UCC) OF MEDQUIST CANADA COMPANY AND
SPEECH MACHINES LTD. BEING PLEDGED PURSUANT TO THE GUARANTY AND SECURITY
AGREEMENT, WHICH SUCH CERTIFICATES SHALL REPRESENT 65% OF THE VOTING STOCK AND
100% OF THE NON-VOTING STOCK, AS APPLICABLE, OF EACH SUCH ENTITY, AND
CORRESPONDING UNDATED STOCK POWERS DULY EXECUTED IN BLANK.
ARTICLE 8
NEGATIVE COVENANTS
Each of Holdings and the Borrower (and, to the extent set forth in any other
Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers
and the Administrative Agent to each of the following, as long as any Obligation
(other than any Contingent Loan Document Obligations) or any Revolving Credit
Commitment remains outstanding:
SECTION 8.1
INDEBTEDNESS.
NO GROUP MEMBER SHALL INCUR OR OTHERWISE
REMAIN LIABLE WITH RESPECT TO, ANY INDEBTEDNESS EXCEPT FOR THE FOLLOWING:
(A)
THE OBLIGATIONS;
(B)
INDEBTEDNESS EXISTING ON THE 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
86
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 $3,000,000 (PLUS $500,000 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 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)
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 OTHER GROUP MEMBER (OTHER THAN HOLDINGS
AND OTHER THAN
INDEBTEDNESS PERMITTED HEREUNDER IN RELIANCE UPON CLAUSE (B) OR (C) ABOVE, FOR
WHICH GUARANTY OBLIGATIONS MAY BE PERMITTED TO THE EXTENT SET FORTH IN SUCH
CLAUSES), TO THE EXTENT THAT SUCH GUARANTY CONSTITUTES A PERMITTED INVESTMENT
UNDER SECTION 8.3(E);
(H)
INDEBTEDNESS OF ANY GROUP MEMBER (OTHER THAN HOLDINGS) IN
RESPECT OF PERFORMANCE BONDS, BID BONDS, APPEAL BONDS, SURETY BONDS, PERFORMANCE
AND COMPLETION GUARANTEES AND SIMILAR OBLIGATIONS, IN EACH CASE, THAT ARE
INCURRED IN THE ORDINARY COURSE OF BUSINESS AND NOT IN CONNECTION WITH THE
BORROWING OF MONEY OR HEDGING AGREEMENT;
(I)
INDEBTEDNESS