plan or is subject to the minimum funding requirements of Section 412 of the
Code or Title IV of ERISA. No Note Party or ERISA Affiliate has any obligation
to contribute to any Multiemployer Plan, or has within any of the five calendar
years immediately preceding the date this assurance is given, made or accrued an
obligation to make contributions to any Multiemployer Plan. Each Note Party and
each ERISA Affiliate have made all material contributions to or under each
Benefit Plan and Multiemployer Plan required by law within the applicable time
limits prescribed thereby, the terms of such Benefit Plan or Multiemployer Plan,
respectively, or any contract or agreement requiring contributions to a Benefit
Plan or Multiemployer Plan, except where any failure to comply, individually or
in the aggregate, would not reasonably be expected to result in a material
liability. There exists no Unfunded Pension Liability with respect to any Title
IV Plan, except as would not reasonably be expected to result in a material
liability.
          Section 4.14 Environmental Matters. Except as set forth on Schedule
4.14, (a) the operations of each Group Member are and have been in compliance
with all applicable Environmental Laws, including obtaining, maintaining and
complying with all Permits required by any applicable Environmental Law, other
than non-compliances that, in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect, (b) no Group Member is party to, and no
Group Member
 

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and no real property currently (or to the knowledge of any Group Member
previously) owned, leased, subleased, operated or otherwise occupied by or for
any Group Member (but solely to the knowledge of the Group Members with respect
to any real property neither occupied by nor owned by any Group Member) is
subject to or the subject of, any Contractual Obligation or any pending (or, to
the knowledge of any Group Member, threatened) order, action, investigation,
suit, proceeding, audit, claim, demand, dispute or notice of violation or of
potential liability or similar notice, in each instance under or pursuant to any
Environmental Law, other than those that, in the aggregate, would not reasonably
be expected to result in a Material Adverse Effect, (c) no Group Member has
caused or allowed a Release of Hazardous Materials at, to or from any real
property of any Group Member and each such real property is free of
contamination by any Hazardous Materials except for such Release or
contamination that would not reasonably be expected to result, in the aggregate,
in a Material Adverse Effect, (d) no Group Member has received any information
request or notice of potential responsibility under CERCLA or similar
Environmental Laws, that, in the aggregate, would be reasonably expected to have
a Material Adverse Effect and (e) each Group Member has made available to the
Purchasers copies of all existing material environmental reports, reviews and
audits and all documents containing material information pertaining to actual or
potential material Environmental Liabilities, in each case to the extent such
reports, reviews, audits and documents are in their possession, custody or
control.
          Section 4.15 Intellectual Property. Each Group Member owns or licenses
all Intellectual Property that is necessary for the operations of its businesses
except as, in the aggregate, would not be reasonably expected to have a Material
Adverse Effect. To the knowledge of each Group Member, (a) the conduct and
operations of the businesses of each Group Member does not infringe,
misappropriate or violate any Intellectual Property owned by any other Person
and (b) no other Person has contested any right, title or interest of any Group
Member in, or relating to, any Intellectual Property, other than, in each case,
as would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
          Section 4.16 Title; Real Property. Each Group Member has good and
valid fee simple title to all owned real property and valid leasehold interests
in all leased real property, and owns or leases all personal property necessary
for the conduct of its business except as would not reasonably be expected to
have a Material Adverse Effect, and none of such property is subject to any Lien
except Permitted Liens. As of the Closing Date, no Group Member owns any fee
simple interest in any real Property.
          Section 4.17 Full Disclosure. All of the representations or warranties
made by any Note Party or any of their respective Subsidiaries in the Note
Documents as of the date such representations and warranties were made or deemed
made, and all of the information other than the Projections and general economic
or specific industry information that has been made available to the Purchasers
by or on behalf of any Group Member or any of their respective Subsidiaries
(including the information contained in any Financial Statement or Disclosure
Document), when taken as a whole and after giving effect to all supplements
previously made thereto, was, when furnished, complete and correct in all
material respects and did not, when furnished, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances
 

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under which such statements were made. All projections that are part of such
information (including those set forth in any Projections delivered subsequent
to the Closing Date) have been prepared in good faith based upon assumptions
believed by the preparer thereof to be reasonable at the time made and at the
time such projections are made available (it being understood and agreed that
financial projections are not a guarantee of financial performance and actual
results may differ from financial projections and such differences may be
material).
          Section 4.18 Anti-Terrorism Laws. No Group Member and, to the
knowledge of each Group Member, no joint venture or subsidiary thereof is in
violation in any material respects of any United States Requirements of Law
relating to terrorism, sanctions or money laundering, including the United
States Executive Order No. 13224 on Terrorist Financing and the Patriot Act.
          Section 4.19 Material Agreements. Except for matters which, either
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, each Material Agreement (a) is in full force and
effect, unless it has expired at the end of its stated term or been replaced by
an agreement or agreements not materially less favorable to the Note Parties
than the Material Agreement which it replaces and (b) has not been amended or
modified (other than amendments or modifications permitted by Section 8.11(c)).
          Section 4.20 Health Care Matters. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Group
Member, and any Person acting on their behalf, is in compliance in all respects
with all Health Care Laws applicable to it, its products and its properties or
other assets or its business or operation.
          Section 4.21 Health Care Permits. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, (a) each
Group Member, and any Person acting on their behalf, has in effect all material
health care Permits necessary for it to own, lease or operate its properties and
other assets and to carry on its business and operations as presently conducted,
(b) all such Permits are in full force and effect and there exists no default
under, or violation of, any such Permit, (c) no condition exists or event has
occurred which, in itself or with the giving of notice or lapse of time or both,
has resulted or would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such Permit and (d) there is no material claim
that any such Permit is not in full force and effect, and no presently existing
circumstance exists or event has occurred which could reasonably be expected to
result in a material violation of the Health Care Laws. As of the Closing Date,
Schedule 4.21 sets forth an accurate, complete and current list of all material
health care Permits with respect to the business of each Group Member.
          Section 4.22 Exclusion. Except as would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, none of the Group
Members, nor any Person acting on behalf of any Group Member has been, or has
been threatened to be, (i) excluded from any Governmental Payor Program pursuant
to 42 U.S.C. § 1320a-7b and related regulations, (ii) “suspended” or “debarred”
from selling products to the U.S. government or its agencies pursuant to the
Federal Acquisition Regulation, relating to debarment and suspension applicable
to federal government agencies
 

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generally (42 C.F.R. Subpart 9.4), or other applicable laws or regulations,
(iii) debarred, disqualified, suspended or excluded from participation in
Medicare, Medicaid or any other health care program or is listed on the General
Services Administration list of excluded parties, nor is any such debarment,
disqualification, suspension or exclusion threatened or pending, or (iv) made a
party to any other action by any Governmental Authority that may prohibit it
from selling products or providing services to any governmental or other
purchaser pursuant to any federal, state or local laws or regulations.
          Section 4.23 HIPAA. Except as would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect, each Group Member is in
compliance with all applicable federal, state and local laws and regulations
regarding the privacy and security of health information and electronic
transactions, including HIPAA, and the provisions of all business associate
agreements (as such term is defined by HIPAA) to which it is a party and has
implemented adequate policies, procedures and training designed to assure
continued compliance and to detect non-compliance. Except as would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, to the
extent applicable to any Note Party and for so long as (1) any Note Party is a
“covered entity” as defined in 45 C.F.R. § 160.103, (2) any Note Party is a
“business associate” as defined in 45 C.F.R. § 160.103, (3) any Note Party is
subject to or covered by the HIPAA Administrative Requirements codified at 45
C.F.R. Parts 160 & 162 (the “Transactions Rule”) and/or the HIPAA Security and
Privacy Requirements codified at 45 C.F.R. Parts 160 & 164 (the “Privacy and
Security Rules”), and/or (4) any Note Party sponsors any “group health plans” as
defined in 45 C.F.R. § 160.103, such Note Party has: (i) completed thorough and
detailed surveys, audits, inventories, reviews, analyses and/or assessments,
including risk assessments, (collectively “Assessments”) of all material areas
of its business and operations subject to HIPAA and/or that could be materially
and adversely affected by the failure of such Note Party, or any Person acting
on behalf of any Note Party, as the case may be, to the extent these Assessments
are appropriate or required for such Note Party to be in compliance with HIPAA;
(ii) developed a detailed plan and time line for becoming in compliance with
HIPAA (a “HIPAA Compliance Plan”); and (iii) implemented those provisions of its
HIPAA Compliance Plan necessary to ensure that such Note Party is in compliance
with HIPAA.
ARTICLE 5
FINANCIAL COVENANTS
          Each of Holdings and each Issuer agrees with the Purchasers to each of
the following, as long as any Obligation (other than any Contingent Note
Document Obligation) remains outstanding:
          Section 5.1 Maximum Consolidated Senior Leverage Ratio. Holdings shall
not have, on the last day of each Fiscal Quarter set forth below, a Consolidated
Senior Leverage Ratio greater than the maximum ratio set forth opposite such
Fiscal Quarter:
 

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      FISCAL QUARTER ENDING   MAXIMUM CONSOLIDATED SENIOR LEVERAGE RATIO
September 30, 2010
  3.30:1.00
December 31, 2010
  3.00:1.00
March 31, 2011
  2.90:1.00
June 30, 2011
  2.60:1.00
September 30, 2011
  2.40:1.00
December 31, 2011
  2.40:1.00
March 31, 2012
  2.20:1.00
June 30, 2012
  1.90:1.00
September 30, 2012
  1.80:1.00
December 31, 2012
  1.70:1.00
March 31, 2013
  1.50:1.00
June 30, 2013
  1.30:1.00
September 30, 2013
  1.20:1.00
December 31, 2013
  1.20:1.00
March 31, 2014
  1.20:1.00
June 30, 2014 and thereafter
  1.10:1.00

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

      FISCAL QUARTER ENDING   MAXIMUM CONSOLIDATED TOTAL LEVERAGE RATIO
September 30, 2010
  4.40:1.00
December 31, 2010
  4.40:1.00
March 31, 2011
  4.10:1.00
June 30, 2011
  3.90:1.00
September 30, 2011
  3.60:1.00
December 31, 2011
  3.30:1.00
March 31, 2012
  3.30:1.00
June 30, 2012
  3.00:1.00
September 30, 2012
  2.90:1.00
December 31, 2012
  2.80:1.00
March 31, 2013
  2.60:1.00
June 30, 2013
  2.40:1.00
September 30, 2013
  2.30:1.00
December 31, 2013
  2.20:1.00

 

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      FISCAL QUARTER ENDING   MAXIMUM CONSOLIDATED TOTAL LEVERAGE RATIO
March 31, 2014
  2.20:1.00
June 30, 2014
  1.90:1.00
September 30, 2014
  1.90:1.00
December 31, 2014
  1.80:1.00
March 31, 2015
  1.80:1.00
June 30, 2015 and thereafter
  1.70:1.00

               Section 5.3 [Reserved.]
               Section 5.4 Minimum Consolidated Interest Coverage Ratio.
Holdings shall not have, on the last day of each Fiscal Quarter set forth below,
a Consolidated Interest Coverage Ratio for the four (4) Fiscal Quarter period
ending on such day less than the minimum ratio set forth opposite such Fiscal
Quarter:

      FISCAL QUARTER ENDING   MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO
September 30, 2010
  2.50:1.00
December 31, 2010
  2.50:1.00
March 31, 2011
  2.50:1.00
June 30, 2011
  2.70:1.00
September 30, 2011
  2.90:1.00
December 31, 2011
  2.90:1.00
March 31, 2012
  3.20:1.00
June 30, 2012
  3.20:1.00
September 30, 2012
  3.40:1.00
December 31, 2012
  3.40:1.00
March 31, 2013 and thereafter
  3.60:1.00

ARTICLE 6
REPORTING COVENANTS
          Each of Holdings and each Issuer agrees with the Purchasers to each of
the following, as long as any Obligation (other than any Contingent Note
Document Obligation) remains outstanding:
          Section 6.1 Financial Statements. The Issuers shall deliver to the
Purchasers each of the following in a format reasonably satisfactory to the
Required Purchasers:
 

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          (a) Monthly Reports. Within 30 days after the end of each month, the
internal Consolidated unaudited balance sheet of each of as of the close of such
fiscal month and related Consolidated statements of income and cash flow for
such fiscal month and that portion of the Fiscal Year ending as of the close of
such fiscal month, setting forth in comparative form the figures for the
corresponding period in the prior Fiscal Year (after the first anniversary of
the Closing Date) prepared for management and consistent with past practice.
          (b) Quarterly Reports. As soon as available, and in any event within
45 days after the end of each Fiscal Quarter of each Fiscal Year (i) ending
before the MedQuist Consolidation Date, the Consolidated unaudited balance sheet
of Holdings, the Consolidated unaudited balance sheet of MedQuist and all
eliminations necessary to reconcile such balance sheets and (ii) ending on or
after the MedQuist Consolidation Date, the Consolidated unaudited balance sheet
of Holdings, in each case as of the close of such Fiscal Quarter, and including
related Consolidated statements of income and cash flow for such Fiscal Quarter
and that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter, setting forth in comparative form (x) the figures for the corresponding
period in the prior Fiscal Year (after the first anniversary of the Closing
Date) and (y) the figures for the corresponding period set forth in the most
recent corresponding Projections received by the 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).
          (c) Annual Reports. As soon as available, and in any event within
90 days after the end of each Fiscal Year (i) ending before the MedQuist
Consolidation Date, the Consolidated balance sheet of Holdings and the
Consolidated balance sheet of MedQuist and (ii) ending on or after the MedQuist
Consolidation Date, the Consolidated balance sheet of Holdings, in each case as
of the end of such year and including related Consolidated statements of income,
stockholders’ equity and cash flow for such Fiscal Year, each prepared in
accordance with GAAP, together with an opinion of the Group Members’ Accountants
that such Consolidated Financial Statements fairly present in all material
respects the Consolidated financial position, results of operations and cash
flow of Holdings and/or MedQuist, as applicable, as at the dates indicated and
for the periods indicated therein in accordance with GAAP without qualification
as to the scope of the audit or as to going concern or other similar
qualification, it being understood that the Issuers may satisfy the requirements
of this clause (c) by delivery, in the manner provided in Section 11.11(a), of
their annual reports on Form 10-K (or any successor form), as filed with the
Securities and Exchange Commission.
          (d) Compliance Certificate. Together with each delivery of any
Financial Statement pursuant to clause (b) or (c) above, a Compliance
Certificate duly executed by a Responsible Officer of the Issuer Representative
that, among other things, (i) if delivered together with any Financial Statement
pursuant to clause (c) above, includes the calculations used in determining
Excess Cash Flow, (ii) if delivered together with any Financial Statements
pursuant to clauses (b) or (c) above, (A) demonstrates compliance with each
financial covenant contained in Article 5 and (B) contains a detailed
calculation of Additional Available Cash as of the date of such Financial
Statements including any reduction thereof described in clauses (v) and (vi) of
the definition thereof, and (iii) states that no Default is continuing as of the
date of delivery of such Compliance
 

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Certificate or, if a Default is continuing, states the nature thereof and the
action that the Issuers propose to take with respect thereto.
          (e) Corporate Chart and Other Collateral Updates. Together with each
delivery of any Financial Statement pursuant to clause (c) above, a certificate
by a Responsible Officer of the Issuer Representative that (i) the Corporate
Chart attached thereto (or the last Corporate Chart delivered pursuant to this
clause (e)) is correct and complete as of the date of such Compliance
Certificate, (ii) there has been no material change in the information provided
in the last Compliance Certificate delivered pursuant to this clause (e), as
applicable, or, if there has been a material change in such information,
complete and correct supplements to such Schedules have been delivered to the
Purchasers or are attached to such certificate, and (iii) if any term of any
Constituent Document of any Group Member has been modified on or prior to the
date of delivery of such Compliance Certificate in accordance with Section 8.11,
complete and correct copies of all documents evidencing such modification have
been delivered to the Purchasers or are attached to such certificate.
          (f) Additional Projections. As soon as available and in any event not
later than 30 days after the beginning of each Fiscal Year, (i) forecasts
prepared by management of the Issuers including in such forecasts (A) a
projected Consolidated balance sheet, income statement and statement of cash
flows and (B) a statement of all of the material assumptions on which such
forecasts are based for each Fiscal Quarter in such Fiscal Year containing
substantially the same type of financial information as that contained in the
Initial Projections.
          (g) Audit Reports, Management Letters, Etc. Together with each
delivery of any Financial Statement for any Fiscal Year pursuant to clause (c)
above, copies of each management letter, audit report or similar letter or
report received by any Group Member from any independent registered certified
public accountant (including the Group Members’ Accountants) in connection with
such Financial Statements or any audit thereof, each certified to be complete
and correct copies by a Responsible Officer of the Issuer Representative as part
of the Compliance Certificate delivered in connection with such Financial
Statements.
          (h) Other. Reasonably promptly after request, such documents and
information with respect to the business, property, condition (financial or
otherwise), legal, financial or corporate or similar affairs or operations of
any Note Party (and during the continuance of a Default, any Group Member) as
the Required Purchasers may from time to time reasonably request.
          Section 6.2 Other Events. The Issuer Representative shall give the
Purchasers notice of each of the following (which may be made by telephone if
promptly confirmed in writing) promptly after any Responsible Officer of any
Note Party knows:
          (a) (i) the occurrence or existence of any Default or Event of Default
and (ii) any event that such Responsible Officer believes would reasonably be
expected to have a Material Adverse Effect, specifying, in each case, the nature
and anticipated effect thereof and any action proposed to be taken in connection
therewith;
          (b) [Reserved.];
 

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          (c) the commencement of any action, investigation, suit or proceeding
by or before any Governmental Authority brought against any Group Member that
would reasonably be expected to have a Material Adverse Effect;
          (d) notice of any material civil or criminal investigation or the
commencement of proceedings before any Governmental Authority alleging a
material violation of any Health Care Laws;
          (e) [Reserved.];
          (f) any default under (after the expiration of any cure period with
respect to such default and after giving effect to any written waiver of such
default) any Senior Loan Document; and
          (g) any material default under any Material Agreement (after the
expiration of any cure period with respect to such default and after giving
effect to any written waiver of such default) or any termination of any Material
Agreement, other than a termination in connection with the replacement thereof
with an agreement or agreements not materially less favorable to the Note
Parties.
Each notice pursuant to this Section shall be in electronic form accompanied by
a statement by a Responsible Officer on behalf of the Issuer Representative
setting forth details of the occurrence referred to therein, and stating what
action the Issuers or other Person proposes to take with respect thereto and at
what time.
          Section 6.3 Copies of Notices and Reports. The Issuer Representative
shall promptly deliver to the Purchasers copies of each of the following:
(a) all reports that Holdings transmits to its security holders generally,
(b) all periodic reports and reports on Form 8-K that any Group Member files
with the Securities and Exchange Commission and (c) all material documents
transmitted or received pursuant to, or in connection with, any Related
Document.
          Section 6.4 Labor Matters. The Issuer Representative shall give the
Purchasers notice of each of the following (which may be made by telephone if
promptly confirmed in writing), promptly after, and in any event within 30 days
after any Responsible Officer of any Note Party knows: (a) the commencement of
any material labor dispute to which any Group Member is a party, including any
strikes, lockouts or other disputes relating to any of such Person’s plants and
other facilities and (b) the incurrence by any Group Member of any Worker
Adjustment and Retraining Notification Act or related or similar liability
incurred with respect to the closing of any plant or other facility of any such
Person (other than, in the case of this clause (b), those that would not, in the
aggregate, be reasonably expected to have a Material Adverse Effect).
          Section 6.5 ERISA-Related Information. The Issuer Representative shall
supply to the Purchasers:
          (a) promptly and in any event within 15 days after any ERISA Affiliate
files a Schedule B (or such other schedule as contains actuarial information) to
IRS Form 5500 in
 

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respect of a Title IV Plan with Unfunded Pension Liabilities, a copy of such IRS
Form 5500 (including the Schedule B);
          (b) promptly and in any event within 30 days after any ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred, a certificate of
the chief financial officer of the ERISA Affiliate describing such ERISA Event
and the action, if any, proposed to be taken with respect to such ERISA Event
and a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA
Event and any notices received by such ERISA Affiliate from the PBGC or any
other governmental agency with respect thereto; provided that, in the case of
ERISA Events under paragraph (g) of the definition thereof, the 30-day period
set forth above shall be a 10-day period, and, in the case of ERISA Events under
paragraph (e) of the definition thereof, in no event shall notice be given later
than the occurrence of the ERISA Event; and
          (c) promptly and in any event within 30 days after the adoption of, or
the commencement of contributions to, any Benefit Plan subject to Section 412 of
the Code or Title IV of ERISA by any ERISA Affiliate, or the adoption of any
amendment to a Benefit Plan subject to Section 412 of the Code or Title IV of
ERISA which results in a material increase in contribution obligations of any
ERISA Affiliate, a detailed written description thereof from the chief financial
officer of such ERISA Affiliate.
ARTICLE 7
AFFIRMATIVE COVENANTS
          Each of Holdings and each Issuer agrees with the Purchaers to each of
the following, as long as any Obligation (other than any Contingent Note
Document Obligation) remains outstanding:
          Section 7.1 Maintenance of Corporate Existence. Each Group Member
shall preserve and maintain its legal existence, except in the consummation of
transactions expressly permitted by Sections 8.4 and 8.7.
          Section 7.2 Compliance with Laws, Etc. Each Group Member shall comply
with all applicable Requirements of Law, except for such failures to comply that
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
          Section 7.3 Payment of Obligations. Each Group Member shall pay or
discharge before they become delinquent (a) all material claims, taxes,
assessments, charges and levies imposed by any Governmental Authority and
(b) all other material lawful claims that if unpaid would, by the operation of
applicable Requirements of Law, become a Lien upon any property of any Group
Member, except, in each case, for those whose amount or validity is being
contested in good faith by proper proceedings diligently conducted and for which
adequate reserves are maintained on the books of the appropriate Group Member in
accordance with GAAP.
          Section 7.4 Maintenance of Property. Each Group Member shall maintain
and preserve (a) in good working order and condition all of its property
necessary in the conduct of its business and (b) all rights, Permits, licenses,
approvals and privileges necessary, used or useful, whether because of its
ownership, lease, sublease or other operation or occupation of property or other
conduct of its business,
 

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and shall make all necessary or appropriate filings with, and give all required
notices to, Government Authorities, except for such failures to maintain and
preserve the items set forth in clauses (a) and (b) above that would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
          Section 7.5 Maintenance of Insurance. Each Group Member shall
(a) maintain or cause to be maintained in full force and effect all policies of
insurance with respect to the property and businesses of the Group Members
(including policies of life, fire, theft, product liability, public liability,
Flood Insurance, property damage, other casualty, employee fidelity, workers’
compensation, business interruption and employee health and welfare insurance)
with financially sound and reputable insurance companies or associations (in
each case that are not Affiliates of any Issuer) of a nature and providing such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of the business of the Group Members. Notwithstanding the
requirement above, Federal Flood Insurance shall not be required for (x) real
property not located in a Special Flood Hazard Area, or (y) real property
located in a Special Flood Hazard Area in a community that does not participate
in the National Flood Insurance Program.
          Section 7.6 Keeping of Books. The Group Members shall keep proper
Consolidated books of record and account, in which full, true and correct
entries shall be made in accordance with GAAP and all other applicable
Requirements of Law of all material financial transactions and the assets and
business of the Group Members.
          Section 7.7 Access to Books and Property. Each Note Party (and during
the continuance of a Default, each Group Member) shall permit a representative
selected by the Required Purchasers (the “Purchaser Representative”) and its
Related Persons, as often as reasonably requested, at any reasonable time during
normal business hours, with reasonable advance notice (except that, during the
continuance of an Event of Default, no such notice shall be required and each
Purchaser may exercise all rights hereunder (including the right of inspection)
at any and all times during the continuance thereof) to (a) visit and inspect
the property of each Note Party (and during the continuance of a Default, each
Group Member) and examine and make copies of and abstracts from, the corporate
(and similar), financial, operating and other books and records of each Note
Party (and during the continuance of a Default, each Group Member), (b) discuss
the affairs, finances and accounts of each Note Party (and during the
continuance of a Default, each Group Member) with any officer or director of any
Note Party (and during the continuance of a Default, any Group Member) and
(c) communicate directly with any registered certified public accountants
(including the Group Members’ Accountants) of any Note Party (and during the
continuance of a Default, each Group Member); provided, the Note Parties shall
not be responsible for costs and expenses other than those of the Purchaser
Representative once per year unless an Event of Default has occurred and is
continuing; provided further that any annual inspection shall be conducted on a
single date for all Purchasers each year. Each Note Party (and during the
continuance of a Default, each Group Member) shall authorize their respective
registered certified public accountants (including the Group Members’
Accountants) to communicate directly with the Purchaser Representative and its
Related Persons and to disclose to the Purchaser Representative and its Related
Persons all financial statements and other documents and information as they
might have and the
 

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Purchaser Representative reasonably requests with respect to any Note Party (and
during the continuance of a Default, any Group Member).
          Section 7.8 Environmental. Each Group Member shall comply with, and
maintain its real property, whether owned, leased, subleased or otherwise
operated or occupied, in compliance with, all applicable Environmental Laws
(including by implementing any Remedial Action necessary for such Group Member
to achieve such compliance or that is required by orders and directives of any
Governmental Authority) except for failures to comply or maintain that would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
          Section 7.9 Use of Proceeds. The proceeds of the sale of the Notes
shall be used by the Issuers (and, to the extent distributed to them by the
Issuers, each other Group Member) solely (a) to consummate the Related
Transactions, the Exchange Offer and for the payment of related transaction
costs, fees and expenses and (b) for the payment of transaction costs, fees and
expenses incurred in connection with the Note Documents and the transactions
contemplated therein.
          Section 7.10 Additional Guaranties. To the extent not delivered to the
Purchasers on or before the Closing Date (including Persons that become, after
the Closing Date, Domestic Subsidiaries of any Note Party, each Group Member
shall, promptly, do each of the following, unless otherwise agreed by the
Required Purchasers:
          (a) deliver to the Purchasers such modifications to the terms of the
Note Documents (or such other documents), in each case substantially in the same
form as delivered to the Senior Agent under the Senior Credit Agreement in order
to ensure that each Subsidiary of any Note Party that has entered into Guaranty
Obligations with respect to the Senior Loan Obligations shall guaranty, as
primary obligor and not as surety, the payment of the Obligations of the
Issuers;
          (b) [Reserved.];
          (c) [Reserved.];
          (d) take all other actions necessary or advisable to ensure the
validity or continuing validity of any guaranty for any Obligation set forth in
the Note Documents executed on the Closing Date; and
          (e) if delivered to the Senior Agent, deliver to the Purchasers legal
opinions relating to the matters described in this Section 7.10, which opinions
shall be substantially in the form delivered to the Senior Agent in connection
with the comparable guaranty of the Senior Lenders.
          Section 7.11 [Reserved].
          Section 7.12 Compliance Program. The Group Members shall continue to
maintain a compliance program related to their obligations as a “business
associate” of “covered entities,” as such terms are defined by HIPAA, including
employee training and policies and procedures on the appropriate use and
disclosure of protected health information. The Group Members shall revise and
update such
 

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compliance program, as appropriate, to take into account any changes in law or
regulation affecting such program in any material respect.
ARTICLE 8
NEGATIVE COVENANTS
          Each of Holdings and each Issuer agrees with the Purchasers to each of
the following, as long as any Obligation (other than any Contingent Note
Document Obligation) remains outstanding:
          Section 8.1 Indebtedness. No Group Member shall incur or otherwise
remain liable with respect to, any Indebtedness except for the following:
          (a) the Obligations;
          (b) Indebtedness existing on the date hereof and set forth on
Schedule 8.1, together with any Permitted Refinancing thereof;
          (c) Indebtedness consisting of Capitalized Lease Obligations (other
than with respect to a lease entered into as part of a Sale and Leaseback
Transaction) and purchase money Indebtedness to finance the acquisition, repair,
improvement or construction of fixed or capital assets of such Group Member, in
each case incurred by any Group Member (other than Holdings) together with any
Permitted Refinancing thereof; provided, however, that (i) the aggregate
outstanding principal amount of all such Indebtedness permitted under this
clause (c) does not exceed $5,750,000 (plus $1,150,000 per Fiscal Year occurring
after the 2010 Fiscal Year) at any one time and (ii) the principal amount of
such Indebtedness does not exceed the lower of the cost or fair market value
(calculated at the time an acquisition, repair, improvement or construction is
made) of the property so acquired or built or of such repairs or improvements
financed, whether directly or through a Permitted Refinancing, with such
Indebtedness;
          (d) Capitalized Lease Obligations incurred by any Group Member (other
than Holdings) arising under Sale and Leaseback Transactions involving the sale
of assets permitted hereunder in reliance upon Sections 8.4(d) or (e);
          (e) Indebtedness owed by one Group Member to any other Group Member to
the extent that the resulting Investment held by the payee of such Indebtedness
constitutes a Permitted Investment under Section 8.3(e);
          (f) (i) obligations under Interest Rate Contracts entered into to
comply with Section 7.13 of the Senior Credit Agreement and (ii) obligations
under Hedging Agreements entered into in the Ordinary Course of Business and not
for speculation;
          (g) Guaranty Obligations of any Group Member with respect to
Indebtedness of any Group Member (except with respect to Permitted Refinancings,
for which Guaranty Obligations are permitted only to the extent set forth in the
definition thereof), to the extent that such Guaranty constitutes a Permitted
Investment under Section 8.3(e);
          (h) Indebtedness of any Group Member (other than Holdings) in respect
of performance bonds, bid bonds, appeal bonds, surety bonds, performance and
completion
 

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guarantees and similar obligations, in each case, that are incurred in the
Ordinary Course of Business and not in connection with the borrowing of money or
Hedging Agreement;
          (i) Indebtedness of any Group Member consisting of (i) obligations to
pay insurance premiums, or (ii) take or pay obligations contained in supply
agreements, in each case, with such obligations arising in the Ordinary Course
of Business and not in connection with the borrowing of money or Hedging
Agreements;
          (j) Indebtedness pursuant to the Senior Loan Documents; provided,
however, that the aggregate outstanding principal amount of all such Senior Loan
Obligations (excluding Secured Hedging Obligations and Bank Product Obligations
(as defined in the Subordination Agreement)) shall not exceed the Maximum Senior
Principal Amount;
          (k) unsecured Indebtedness of any Group Member representing deferred
compensation to employees, consultants or independent contractors of a Group
Member incurred in the Ordinary Course of Business, or of a Person whose
liability for such compensation has been assumed pursuant to a Permitted
Acquisition;
          (l) Indebtedness in respect of automatic clearing house arrangements,
employee issued credit or purchase cards and overdraft protections, in each
case, incurred in the Ordinary Course of Business by any Group Member, provided
that (i) such Indebtedness (other than credit or purchase cards) is extinguished
within ten (10) Business Days of its incurrence and (ii) such Indebtedness in
respect of credit or purchase cards is extinguished within sixty (60) days of
its incurrence;
          (m) Indebtedness of Excluded Foreign Subsidiaries, provided that such
Indebtedness is for working capital or general corporate purposes in an
aggregate principal amount not to exceed $8,050,000 at any time outstanding;
          (n) to the extent constituting Indebtedness, any earn-out or similar
obligations of any Group Member incurred in connection with Permitted
Acquisitions;
          (o) Indebtedness, and any Permitted Refinancing thereof, (i) of a
Person which became a Group Member after the Closing Date that existed at the
time such Person became a Group Member, provided that such Indebtedness was not
incurred in contemplation of such Person becoming a Group Member or
(ii) otherwise incurred in connection with a Permitted Acquisition and
subordinated to the Obligations on terms and conditions reasonably acceptable to
the Administrative Agent; provided, however, that all such Indebtedness under
this clause (o) shall not exceed $5,750,000 in the aggregate at any time
outstanding;
          (p) other Indebtedness of any Group Member (other than Holdings) not
exceeding in the aggregate at any time outstanding $1,725,000;
          (q) Indebtedness of Holdings or MedQuist owing to former officers,
directors, consultants and employees (or any spouses, ex-spouses or estates of
any of the foregoing) of a Group Member incurred in connection with the
repurchase of Stock and Stock Equivalents of Holdings or MedQuist that have been
issued to such Persons, provided that the amount of such Indebtedness pursuant
to this clause (q) shall not exceed an aggregate outstanding principal balance
of $5,000,000 at any time, and the Indebtedness pursuant to this clause (q)
shall
 

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be subordinated to the Obligations on terms and conditions reasonably acceptable
to the Required Purchasers; and
          (r) all customary premiums (if any), interest (including post-petition
interest), fees, expenses, charges and additional or contingent interest on
Indebtedness described in each of Sections 8.1(a) through (q) above.
          Section 8.2 Liens. No Group Member shall incur, maintain or otherwise
suffer to exist any Lien upon or with respect to any of its property, whether
now owned or hereafter acquired, except for the following:
          (a) Liens created pursuant to any Senior Loan Document;
          (b) Customary Permitted Liens of Group Members;
          (c) Liens existing on the date hereof and set forth on Schedule 8.2;
          (d) Liens on the property of any Group Member (other than Holdings)
securing Indebtedness of such Group Member permitted hereunder in reliance upon
Section 8.1(c); provided, however, that (i) such Liens exist prior to the
acquisition of, or attach substantially simultaneously with, or within 90 days
after, the acquisition, repair, improvement or construction of, such property
financed, whether directly or through a Permitted Refinancing, by such
Indebtedness and (ii) such Liens do not extend to any property of any Group
Member other than the property (and proceeds thereof) acquired or built, or the
improvements or repairs, financed, whether directly or through a Permitted
Refinancing, by such Indebtedness;
          (e) Liens on the property of Group Members securing the Permitted
Refinancing of any Indebtedness secured by any Lien on such property permitted
hereunder in reliance upon clause (c) or (d) above or this clause (e) without
any change in the property subject to such Liens;
          (f) Liens with respect to the Property of any Excluded Foreign
Subsidiary securing Indebtedness of such Excluded Foreign Subsidiary that is
permitted under Section 8.1(m);
          (g) Liens with respect to Indebtedness permitted under Section 8.1(e)
and (g), provided that (i) any Indebtedness owing by a Note Party to a Person
who is not a Note Party shall not be secured at any time unless such
Indebtedness is Junior Subordinated Debt and (ii) any Guaranty Obligation of a
Subsidiary that is not a Note Party may not be secured by Property of any other
Note Party;
          (h) Liens on Property which is the subject of a Capitalized Lease
Obligation permitted by Section 8.1(d);
          (i) Liens on Property acquired in connection with a Permitted
Acquisition that was subject to such Lien prior to such Permitted Acquisition to
the extent such Lien was not made in connection with or in contemplation of such
Permitted Acquisition and which only secures Indebtedness permitted to be
assumed in connection with such Permitted Acquisition or any Permitted
Refinancing thereof; and
 

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          (j) Liens on Property of Group Members not otherwise permitted by this
Section 8.2 so long as the aggregate principal amount of Indebtedness and other
obligations secured thereby does not exceed $1,150,000 at any time.
          Section 8.3 Investments. No Group Member shall make or maintain any
Investment except for the following:
          (a) Investments existing on the date hereof and set forth on
Schedule 8.3;
          (b) Investments in cash and Cash Equivalents;
          (c) (i) endorsements for collection or deposit in the Ordinary Course
of Business consistent with past practice, (ii) extensions of trade credit
arising or acquired in the Ordinary Course of Business and (iii) Investments
acquired in connection with the settlement of delinquent accounts arising in the
Ordinary Course of Business, in connection with the bankruptcy or reorganization
of suppliers or customers or as security for such claims, or upon the
foreclosure by a Note Party of its Lien with respect to any secured Investment;
          (d) Investments by Note Parties made as part of a Permitted
Acquisition and Investments held by any Person acquired as part of a Permitted
Acquisition (and not made in connection with or in contemplation of such
Permitted Acquisition);
          (e) Investments by (i) any Note Party in or to any other Note Party
(other than Holdings, except to the extent such Investment could be made as a
Restricted Payment to Holdings), (ii) any Note Party in or to a Group Member
which is not a Note Party not to exceed, for all such Investments, (x)
$4,600,000 in the aggregate outstanding at any time when the Consolidated Total
Leverage Ratio of Holdings is equal to or greater than 1.50:1.00 and (y)
$4,600,000 plus Additional Available Cash at any time when the Consolidated
Total Leverage Ratio of Holdings is less than 1.50:1.00 or (iii) a Group Member
which is not a Note Party to another Group Member and (y) any Investment
constituting an extension of credit to a Note Party described in clause (i) or
(iii), is expressly subordinated to the repayment of the Obligations;
          (f) loans and advances to officers, directors, consultants and
employees of a Group Member (i) to finance the purchase of Stock and Stock
Equivalents of Holdings or MedQuist, provided that the amount of such loans and
advances used to acquire such Stock and Stock Equivalents shall not exceed an
aggregate outstanding principal balance of $575,000 at any time, (ii) for
reasonable and customary business related travel expenses, entertainment
expenses and moving expenses, and similar expenses, in each case, incurred in
the Ordinary Course of Business and with loans and advances for all such
expenses not to exceed $575,000 in the aggregate outstanding at any time, and
(iii) for additional purposes not contemplated by clause (i) or (ii) above,
provided that the aggregate principal amount at any time outstanding with
respect to this clause 8.3(f)(iii) shall not exceed $575,000;
          (g) Investments received as the non-cash portion of consideration
received in connection with transactions permitted pursuant to Sections 8.4(a),
(d) or (e); provided that the aggregate principal amount at any time outstanding
with respect to such Investments received under Section 8.4(a) shall not exceed
$1,150,000;
          (h) Investments made to repurchase or retire Stock or Stock
Equivalents of Holdings (or any direct or indirect parent thereof) or MedQuist
in accordance with Section 8.5(d);
 

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          (i) Guarantees by a Group Member of leases (other than of Capital
Leases) or of other obligations that do not constitute Indebtedness, in each
case, entered into in the Ordinary Course of Business;
          (j) Guarantees permitted under Section 8.1;
          (k) advances made in connection with purchases of goods or services in
the Ordinary Course of Business;
          (l) deposits of cash made in the Ordinary Course of Business to secure
performance of operating leases;
          (m) Investments in Hedging Agreements and Interest Rate Contracts
permitted under Section 8.1(f);
          (n) Investments in the common Stock of MedQuist made in connection
with the Exchange Offer; and
          (o) other Investments not exceeding (i) $2,300,000 in the aggregate
since the Closing Date plus (ii) Additional Available Cash to the extent the
Consolidated Total Leverage Ratio of Holdings both before and after giving
effect to such Investment is less than 1.50:1.00.
          Section 8.4 Asset Sales. No Group Member shall Sell any of its
Property (other than cash), enter into any Sale and Leaseback Transaction or
(other than with respect to Holdings) issue shares of its own Stock, except for
the following:
          (a) In each case to the extent entered into in the Ordinary Course of
Business (i) obsolete, worn-out, used or surplus Property to the extent such
Property is not necessary for the operation of the Group Members’ businesses;
(ii) inventory, equipment and goods sold; and (iii) cash and Cash Equivalents;
          (b) (i) any Sale of any property by (A) any Note Party to any other
Note Party (other than Holdings, except to the extent that such property could
be distributed as a Restricted Payment to Holdings) and (B) any Group Member
that is not a Note Party to any other Group Member that is not a Note Party,
(ii) any Sale by any Note Party to a Group Member that is not a Note Party and
any Sale by a Group Member that is not a Note Party to any Note Party provided
that all such Sales do not exceed in the aggregate (x) $1,150,000 for all such
sales made at any time when the Consolidated Total Leverage Ratio of Holdings is
equal to or greater than 1.5:1.0, (y) $5,750,000 for all such sales made at any
time when the Consolidated Total Leverage Ratio of Holdings is equal to or
greater than 1.0:1.0 and less than 1.5:1.0 and (z) $11,500,000 for all such
sales at any time when the Consolidated Total Leverage Ratio of Holdings is less
than 1.0:1.0, and provided further that to the extent any such Sale under this
clause (ii) is not for fair market value, the resulting Investment by such Note
Party constitutes a Permitted Investment under Sections 8.3(e) or (o), (iii) any
Restricted Payment by any Group Member permitted pursuant to Section 8.5 and
(iv) any distribution by Holdings of the proceeds of Restricted Payments from
any other Group Member to the extent permitted in Section 8.5;
          (c) (i) any Sale or issuance by Holdings of its own Stock, (ii) any
Sale or issuance by any Group Member of its own Stock to any Note Party, or by
any Group Member that is not a Note Party to another Group Member that is not a
Note Party to the extent that the
 

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resulting Investment is a Permitted Investment under Section 8.3(e); provided,
however, that the proportion of the Stock of any Group Member (both on an
outstanding and fully-diluted basis) held by the Note Parties, taken as a whole,
is not reduced as a result of such Sale or issuance and (iii) to the extent
necessary to satisfy any Requirement of Law in the jurisdiction of incorporation
of any Group Member, any Sale or issuance by such Group Member of its own Stock
constituting directors’ qualifying shares or nominal holdings;
          (d) dispositions of Property not otherwise permitted hereunder that
are made for fair market value; provided, that (i) at the time of any
disposition, no Default or Event of Default shall exist or shall result from
such disposition, (ii) not less than 75% of the aggregate sales price from such
disposition shall be paid in cash or Cash Equivalents, (iii) the aggregate fair
market value of all Property so sold by the Group Members, together, shall not
exceed in any Fiscal Year the greater of (x) one percent (1%) of the total
assets of the Group Members reflected on the Financial Statements delivered to
the Administrative Agent in accordance with Section 6.1 for the preceding Fiscal
Year, and (y) $2,875,000 and (iv) after giving effect to such disposition, the
Note Parties are in compliance on a pro forma basis with the covenants set forth
in Article 5, recomputed for the most recent Fiscal Quarter for which Financial
Statements have been delivered;
          (e) other dispositions of Property the fair market value of which
shall not exceed, in the aggregate, $575,000;
          (f) any (i) sale or discounting of accounts receivable arising in the
Ordinary Course of Business in connection with the compromise or collection
thereof and (ii) involuntary sale, transfer, assignment or other disposition
resulting from a Property Loss Event upon the receipt of the applicable net
proceeds for such Property Loss Event;
          (g) licenses, sublicenses, leases or subleases granted in the Ordinary
Course of Business not interfering with the business of the Group Members in any
material respect;
          (h) Property to the extent that (i) such Property is exchanged for
credit against the purchase price of similar replacement Property or (ii) the
proceeds of such disposition are promptly applied to the purchase price of such
replacement Property;
          (i) the Group Members may effect any transaction permitted by
Section 8.3, 8.5 or 8.7;
          (j) lease of any tangible Property and licensing or contribution of
Intellectual Property pursuant to joint marketing arrangements with other
Persons, in each case, in the Ordinary Course of Business;
          (k) the RCM Sale;
          (l) the A-Life Sale; and
          (m) dispositions of any Property between or among the Group Members as
a substantially concurrent interim disposition in connection with a disposition
of such Property otherwise permitted pursuant to clauses (a) through (k) above.
 

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          Section 8.5 Restricted Payments. No Group Member shall declare, pay or
make any Restricted Payment except for the following (and Holdings shall not use
the proceeds of any Restricted Payment made in reliance under clause (c) below
other than as set forth in such clause (c)):
          (a) Restricted Payments (i) by a Note Party to any Note Party other
than Holdings (except as otherwise permitted under any other clause of this
Section 8.5) and (ii) by any Group Member that is not a Note Party to any Group
Member;
          (b) dividends and distributions declared and paid on the common Stock
of any Group Member ratably to the holders of such common Stock and payable only
in common Stock of such Group Member;
          (c) cash dividends or distributions on the Stock of the Group Members
(other than Holdings) to Holdings paid and declared solely for the purpose of
funding the following:
     (i) payments by Holdings in respect of taxes then due and owing by Holdings
in respect of the other Group Members;
     (ii) ordinary operating expenses of Holdings; provided, however, that the
amount of such cash dividends paid in any Fiscal Year shall not exceed
$6,000,000 in the aggregate;
     (iii) payments with respect to withholding or similar taxes payable or
expected to be payable by or with respect to any present or former employee,
director, manager or consultant (or their respective Affiliates, estates or
immediate family members) for any repurchases of Stock or Stock Equivalents in
Holdings including deemed repurchases in connection with the exercise of stock
options, provided in each case that payments made under this clause (iii) shall
not exceed $500,000 in the aggregate; and
     (iv) to pay the consideration necessary to consummate any Permitted
Acquisition in accordance with the agreements evidencing such Permitted
Acquisition;
provided, however, that no action that would otherwise be permitted hereunder in
reliance upon this clause (c) (other than clause (i) or (ii) above) shall be
permitted if a Default is then continuing or would result therefrom;
          (d) the Group Members may redeem, acquire, retire or repurchase (and
the Group Members may declare and pay cash Restricted Payments to another Group
Member (or any direct or indirect parent thereof), the proceeds of which are
used to so redeem, acquire, retire or repurchase) shares of Stock or Stock
Equivalents of Holdings or any Excluded Foreign Subsidiary (or any options or
warrants or stock appreciation rights issued with respect to any of such Stock
or Stock Equivalents) (or to allow Holdings (or any direct or indirect parent
thereof) or any Excluded Foreign Subsidiary to so redeem, retire, acquire or
repurchase its Stock or Stock Equivalents) held by current or former officers,
managers, consultants, directors and employees (or their respective spouses,
former spouses, successors, executors, administrators, heirs, legatees or
distributees) of a Group Member (or any direct or indirect parent thereof), with
the proceeds of
 

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cash Restricted Payments from a Group Member, upon the death, disability,
retirement or termination of employment of any such Person or otherwise in
accordance with any stock option or stock appreciation rights plan, any
management, director and/or employee stock ownership or incentive plan, stock
subscription plan, employment termination agreement or any other employment
agreements or equity holders’ agreement; provided that
     (i) no Default or Event of Default has occurred and is continuing or would
arise as a result of such Restricted Payment;
     (ii) the aggregate Restricted Payments permitted in any fiscal year of
Holdings shall not exceed $5,000,000; and
     (iii) with respect to any redemption of Stock or Stock Equivalents in an
Excluded Foreign Subsidiary or Stock or Stock Equivalents held by current or
former officers, managers, consultants, directors and employees (or their
respective spouses, former spouses, successors, executors, administrators,
heirs, legatees or distributees) of an Excluded Foreign Subsidiary, such
Restricted Payment shall be funded solely by such Excluded Foreign Subsidiary or
with the proceeds of an Investment in such Excluded Subsidiary permitted under
Section 8.3 hereof;
          (e) Holdings may redeem in whole or in part any of its Stock or Stock
Equivalents for another class of Stock or Stock Equivalents of Holdings or
rights to acquire Stock or Stock Equivalents in Holdings, provided that (i) the
funds used to effect such redemption shall be provided solely from concurrent
equity contributions or issuances of new shares of Holdings’ Stock or Stock
Equivalents and (ii) any terms and provisions material to the interests of the
Purchasers, when taken as a whole, contained in such other class of Stock or
Stock Equivalents are at least as advantageous to the Purchasers as those
contained in the Stock or Stock Equivalents redeemed thereby; and
          (f) Restricted Payments by the Group Members to fund Investments
permitted by Sections 8.3(e) or (o);
          (g) cash dividends and distributions by any Group Member to fund
indemnification payments owed by Holdings to selling shareholders under
stockholders or registration rights agreements entered into in connection with
the Exchange Offer or the Holdings IPO or owed by Holdings under the Sponsor
Consulting Agreement; provided, that at the time of any such dividend or
distribution, no Default or Event of Default shall exist or shall result
therefrom;
          (h) repurchases of Stock of selling shareholders other than CBay in
connection with the Exchange Offer or the Holdings IPO for consideration not to
exceed $5,000,000 in the aggregate; provided, that at the time of any such
repurchase, no Default or Event of Default shall exist or shall result
therefrom;
          (i) cash dividends and distributions by any Group Member to fund
Holdings’ obligation arising under the Sponsor Consulting Agreement to reimburse
Sponsor and Lehman for out-of-pocket expenses not to exceed $250,000 per Fiscal
Year; provided, that at the time of any such dividend or distribution, no
Default or Event of Default shall exist or shall result therefrom; and

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          (j) other Restricted Payments by the Group Members not to exceed
$500,000 in the aggregate during the term of this Agreement plus, to the extent
the Consolidated Total Leverage Ratio of Holdings is less than 1.00:1.00 both
before and after giving effect to such Restricted Payment and any Indebtedness
incurred in connection therewith, Additional Available Cash; provided, that at
the time any such Restricted Payment is made no Default or Event of Default
shall exist or shall result therefrom.
          Section 8.6 Prepayment of Indebtedness. No Group Member shall prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity
date thereof any Junior Subordinated Debt, or set apart any property for such
purpose, whether to a sinking fund, a similar fund or otherwise, make any
payment in violation of any subordination or intercreditor terms applicable to
any such Indebtedness.
          Section 8.7 Fundamental Changes. No Group Member shall merge,
consolidate or amalgamate with any Person, or liquidate or dissolve, except for
the following:
          (a) to consummate any Permitted Acquisition;
          (b) a Note Party may merge, amalgamate or consolidate with, or
dissolve or liquidate into any other Note Party (other than Holdings), or may
merge, amalgamate or consolidate with any other Person that is incorporated or
otherwise organized under the laws of a state of the United States of America,
provided that (i) an Issuer shall be the continuing or surviving entity, or if
an Issuer is not involved with such merger, amalgamation or consolidation, such
Guarantor or such other Person, as the case may be, shall be the continuing or
surviving entity, (ii) if such other Person constitutes the continuing or
surviving entity, it shall have become a Guarantor simultaneously with such
transaction and satisfied the requirements of Section 7.10, (iii) no Default or
Event of Default shall have occurred and be continuing at the date of such
merger, amalgamation, consolidation, dissolution or liquidation or would result
therefrom and (iv) the Administrative Agent shall have a first priority Lien on
all of the Stock and all Stock Equivalents on a fully diluted basis in the
surviving Issuer, Guarantor or such other Person and on all Property of the
surviving Issuer or Guarantor or to the extent required by Section 7.10, such
other Person;
          (c) Holdings may merge, amalgamate or consolidate with, or dissolve or
liquidate into, any other Note Party; provided that (i) no Default or Event of
Default shall have occurred and be continuing at the date of such merger,
amalgamation consolidation, dissolution or liquidation or would result
therefrom, (ii) Holdings shall be the surviving entity and after giving effect
to such merger, amalgamation consolidation, dissolution or liquidation Holdings
shall be in compliance with the requirements of Section 8.8(b) and (iii) the
requirements of Section 7.10 shall have been satisfied;
          (d) any Excluded Foreign Subsidiary may merge, amalgamate or
consolidate with, or dissolve or liquidate into, another Excluded Foreign
Subsidiary, provided that no Default or Event of Default shall have occurred and
be continuing at the date of such merger, amalgamation consolidation,
dissolution or liquidation or would result therefrom and the requirements of
Section 7.10 shall have been satisfied;
          (e) any Guarantor (other than Holdings) may merge, amalgamate or
consolidate with or into any Group Member that is not a Note Party; provided
that if such

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Guarantor is not the surviving entity or the surviving entity has not satisfied
the requirements of Section 7.10, such merger, amalgamation or consolidation
shall be deemed to be an “Investment” and subject to the limitations set forth
in Section 8.3(e) or (o);
          (f) any Group Member (other than Holdings or an Issuer) may liquidate
or dissolve if (x) the Issuers determine in good faith that such liquidation or
dissolution is in the best interests of the Issuers and is not materially
disadvantageous to the Purchasers and (y) to the extent such Group Member is a
Guarantor, any Property not otherwise disposed of or transferred in accordance
with Sections 8.3 or 8.4, or, in the case of any such business of such Group
Member discontinued, such business, shall be transferred to, or otherwise owned
or conducted by, another Guarantor or an Issuer after giving effect to such
liquidation or dissolution
          (g) Holdings may convert to a Delaware corporation pursuant to the
provisions of Section 265 of the Delaware Corporation Law; and
          (h) to the extent not otherwise permitted by this Section 8.7, the
Group Members may consummate (i) a merger, dissolution, liquidation,
consolidation or amalgamation, the purpose of which is to effect a disposition
permitted pursuant to Section 8.4 or (ii) a merger the purpose of which is to
effect an Investment permitted pursuant to Section 8.3, provided that, in each
case, (x) no Default or Event of Default would result from the consummation
thereof, (y) if such merger, dissolution, liquidation, consolidation or
amalgamation undertaken to effect an Investment pursuant to clause (ii) above
involves an Issuer or a Guarantor, such Issuer, or if an Issuer is not involved,
such Guarantor, shall be the continuing or surviving entity and (z) the parties
shall have satisfied the requirements of Section 7.10.
          Section 8.8 Change in Nature of Business. (a) No Group Member (other
than Holdings) shall engage in any material line of business substantially
different from those lines of business carried on by it on the date hereof or
any business reasonably related thereto, complementary thereto, ancillary
thereto or a reasonable extension thereof.
          (b) Holdings, and prior to the MedQuist Consolidation Date, MedQuist,
shall not engage in any business activities or own any Property other than
(i) ownership of the Stock and Stock Equivalents of its Subsidiaries or as
permitted under Section 8.3, (ii) activities incidental to maintenance of its
corporate existence or as otherwise permitted under this Agreement (including
the payment of tax payables and other corporate overhead expenses), (iii) the
Related Transactions, the Exchange Offer and the Holdings IPO, (iv) performing
its obligations incidental to any of the foregoing under the Note Documents,
other Indebtedness permitted by this Agreement and documentation entered into in
connection with the Related Transactions, the Exchange Offer, the Holdings IPO
or any Permitted Acquisition or Investment permitted by Section 8.3, (v)
entering into and consummating transactions expressly permitted under this
Agreement and (vi) making Restricted Payments permitted by Section 8.5.
          Section 8.9 Transactions with Affiliates. No Group Member shall,
except as otherwise expressly permitted herein, enter into any other transaction
with, or for the benefit of, any Affiliate of any Issuer that is not a Note
Party (including Guaranty Obligations with respect to any obligation of any such
Affiliate), except for:
          (a) transactions expressly permitted by this Agreement;

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          (b) transactions among Note Parties;
          (c) transactions among Group Members that are not Note Parties;
          (d) tax sharing arrangements on customary terms entered into among the
Group Members to provide for the allocation of the tax liability to be
discharged with a Restricted Payment under Section 8.5(c)(i);
          (e) any issuance of Stock or Stock Equivalents in Holdings, or other
payments, awards or grants in cash or Stock or Stock Equivalents of Holdings
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the board of directors of Holdings and in accordance
with Requirements of Law, and any issuance of Stock of MedQuist upon the
exercise of stock options existing on the Closing Date;
          (f) employment and severance arrangements and health, disability and
similar insurance or benefit plans between Group Members and their respective
directors, officers, employees (including management and employee benefit plans
or agreements, subscription agreements or similar agreements pertaining to the
repurchase of Stock and Stock Equivalents pursuant to put/call rights or similar
rights with current or former employees, officers or directors and stock option
or incentive plans and other compensation arrangements) in the Ordinary Course
of Business or as otherwise approved by the board of directors of the applicable
Group Member;
          (g) payment of reasonable compensation to officers and employees for
actual services rendered to Group Members (other than an Excluded Foreign
Subsidiary unless such payment is funded solely by such Excluded Foreign
Subsidiary or with the proceeds of an Investment in such Excluded Foreign
Subsidiary permitted under Section 8.3 hereof) in the Ordinary Course of
Business;
          (h) the payment of customary fees and reasonable out-of-pocket costs
to, and indemnities provided on behalf of, directors, managers, consultants
(other than Sponsor or its Affiliates), officers and employees of Group Members
in the Ordinary Course of Business to the extent attributable to the ownership
or operation of any Group Member (other than an Excluded Foreign Subsidiary
unless such payment is funded solely by such Excluded Foreign Subsidiary or with
the proceeds of an Investment in such Excluded Foreign Subsidiary permitted
under Section 8.3);
          (i) the Related Transactions, the Exchange Offer, the Holdings IPO and
the payment of expenses (subject to the limitations set forth in clauses (j) and
(k) below with respect to the expenses described therein) with respect thereto;
          (j) reimbursement of expenses of selling shareholders by Holdings
required under stockholders or registration rights agreements entered into in
connection with the Exchange Offer or the Holdings IPO in an aggregate amount
not to exceed $2,500,000; provided, that at the time of any such payment, no
Default or Event of Default shall exist or shall result therefrom;
          (k) payments by Holdings to the Sponsor or directors of Holdings
designated by the Sponsor required under agreements to be entered into by
Holdings in connection with the Exchange Offer or the Holdings IPO in an
aggregate amount not to exceed $12,000,000;

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provided, that at the time of any such payment, no Default or Event of Default
shall exist or shall result therefrom;
          (l) transactions pursuant to permitted agreements in existence or
contemplated on the Closing Date and set forth on Schedule 8.9 or any amendment
thereto to the extent such an amendment is not adverse, taken as a whole, to the
Purchasers in any material respect;
          (m) Restricted Payments permitted under Section 8.5;
          (n) mergers, consolidations, amalgamations, liquidations and
dissolutions permitted under Section 8.7;
          (o) Investments permitted by Section 8.3;
          (p) payments to the Sponsor or Lehman in the Stock of Holdings under
the Sponsor Consulting Agreement to satisfy the remaining fees payable
thereunder;
          (q) payments to Sponsor or shareholders of any Group Member to the
extent such payments could be made as Restricted Payments under Sections 8.5(g),
(h) and (i); and
          (r) all other transactions entered into pursuant to the reasonable
requirements of the business of such Group Member upon fair and reasonable terms
substantially as favorable to such Group Member as would be obtained in a
comparable arm’s length transaction with a Person not an Affiliate of any Group
Member.
          Section 8.10 Third-Party Restrictions on Indebtedness, Liens,
Investments or Restricted Payments. No Group Member shall incur or otherwise
suffer to exist or become effective any Contractual Obligation limiting the
ability of any Subsidiary of Holdings to make Restricted Payments to, or loans
or advances to, or repay Indebtedness or Sell property to, any Group Member
which is a direct or indirect parent entity of such Subsidiary, except
(i) Contractual Obligations that exist on the Closing Date and (to the extent
not otherwise permitted by this Section 8.10 are listed on Schedule 8.10 hereto)
any refinancings and extensions of any such Contractual Obligations if the terms
and conditions thereof, taken as a whole, do not materially expand the scope of
such limitation, (ii) Contractual Obligations representing Indebtedness of a
Group Member that is not a Guarantor to the extent such Indebtedness is
permitted by Section 8.1, (iii) Contractual Obligations that are customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted under this Agreement, that is applicable solely to
such joint venture, (iv) Contractual Obligations that are binding on a Group
Member at the time such Group Member first becomes a Group Member, so long as
such Contractual Obligations were not entered into in contemplation of such
Person becoming a Group Member, (v) Contractual Obligations that arise pursuant
to agreements entered into with respect to any sale, transfer, lease or other
disposition of Property or a Person permitted by Section 8.4 and apply solely to
the Property or Person to be so sold, transferred, leased or otherwise disposed
of, (vi) Contractual Obligations that are customary restrictions on leases,
subleases, licenses or asset sale agreements otherwise permitted hereby so long
as such restrictions relate only to the Property subject thereto,
(vii) customary net worth provisions contained in real property leases entered
into by a Group Member, so long as

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the Issuers have determined in good faith that such net worth provisions could
not reasonably be expected to impair the ability of the Group Members to meet
their respective ongoing obligations and (viii) restrictions contained in the
Note Documents.
          Section 8.11 Modification of Certain Documents. No Group Member shall
do any of the following:
          (a) waive or otherwise modify any term of any Constituent Document of
any Note Party (including the terms of any of their outstanding Stock or Stock
Equivalents), except for those modifications and waivers that do not adversely
affect the interests of the Purchasers;
          (b) waive or otherwise modify any term of any Material Agreement
except for those modifications and waivers that would not reasonably be expected
to have a Material Adverse Effect; and
          (c) waive or otherwise modify any term of any Junior Subordinated Debt
except in a manner permitted by the subordination provisions therein or the
subordination agreement applicable thereto, as applicable.
          Section 8.12 Fiscal Year. No Group Member shall change its Fiscal Year
or its method for determining Fiscal Quarters or fiscal months.
          Section 8.13 Margin Regulations. No Group Member shall use all or any
portion of the proceeds of any credit extended hereunder to purchase or carry
margin stock (within the meaning of Regulation U of the Federal Reserve Board)
in contravention of Regulation U of the Federal Reserve Board.
          Section 8.14 Compliance with ERISA. No ERISA Affiliate shall cause or
suffer to exist (a) any event that could result in the imposition of a Lien with
respect to any Title IV Plan or Multiemployer Plan or (b) any other ERISA Event,
that would, in the aggregate, be reasonably expected to have a Material Adverse
Effect. No Group Member shall cause or suffer to exist any event that could
result in the imposition of a Lien with respect to any Benefit Plan.
          Section 8.15 Hazardous Materials. No Group Member shall cause or allow
any Release of any Hazardous Material at, to or from any real property owned,
leased, subleased or otherwise operated or occupied by any Group Member that
would violate any Environmental Law, form the basis for any Environmental
Liabilities, other than such violations, Environmental Liabilities and effects
that would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
          Section 8.16 Limitation on Layering Indebtedness Notwithstanding the
provisions of Section 8.1, the Note Parties will not, and will not permit any of
their Subsidiaries to, directly or indirectly, incur or suffer to exist any
Indebtedness that is both contractually subordinate or junior in right of
payment to the Senior Loan Obligations and senior in right of payment to the
Obligations, excluding the effect of any Liens which are Permitted Liens.
          Section 8.17 Excess Cash Flow. Unless the Purchasers otherwise agree
in writing, the Issuers shall not agree or otherwise permit the percentage of
“Excess Cash Flow”, or any such similar concept, required to be paid to the
Senior Lenders under the Senior Credit Agreement (as in effect on the date
hereof), to be reduced; provided, that if the Consolidated Total Leverage Ratio
is 2.00:1.00 or less (A) for the last Fiscal Quarter of such corresponding
Fiscal Year for which such Excess Cash Flow amount has been determined (B) from
such date until such Excess Cash Flow payment is actually made to the Senior
Lenders and (C) on a pro forma basis for the first full Fiscal Quarter ending
after such payment, then notwithstanding this Section 8.17, the Issuers shall be
permitted to pay a lesser percentage of Excess Cash Flow than such amounts
otherwise required hereby.
          Section 8.18 Notwithstanding anything contained in this Article 8,
during the period commencing on the Closing Date until, but excluding, the
Funding

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Date, the Group Members shall not be obligated to comply with the covenants in
this Article 8 to the extent such covenants would result in a breach or cause a
default under any other Contractual Obligation to which the Group Members are
party which was (i) effective prior to the Closing Date, (ii) not entered into
in contemplated of entering into this Agreement or the other Note Documents and
(iii) not a Contractual Obligation to which only the Group Members are a party.
ARTICLE 9
EVENTS OF DEFAULT
          Section 9.1 Definition. Each of the following shall be an Event of
Default:
          (a) the Issuers shall fail to pay (i) any principal of or premium on
any Note when the same becomes due and payable or (ii) any interest on any Note,
any fee under any Note Document or any other Obligation (other than those set
forth in clause (i) above) and, in the case of this clause (ii), such
non-payment continues for a period of five (5) days after the due date therefor;
or
          (b) any representation, warranty or certification made or deemed made
by any Note Party (or any Responsible Officer thereof) in any Note Document
shall prove to have been incorrect in any material respect (without duplication
of any materiality qualifier contained herein or therein) when made or deemed
made; or
          (c) any Note Party shall fail to comply with (i) any provision of
Article 5 (Financial Covenants), Section 6.2(a)(i) (Other Events), Section 7.1
(Maintenance of Corporate Existence), Section 7.9 (Use of Proceeds) or Article 8
(Negative Covenants), (ii) any provision of Section 6.1 (Financial Statements)
if, in the case of this clause (ii), such failure shall remain unremedied for
15 days after the earlier of (A) the date on which a Responsible Officer of any
Note Party becomes aware of such failure and (B) the date on which notice
thereof shall have been given to the Issuer Representative by the Purchasers or
(iii) any other provision of any Note Document if, in the case of this clause
(iii), such failure shall remain unremedied for 30 days after the earlier of
(A) the date on which a Responsible Officer of any Note Party becomes aware of
such failure and (B) the date on which notice thereof shall have been given to
the Issuer Representative by the Purchasers; or
          (d) (i) any Group Member shall fail to make beyond any applicable cure
period any payment when due (whether due because of scheduled maturity, required
prepayment provisions, acceleration, demand or otherwise) on any Indebtedness of
any Group Member (other than the Obligations or the Senior Loan Obligations)
and, in each case, such failure relates to Indebtedness having a principal
amount of $5,000,000 or more, (ii) any other event shall occur or condition
shall exist beyond any applicable cure period under any Contractual Obligation
relating to any Indebtedness (other than the Obligations) having a principal
amount of $5,000,000 or more or any Senior Loan Obligations, if the effect of
such event or condition is to accelerate the maturity of such Indebtedness or
(iii) any Indebtedness (other than the Obligations) having a principal amount of
$5,000,000 or more or any Senior Loan Obligations shall become or be declared to
be due and payable, or be required to be prepaid, redeemed, defeased or
repurchased (other than by a regularly scheduled required prepayment or a
mandatory prepayment), prior to the stated maturity thereof; or

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          (e) (i) any Group Member shall generally not pay its debts as such
debts become due, shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors,
(ii) any proceeding shall be instituted by or against any Group Member seeking
to adjudicate it a bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, composition of it
or its debts or any similar order, in each case under any Requirement of Law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee, conservator, liquidating agent, liquidator, other similar
official or other official with similar powers, in each case for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against (but not by or with the consent of) any Group Member, either
such proceedings shall remain undismissed or unstayed for a period of 60 days or
more or any action sought in such proceedings shall occur (including without
limitation any entry of an order for relief in any such proceeding) or (iii) any
Group Member shall take any corporate or similar action to authorize any action
described in clause (i) or (ii) above; or
          (f) one or more judgments, orders or decrees (or other similar
process) shall be rendered against any Group Member (i)(A) in the case of
monetary judgments, orders and decrees, involving an aggregate amount (excluding
amounts adequately covered by insurance payable to any Group Member, to the
extent the relevant insurer has not denied coverage therefor) in excess of
$5,000,000 or (B) in the case of non-monetary judgments, that would have, in the
aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings shall
have been commenced by any creditor upon any such judgment, order or decree or
(B) such judgment, order or decree shall not have been vacated or discharged for
a period of 60 consecutive days and there shall not be in effect (by reason of a
pending appeal or otherwise) any stay of enforcement thereof; or
          (g) except pursuant to a valid, binding and enforceable termination or
release permitted under the Note Documents and executed by the Purchasers or as
otherwise expressly permitted under any Note Document, (i) any material
provision of any Note Document shall, at any time after the delivery of such
Note Document, fail to be valid and binding on, or enforceable (other than
pursuant to the express terms thereof) against, or shall be revoked or
repudiated by any Note Party party thereto, (ii) any subordination provision set
forth in any document governing Junior Subordinated Debt shall, in whole or in
part, terminate or otherwise fail or cease to be valid and binding on, or
enforceable against, any holder of Junior Subordinated Debt or any such holder
shall so state in writing, or (iii) any Group Member shall state in writing that
any of the events described in clause (i) shall have occurred; or
          (h) any Material Agreement shall be terminated for any reason unless
(i) such Material Agreement is replaced with an agreement that is not materially
less favorable to the Group Members, (ii) existing Material Agreements provide
substantially the same benefits as such terminated Material Agreement as are
necessary for the proper conduct of such Group Member’s business as conducted as
of the date of such termination, (iii) such Group Member has an alternative
source of obtaining such benefits (including by internal development) or
(iv) the termination of such Material Agreement could not reasonably be expected
to have a Material Adverse Effect; or
          (i) any Holding Company shall incur any Indebtedness or issue any
Stock or Stock Equivalent and use the proceeds of such incurrence or issuance to
make dividend, payment or other distribution with respect to the holders of its
Stock or Stock Equivalents;

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          (j) there shall occur any Change of Control; or
          (k) either (i) one or more ERISA Events shall have occurred,
(ii) there is or arises an Unfunded Pension Liability with respect to any Title
IV Plan, or (iii) there is or arises any potential Withdrawal Liability, if any
ERISA Affiliate were to withdraw completely from one or more Multiemployer
Plans, and the liability of any ERISA Affiliate contemplated by the foregoing
clauses (i), (ii) and (iii), either individually or in the aggregate, has had,
or would reasonably be expected to have, a Material Adverse Effect.
          Section 9.2 Remedies. During the continuance of any Event of Default,
the Required Purchasers may, by notice to the Issuer Representative and in
addition to any other right or remedy provided under any Note Document or by any
applicable Requirement of Law, declare immediately due and payable all or part
of any Obligation (including any accrued but unpaid interest thereon, whether
payable in cash or in kind), whereupon the same shall become immediately due and
payable, without presentment, demand, protest or further notice or other
requirements of any kind, all of which are hereby expressly waived by Holdings
and each Issuer (and, to the extent provided in any other Note Document, other
Note Parties); provided, however, that, effective immediately upon the
occurrence of the Events of Default specified in Section 9.1(e)(ii), each
Obligation (including in each case any accrued all accrued but unpaid interest
thereon) shall automatically become and be due and payable, without presentment,
demand, protest or further notice or other requirement of any kind, all of which
are hereby expressly waived by Holdings and each Issuer (and, to the extent
provided in any other Note Document, any other Note Party).
ARTICLE 10
RESERVED
ARTICLE 11
MISCELLANEOUS
          Section 11.1 Amendments, Waivers, Etc. (a) No amendment or waiver of
any provision of any Note Document and no consent to any departure by any Note
Party therefrom shall be effective unless the same shall be in writing and
signed by the Required Purchasers and the Issuers; provided, however, that no
amendment, consent or waiver shall, unless in writing and signed by each
Purchaser directly affected thereby, in addition to any other Person the
signature of which is otherwise required pursuant to any Note Document, do any
of the following:
          (i) [Reserved.];
          (ii) reduce (including through release, forgiveness, assignment or
otherwise) (A) the principal amount of, the interest rate on, any outstanding
Note owing to such Purchaser or (B) any fee or accrued interest payable to such
Purchaser hereunder; provided, however, that this clause (ii) does not apply to
(x) any reduction in incremental interest or fees payable during the continuance
of an Event of Default or to any payment of any such incremental interest or
fees;
          (iii) waive or postpone any scheduled maturity date or other scheduled
date fixed for the payment, in whole or in part, of principal of or interest on

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any Note or fee owing to such Purchaser; provided, however, that this clause
(iii) does not apply to any change to mandatory prepayments, including those
required under Section 2.6;
          (iv) release all or substantially all of the Guarantors from their
guaranty of the Obligations of the Issuers;
          (v) reduce or increase the proportion of Purchasers required for the
Purchasers (or any subset thereof) to take any action hereunder or change the
definition of the terms “Required Purchasers”, “Pro Rata Share” or “Pro Rata
Outstandings”; or
          (vi) amend Section 11.9 (Sharing of Payments), Section 2.10
(Application of Payments) or this Section 11.1;
it being agreed that all Purchasers shall be deemed to be directly affected by
an amendment, consent or waiver of the type described in the preceding clauses
(v) and (vi), and provided, further, that the consent of the Issuers shall not
be required to change any order of priority set forth in Section 2.10(c).
Notwithstanding the foregoing or anything else set forth herein to the contrary,
no Sponsor Affiliated Purchaser shall have any voting or consent rights with
respect to any matter under or with respect to any Note Document or constitute a
“Purchaser” (or be, or have its Notes included in the determination of “Required
Purchasers” or “Purchasers directly affected”) under or with respect to any
provisions in any Note Document governing voting or consent rights, provided
that (A) the principal of a Sponsor Affiliated Purchaser’s Notes may not be
reduced or forgiven, and (B) the interest rate applicable to Obligations owing
to a Sponsor Affiliated Purchaser may not be reduced in such a manner that by
its terms affects such Purchaser more adversely than other Purchasers, in each
case without the consent of such Purchaser.
          (b) Each waiver or consent under any Note Document shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on any Note Party shall entitle any Note Party to
any notice or demand in the same, similar or other circumstances. No failure on
the part of any Purchaser to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
          Section 11.2 Assignments and Participations; Binding Effect. (a)
Binding Effect. This Agreement shall become effective when it shall have been
executed by Holdings, the Issuers and the Purchasers. Thereafter, it shall be
binding upon and inure to the benefit of, but only to the benefit of, Holdings,
the Issuers and the Purchasers and, in each case, their respective successors
and permitted assigns. Except as expressly provided in any Note Document, none
of Holdings or the Issuers shall have the right to assign any rights or
obligations hereunder or any interest herein.
          (b) Right to Assign. Each Purchaser may at any time sell, transfer,
negotiate or assign all or a portion of its rights and obligations hereunder
(including all or a portion of its rights and obligations with respect to the
Notes) to (i) any existing Purchaser, (ii) any Affiliate of any existing
Purchaser which is under common control with such Purchaser or (iii) any other
Person acceptable to the Required Purchasers, provided that, in the absence of
an Event of Default, Required Purchasers may not assign any portion of its
rights and obligations hereunder to any Person pursuant to clause (iii) who has
been designated as unacceptable by Issuers in a

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writing delivered to and agreed to by the initial Purchasers prior to the
Closing Date; provided further that no sale shall be made to a Group Member or
an Affiliate of a Group Member (other than a Sponsor Affiliated Purchaser).
Sponsor Affiliated Purchasers shall have no rights to receive notice of, attend
or participate in any meetings with other Purchasers, receive information
requested or prepared on behalf of the Purchasers, or otherwise have any rights
of a Purchaser hereunder, other than the right to receive payments required
hereunder.
          (c) [Reserved.]
          (d) Effectiveness. Subject to the recording of an Assignment by the
Issuer Representative in the Register pursuant to Section 2.12(b), (i) the
assignee thereunder shall become a party hereto and, to the extent that rights
and obligations under the Note Documents have been assigned to such assignee
pursuant to such Assignment, shall have the rights and obligations of a
Purchaser, including the obligation to deliver tax forms pursuant to Section
2.17(f), (ii) any applicable Note shall be transferred to such assignee through
such entry and (iii) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment, relinquish its rights (except for those surviving the payment in
full of the Obligations) and be released from its obligations under the Note
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment covering all or the
remaining portion of an assigning Purchaser’s rights and obligations under the
Note Documents, such Purchaser shall cease to be a party hereto except that each
Purchaser agrees to remain bound by Section 11.9 (Sharing of Payments).
          (e) Grant of Security Interests. In addition to the other rights
provided in this Section 11.2, each Purchaser may grant a security interest in,
or otherwise assign as collateral, any of its rights under this Agreement,
whether now owned or hereafter acquired (including rights to payments of
principal or interest on the Notes), without notice to the Issuers and without
the execution of an assignment agreement to (A) any federal reserve bank
(pursuant to Regulation A of the Federal Reserve Board) or (B) any holder of, or
trustee for the benefit of the holders of, such Purchaser’s Securities;
provided, however, that no such holder or trustee, whether because of such grant
or assignment or any foreclosure thereon (unless such foreclosure is made
through an assignment in accordance with clause (b) above), shall be entitled to
any rights of such Purchaser hereunder and no such Purchaser shall be relieved
of any of its obligations hereunder.
          (f) Participants. In addition to the other rights provided in this
Section 11.2, each Purchaser may, (x) without notice to or consent from any
Issuer, sell participations to one or more Persons in or to all or a portion of
its rights and obligations under the Note Documents (including all its rights
and obligations with respect to the Notes); provided, however, that, whether as
a result of any term of any Note Document or of such grant or participation,
(i) no such participant shall have a commitment, or be deemed to have made an
offer to commit, to purchase Notes hereunder, and, except as provided in the
applicable option agreement, none shall be liable for any obligation of such
Purchaser hereunder, (ii) such Purchaser’s rights and obligations, and the
rights and obligations of the Note Parties towards such Purchaser, under any
Note Document shall remain unchanged and each other party hereto shall continue
to deal solely with such Purchaser, which shall remain the holder of the
Obligations in the Register, except that (A) each such participant shall be
entitled to the benefit of Section 2.17 (Taxes), but only to the extent such
participant delivers the tax forms such Purchaser is required to collect
pursuant to Section 2.17(f) and then only to the extent of any amount to which
such Purchaser would be

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entitled in the absence of any such participation; provided, however, that in no
case (including pursuant to clause (A) above) shall a participant have the right
to enforce any of the terms of any Note Document, and (iii) the consent of such
participant shall not be required (either directly, as a restraint on such
Purchaser’s ability to consent hereunder or otherwise) for any amendments,
waivers or consents with respect to any Note Document or to exercise or refrain
from exercising any powers or rights such Purchaser may have under or in respect
of the Note Documents (including the right to enforce or direct enforcement of
the Obligations), except for those described in clauses (ii) and (iii) of
Section 11.1(a) with respect to amounts, or dates fixed for payment of amounts,
to which such participant would otherwise be entitled and, in the case of
participants, except for those described in Section 11.1(a)(iv). Each Purchaser
that sells a participation shall, acting solely for this purpose as a
non-fiduciary agent of the Issuers, maintain a register on which it enters the
name and address of each participant and the principal amounts (and stated
interest) of each participant’s interest in the Notes or other obligations under
this Agreement (the “Participant Register”). The entries in the Participant
Register shall be conclusive absent manifest error, and such Purchaser shall
treat each person whose name is recorded in the Participant Register as the
owner of such participation for all purposes of this Agreement notwithstanding
any notice to the contrary.
          Section 11.3 Costs and Expenses. Any action taken by any Note Party
under or with respect to any Note Document, even if required under any Note
Document or at the request of any Purchaser, shall be at the expense of such
Note Party, and no Purchaser shall be required under any Note Document to
reimburse any Note Party or Group Member therefor except as expressly provided
therein. In addition, the Issuers agree to pay or reimburse upon demand (a) the
Purchasers for all reasonable out-of-pocket costs and expenses incurred by it or
any of its Related Persons in connection with the investigation, development,
preparation, negotiation, syndication, execution, interpretation or
administration of, any modification of any term of or termination of, any Note
Document, any other document prepared in connection therewith or the
consummation and administration of any transaction contemplated therein
(including reasonable fees, charges and disbursements of legal counsel to the
Purchasers or such Related Persons, and expenses related to Intralinks® or any
other E-System), (b) each of the Purchasers for all reasonable out-of-pocket
costs and expenses incurred in connection with (i) any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
“work-out” (including, without limitation, fees and disbursements of
consultants), (ii) the enforcement or preservation of any right or remedy under
any Note Document, any Obligation or any other related right or remedy or
(iii) the commencement, defense, conduct of, intervention in, or the taking of
any other action with respect to, any proceeding (including any bankruptcy or
insolvency proceeding) related to any Group Member, Note Document, Obligation or
Related Transaction (or the response to and preparation for any subpoena or
request for document production relating thereto), including fees and
disbursements of counsel, and (c) reasonable fees and disbursements of one law
firm on behalf of all Purchasers, incurred in connection with any matters
referred to in clause (b) above.
          Section 11.4 Indemnities. (a) The Issuers agree to indemnify, hold
harmless and defend the Purchasers and each of their respective Related Persons
(each such Person being an “Indemnitee”) from and against all Liabilities
(including brokerage commissions, fees and other compensation) that may be
imposed on, incurred by or asserted against any such Indemnitee in any matter
relating to or arising out of, in

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connection with or as a result of (i) any Note Document, any Related Document,
any Disclosure Document, any Obligation (or the repayment thereof), the use or
intended use of the proceeds of any Note, any Related Transaction, or any
securities filing of, or with respect to, any Group Member, (ii) any commitment
letter, proposal letter or term sheet in connection with any of the foregoing
and any Contractual Obligation entered into in connection with any E-Systems or
other Electronic Transmissions, (iii) any actual or prospective investigation,
litigation or other proceeding in connection with any of the foregoing, whether
or not brought by any such Indemnitee or any of its Related Persons, any holders
of Securities or creditors (and including reasonable and documented attorneys’
fees in any case), whether or not any such Indemnitee, Related Person, holder or
creditor is a party thereto, and whether or not based on any securities or
commercial law or regulation or any other Requirement of Law or theory thereof,
including common law, equity, contract, tort or otherwise, or (iv) any other
act, event or transaction related, contemplated in or attendant to any of the
foregoing (collectively, the “Indemnified Matters”); provided, however, that the
Issuers shall not have any liability under this Section 11.4 to any Indemnitee
with respect to any Indemnified Matters, to the extent such liability has
resulted from the gross negligence, bad faith or willful misconduct of such
Indemnitee, as determined by a court of competent jurisdiction in a final
non-appealable judgment or order. Any amounts payable under this Section shall
be without duplication of any amounts payable in respect of Taxes under
Section 2.17.
          (b) Without limiting the foregoing, “Indemnified Matters” includes all
Environmental Liabilities, including those arising from, or otherwise involving,
any property of any Related Person or any actual, alleged or prospective damage
to property or natural resources or harm or injury alleged to have resulted from
any Release of Hazardous Materials on, upon or into such property or natural
resource or any property on or contiguous to any real property of any Related
Person, whether or not, with respect to any such Environmental Liabilities, any
Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in
possession, the successor-in-interest to any Related Person or the owner, lessee
or operator of any property of any Related Person through any foreclosure
action, in each case except to the extent such Environmental Liabilities (i) are
incurred solely following foreclosure by any Purchaser or following any
Purchaser having become the successor-in-interest to any Note Party and (ii) are
attributable solely to acts of such Indemnitee.
          Section 11.5 Survival. Any indemnification or other protection
provided to any Indemnitee pursuant to any Note Document (including pursuant to
Section 2.17 (Taxes), Section 11.3 (Costs and Expenses), Section 11.4
(Indemnities) or this Section 11.5) shall (A) survive the payment in full of
other Obligations and (B) inure to the benefit of any Person that at any time
held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its
successors and permitted assigns.
          Section 11.6 Limitation of Liability for Certain Damages. In no event
shall any Indemnitee be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including any loss of profits,
business or anticipated savings). Holdings and each Issuer hereby waives,
releases and agrees (and shall cause each other Note Party to waive, release and
agree) not to sue upon any such claim for any special, indirect, consequential
or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

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          Section 11.7 Noteholder-Issuer Relationship. The relationship between
the Purchasers, on the one hand, and the Note Parties, on the other hand, is
solely that of noteholder and issuer. No Purchaser has any fiduciary
relationship or duty to any Note Party arising out of or in connection with, and
there is no agency, tenancy or joint venture relationship between the Purchasers
and the Note Parties by virtue of, any Note Document or any transaction
contemplated therein.
          Section 11.8 [Reserved.]
          Section 11.9 Sharing of Payments, Etc. If any Purchaser, directly or
through an Affiliate or branch office thereof, obtains any payment of any
Obligation of any Note Party (whether voluntary, involuntary or through the
exercise of any right of setoff) other than pursuant to 2.17 (Taxes) and such
payment exceeds the amount such Purchaser would have been entitled to receive if
all payments had gone to, and been distributed by, the Issuers in accordance
with the provisions of the Note Documents, such Purchaser shall purchase for
cash from other Purchasers such participations in their Obligations as necessary
for such Purchaser to share such excess payment with such Purchasers to ensure
such payment is applied as though it had been received by the Purchasers and
applied in accordance with this Agreement (or, if such application would then be
at the discretion of the Issuers, applied to repay the Obligations in accordance
herewith); provided, however, that (a) if such payment is rescinded or otherwise
recovered from such Purchaser in whole or in part, such purchase shall be
rescinded and the purchase price therefor shall be returned to such Purchaser
without interest and (b) such Purchaser shall, to the fullest extent permitted
by applicable Requirements of Law, be able to exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Purchaser were the direct creditor of the Issuers in the amount of such
participation. For the avoidance of doubt, this Section 11.9 shall not apply to
assignments and participations to the extent allowed under this Agreement.
          Section 11.10 [Reserved.]
          Section 11.11 Notices. (a) Addresses. All notices, demands, requests,
directions and other communications required or expressly authorized to be made
by this Agreement shall, whether or not specified to be in writing but unless
otherwise expressly specified to be given by any other means, be given in
writing and (i) addressed to (A) if to Holdings or any Issuer, to MedQuist, Inc.
as Issuer Representative, Attention: Mark Sullivan, General Counsel, 1000
Bishops Gate Blvd., Suite 300, Mt. Laurel, New Jersey 08054, Tel:
(856) 206-4210, Fax: (856) 206-4211, with copy to Simpson Thacher & Bartlett
LLP, 425 Lexington Avenue, New York, New York 10017, Attention: Marissa C.
Wesely Tel: (212) 455-7173, Fax: (212) 455-2502, and (B) if to the Purchasers,
then at the address specified opposite such Purchaser’s name on Schedule II or
on the signature page of any applicable Assignment, (ii) posted to Intralinks®
(to the extent such system is available and set up by or at the direction of the
Purchasers prior to posting) in an appropriate location by uploading such
notice, demand, request, direction or other communication to www.intralinks.com,
faxing it to 866-545-6600 with an appropriate bar-coded fax coversheet or using
such other means of posting to Intralinks® as may be available and reasonably
acceptable to the Required Purchasers prior to such posting, (iii) posted to any
other E-System set up by or at the direction of the Purchasers in an appropriate
location or (iv) addressed to such other address as shall be notified in writing
in the case of the Issuers, Holdings and the Purchasers, to the other parties
hereto.

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Transmission by electronic mail (including E-Fax, even if transmitted to the fax
numbers set forth in clause (i) above) shall not be sufficient or effective to
transmit any such notice under this clause (a) unless such transmission is an
available means to post to any E-System. Notwithstanding the foregoing,
materials required to be delivered pursuant to Sections 6.1(b), 6.1(c) and 6.3
shall be deemed delivered to the Purchasers on the date on which Holdings or the
Issuers cause such materials to be posted on the Internet at www.sec.gov or at
such other website identified by the Issuer Representative in a written notice
to the Purchasers and that is accessible by the Purchasers without charge.
          (b) Effectiveness. All communications described in clause (a) above
and all other notices, demands, requests and other communications made in
connection with this Agreement shall be effective and be deemed to have been
received (i) if delivered by hand, upon personal delivery, (ii) if delivered by
overnight courier service, one (1) Business Day after delivery to such courier
service, (iii) if delivered by mail, when deposited in the mails, (iv) if
delivered by facsimile (other than to post to an E-System pursuant to clause
(a)(ii) or (a)(iii) above), upon sender’s receipt of confirmation of proper
transmission, and (v) if delivered by posting to any E-System, on the later of
the date of such posting in an appropriate location and the date access to such
posting is given to the recipient thereof in accordance with the standard
procedures applicable to such E-System; provided, however, that no
communications to any Purchaser pursuant to Article 2 shall be effective until
received by such Purchaser.
          Section 11.12 Electronic Transmissions. (a) Authorization. Subject to
the provisions of Section 11.11(a), each of the Purchasers, the Issuers, and
each of their Related Persons is authorized (but not required) to transmit, post
or otherwise make or communicate, in its sole discretion, Electronic
Transmissions in connection with any Note Document and the transactions
contemplated therein. Each of Holdings, each Issuer and each Purchaser hereby
acknowledges and agrees, and Holdings and each Issuer shall cause each other
Group Member to acknowledge and agree, that the use of Electronic Transmissions
is not necessarily secure and that there are risks associated with such use,
including risks of interception, disclosure and abuse and each indicates it
assumes and accepts such risks by hereby authorizing the transmission of
Electronic Transmissions.
          (b) Signatures. Subject to the provisions of Section 11.11(a), (i)(A)
no posting to any E-System shall be denied legal effect merely because it is
made electronically, (B) each E-Signature on any such posting shall be deemed
sufficient to satisfy any requirement for a “signature” and (C) each such
posting shall be deemed sufficient to satisfy any requirement for a “writing”,
in each case including pursuant to any Note Document, any applicable provision
of any UCC, the federal Uniform Electronic Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
Requirement of Law governing such subject matter, (ii) each such posting that is
not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such posting, an E-Signature, upon which each
Purchaser and Note Party may rely and assume the authenticity thereof,
(iii) each such posting containing a signature, a reproduction of a signature or
an E-Signature shall, for all intents and purposes, have the same effect and
weight as a signed paper original and (iv) each party hereto or beneficiary
hereto agrees not to contest the validity or enforceability of any posting on
any E-System or E-Signature on any such posting under the provisions of any
applicable Requirement of Law requiring certain documents to be in writing or
signed; provided, however, that nothing herein shall limit such

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party’s or beneficiary’s right to contest whether any posting to any E-System or
E-Signature has been altered after transmission.
          (c) Separate Agreements. All uses of an E-System shall be governed by
and subject to, in addition to Section 11.11 and this Section 11.12, separate
terms and conditions posted or referenced in such E-System and related
Contractual Obligations executed by Purchasers and Group Members in connection
with the use of such E-System.
          (d) Limitation of Liability. All E-Systems and Electronic
Transmissions shall be provided “as is” and “as available”. None of the
Purchasers or any of their Related Persons warrants the accuracy, adequacy or
completeness of any E-Systems or Electronic Transmission, and each disclaims all
liability for errors or omissions therein. No warranty of any kind is made by
the Purchasers or any of their Related Persons in connection with any E-Systems
or Electronic Communication, including any warranty of merchantability, fitness
for a particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects. Holdings, each Issuer and each Purchaser agrees
(and Holdings and each Issuer shall cause each other Note Party to agree) that
the Purchasers have no responsibility for maintaining or providing any
equipment, software, services or any testing required in connection with any
Electronic Transmission or otherwise required for any E-System.
          Section 11.13 Governing Law. This Agreement, each other Note Document
that does not expressly set forth its applicable law, and the rights and
obligations of the parties hereto and thereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
          Section 11.14 Jurisdiction. (a) Submission to Jurisdiction. Any legal
action or proceeding with respect to any Note Document shall be brought
exclusively in the courts of the State of New York located in the City of New
York, Borough of Manhattan, or of the United States of America for the Southern
District of New York and, by execution and delivery of this Agreement, each
party hereto hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts; provided that
nothing in this Agreement shall limit the right of the Purchasers to commence
any proceeding in the federal or state courts of any other jurisdiction to the
extent the Purchasers determine that such action is necessary or appropriate to
exercise its rights or remedies under the Note Documents. The parties hereto
(and, to the extent set forth in any other Note Document, each other Note Party)
hereby irrevocably waive any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, that any of them may now
or hereafter have to the bringing of any such action or proceeding in such
jurisdictions.
          (b) Service of Process. Holdings and each Issuer (and, to the extent
set forth in any other Note Document, each other Note Party) hereby irrevocably
waives personal service of any and all legal process, summons, notices and other
documents and other service of process of any kind and consents to such service
in any suit, action or proceeding brought in the United States of America with
respect to or otherwise arising out of or in connection with any Note Document
by any means permitted by applicable Requirements of Law, including by the
mailing thereof (by registered or certified mail, postage prepaid) to the
address of the Issuer Representative specified in Section 11.11 (and shall be
effective when such mailing shall be effective, as provided therein). Holdings
and each Issuer (and, to the extent set forth in any other Note Document, each
other Note Party) agrees that a final judgment in any such action or

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proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
          Section 11.15 Waiver of Jury Trial. Each party hereto hereby
irrevocably waives trial by jury in any suit, action or proceeding with respect
to, or directly or indirectly arising out of, under or in connection with, any
Note Document or the transactions contemplated therein or related thereto
(whether founded in contract, tort or any other theory). Each party hereto
(A) certifies that no other party and no Related Person of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (B) acknowledges
that it and the other parties hereto have been induced to enter into the Note
Documents, as applicable, by the mutual waivers and certifications in this
Section 11.15.
          Section 11.16 Severability. Any provision of any Note Document being
held illegal, invalid or unenforceable in any jurisdiction shall not affect any
part of such provision not held illegal, invalid or unenforceable, any other
provision of any Note Document or any part of such provision in any other
jurisdiction.
          Section 11.17 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart. Delivery of an executed signature page of this
Agreement by facsimile transmission or Electronic Transmission shall be as
effective as delivery of a manually executed counterpart hereof.
          Section 11.18 Entire Agreement. The Note Documents embody the entire
agreement of the parties and supersede all prior agreements and understandings
relating to the subject matter thereof and any prior letter of interest,
commitment letter, fee letter, confidentiality and similar agreements involving
any Note Party and any of the Purchasers or any of their respective Affiliates
relating to a financing of substantially similar form, purpose or effect. In the
event of any conflict between the terms of this Agreement and any other Note
Document, the terms of this Agreement shall govern (unless such terms of such
other Note Documents are necessary to comply with applicable Requirements of
Law, in which case such terms shall govern to the extent necessary to comply
therewith).
          Section 11.19 Use of Name. Holdings and each Issuer agrees, and shall
cause each other Note Party to agree, that it shall not, and none of its
Affiliates shall, issue any press release or other public disclosure (other than
any document required to be filed with any Governmental Authority under the
securities laws) using the name, logo or otherwise referring to any Purchaser,
without at least two (2) Business Days’ prior notice to such Purchaser and
without the prior consent of such Purchaser except to the extent required to do
so under applicable Requirements of Law.
          Section 11.20 Non-Public Information; Confidentiality. (a) Each
Purchaser acknowledges and agrees that it may receive material non-public
information hereunder concerning the Note Parties and their Affiliates and
Securities and agrees to use such information in compliance with all relevant
policies, procedures and

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Contractual Obligations and applicable Requirements of Laws (including United
States federal and state security laws and regulations).
          (b) Each Purchaser agrees to use all reasonable efforts to maintain,
in accordance with its customary practices, the confidentiality of information
obtained by it pursuant to any Note Document and designated in writing by any
Note Party as confidential, except that such information may be disclosed
(i) with the Issuer Representative’s consent, (ii) to Related Persons of such
Purchaser that are advised of the confidential nature of such information and
are instructed to keep such information confidential, (iii) to the extent such
information presently is or hereafter becomes available to such Purchaser, as
the case may be, on a non-confidential basis from a source other than any Note
Party, (iv) to the extent disclosure is required by applicable Requirements of
Law or other legal process or requested or demanded by any Governmental
Authority, (v) to the extent necessary or customary for inclusion in league
table measurements or in any tombstone or other advertising materials (and the
Note Parties consent to the publication of such tombstone or other advertising
materials by the Purchasers or any of their Related Persons), (vi) to the
National Association of Insurance Commissioners or any similar organization, any
examiner or any nationally recognized rating agency or otherwise to the extent
consisting of general portfolio information that does not identify issuers,
(vii) to current or prospective assignees, grantees of any option described in
Section 11.2(f) or participants, direct or contractual counterparties to any
Hedging Agreement permitted hereunder and to their respective Related Persons,
in each case to the extent such assignees, participants, counterparties or
Related Persons agree to be bound by provisions substantially similar to the
provisions of this Section 11.20 and (viii) in connection with the exercise of
any remedy or the enforcement of any right under any Note Document. In the event
of any conflict between the terms of this Section 11.20 and those of any other
Contractual Obligation entered into with any Note Party (whether or not a Note
Document), the terms of this Section 11.20 shall govern.
          Section 11.21 Patriot Act Notice. Each Purchaser subject to the USA
Patriot Act of 2001 (31 U.S.C. 5318 et seq.) (the “Patriot Act”) hereby notifies
the Issuers that, pursuant to Section 326 thereof, such Purchaser is required to
obtain, verify and record information that identifies each Issuer, including the
name and address of such Issuer and other information allowing such Purchaser to
identify such Issuer in accordance with such act.
ARTICLE 12
CROSS-GUARANTY
          Section 12.1 Cross-Guaranty. Each Issuer hereby agrees that such
Issuer is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to the Purchasers and their respective successors and
assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to the Purchasers by each other Issuer (“Guaranteed Obligations”). Each
Issuer agrees that its guaranty obligation hereunder is a continuing guaranty of
payment and performance and not of collection, that its obligations under this
Article 12 shall not be discharged until payment and performance, in full, of
the Obligations has occurred, and that its obligations under this Article 12
shall be absolute and unconditional, irrespective of, and unaffected by:

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          (a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Note Document or
any other agreement, document or instrument to which any Issuer is or may become
a party;
          (b) the absence of any action, against any Person other than such
Issuer, to enforce this Agreement (including this Article 12) or any other Note
Document or the waiver or consent by the Purchasers with respect to any of the
provisions thereof;
          (c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by the Purchasers in respect thereof (including the release of any
such security);
          (d) the insolvency of any Note Party; or
          (e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
Each Issuer shall be regarded, and shall be in the same position, as principal
debtor with respect to the Guaranteed Obligations.
          Section 12.2 Waivers by Issuers. Each Issuer expressly waives all
rights it may have now or in the future under any statute, or at common law, or
at law or in equity, or otherwise, to compel the Purchasers to marshal assets or
to proceed in respect of the Obligations guaranteed hereunder against any other
Note Party, any other party or against any security for the payment and
performance of the Guaranteed Obligations before proceeding against, or as a
condition to proceeding against, such Issuer. It is agreed among each Issuer,
the Purchasers that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Note Documents and that, but for
the provisions of this Article 12 and such waivers, the Purchasers would decline
to enter into this Agreement.
          Section 12.3 Benefit of Guaranty. Each Issuer agrees that the
provisions of this Article 12 are for the benefit of the Purchasers and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Issuer and the Purchasers, the
obligations of such other Issuer under the Note Documents.
          Section 12.4 Subordination of Subrogation, Etc. Notwithstanding
anything to the contrary in this Agreement or in any other Note Document, and
except as set forth in Section 12.7, each Issuer hereby expressly and
irrevocably subordinates to payment of the Obligations any and all rights at law
or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off and any and all defenses available to a surety,
guarantor or accommodation co-obligor until the Obligations are paid in full in
cash and the applicable preference period has passed. Each Issuer acknowledges
and agrees that this subordination is intended to benefit the Purchasers and
shall not limit or otherwise affect such Issuer’s liability hereunder or the
enforceability of this Article 12, and that the Purchasers and their respective
successors and assigns are intended third party beneficiaries of the waivers and
agreements set forth in this Section 12.4.

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          Section 12.5 Election of Remedies. If, in the exercise of any of its
rights and remedies, any Purchaser shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Issuer or any
other Person, whether because of any applicable laws pertaining to “election of
remedies” or the like, each Issuer hereby consents to such action by the
Purchaser and waives any claim based upon such action, even if such action by
the Purchaser shall result in a full or partial loss of any rights of
subrogation that such Issuer might otherwise have had but for such action by the
Purchaser. Any election of remedies that results in the denial or impairment of
the right of any Purchaser to seek a deficiency judgment against any Issuer
shall not impair any other Issuer’s obligation to pay the full amount of the
Obligations.
          Section 12.6 Limitation. Notwithstanding any provision herein
contained to the contrary, each Issuer’s liability under this Article 12 (which
liability is in any event in addition to amounts for which such Issuer is
primarily liable under Article 2) shall be limited to an amount not to exceed as
of any date of determination the greater of:
          (a) the net amount of proceeds of the issuance of Notes received by
any other Issuer under this Agreement and then re-loaned or otherwise
transferred to, or for the benefit of, such Issuer; and
          (b) the amount that could be claimed by the Purchasers from such
Issuer under this Article 12 without rendering such claim voidable or avoidable
under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable
state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
similar statute or common law after taking into account, among other things,
such Issuer’s right of contribution and indemnification from each other Issuer
under Section 12.7.
          Section 12.7 Contribution with Respect to Guaranty Obligations.
          (a) To the extent that any Issuer shall make a payment under this
Article 12 of all or any of the Obligations (other than the proceeds of Notes
received directly by such Issuer for which it is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments then previously
or concurrently made by any other Issuer, exceeds the amount that such Issuer
would otherwise have paid if each Issuer had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Issuer’s
“Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Issuers as determined immediately prior to the making of such Guarantor Payment,
then, following payment in full in cash of the Obligations, termination of the
Commitments and the passage of the applicable preference period, such Issuer
shall be entitled to receive contribution and indemnification payments from, and
be reimbursed by, each other Issuer for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
          (b) As of any date of determination, the “Allocable Amount” of any
Issuer shall be equal to the maximum amount of the claim that could then be
recovered from such Issuer under this Article 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.

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          (c) This Section 12.7 is intended only to define the relative rights
of the Issuers and nothing set forth in this Section 12.7 is intended to or
shall impair the obligations of the Issuers, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Issuer to pay the Notes to such
Issuer and accrued interest, Fees and expenses with respect thereto for which
such Issuer shall be primarily liable.
          (d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Issuers to which such
contribution and indemnification is owing.
          (e) The rights of the indemnifying Issuers against other Note Parties
under this Section 12.7 shall be exercisable upon the full and payment of the
Obligations, the termination of the Commitments and the passage of the
applicable preference period.
          Section 12.8 Liability Cumulative. The liability of the Issuers under
this Article 12 is in addition to and shall be cumulative with all liabilities
of each Issuer to the Purchasers under this Agreement and the other Note
Documents to which such Issuer is a party or in respect of any Obligations or
obligation of the other Issuers, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
          Section 12.9 Subordination. This Agreement and the rights and
obligations evidenced hereby are subordinate to the Senior Loan Obligations in
the manner and to the extent set forth in the Subordination Agreement.
[SIGNATURE PAGES FOLLOW]

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

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

 

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            PURCHASERS:

BLACKROCK KELSO CAPITAL CORPORATION,
      By: BLACKROCK KELSO CAPITAL ADVISORS LLC,
its Investment Manager, as Purchaser       By:   /s/ Michael B. Lazar      
Name:   Michael B. Lazar       Title:   Chief Operating Officer  

 

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            PENNNANTPARK INVESTMENT CORPORATION,
as Purchaser
      By:   PennantPark Investment Advisers, LLC             By:   /s/ Arthur
Penn         Name:   Arthur Penn       Title:   Chief Executive Officer  

 

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            CITIBANK, N.A., as Purchaser
      By:   /s/ Michael Girondo       Name:   Michael Girondo      
Title     Vice President  

 

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            THL CREDIT, INC., as Purchaser
      By:   /s/ Hunter Stropp       Name:   Hunter Stropp       Title:  
Co-President     

Signature Page to Senior Subordinated Note Purchase Agreement

 

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SCHEDULE I
Commitments

          Purchaser   Commitment
BlackRock Kelso Capital Corporation
  $ 43,000,000  
PennantPark Investment Corporation
  $ 19,000,000  
Citibank, N.A.
  $ 17,000,000  
THL Credit, Inc.
  $ 6,000,000