Document:

exv10w25

Exhibit 10.25

EXECUTION COPY

VALUE APPRECIATION INSTRUMENT AGREEMENT

by and between

BOND STREET HOLDINGS, INC.

and

FEDERAL DEPOSIT INSURANCE CORPORATION,

RECEIVER OF FIRST PEOPLES BANK,

PORT SAINT LUCIE, FLORIDA

Dated as of July 15, 2011

 

 

VALUE APPRECIATION INSTRUMENT AGREEMENT

          This VALUE APPRECIATION AGREEMENT (this “Agreement”), dated as of July 15, 2011, is by
and between Bond Street Holdings, Inc., a Delaware corporation (the “Company”), and the
Federal Deposit Insurance Corporation, in its capacity as receiver (the “FDIC”).

RECITALS

          WHEREAS, as of July 15, 2011, FDIC and Premier American Bank, National Association, a wholly
owned subsidiary of the Company (the “Buyer”) entered into that certain Purchase and
Assumption Agreement, dated as of the date hereof (as amended from time to time in accordance with
its terms, the “P&A Agreement”), pursuant to which Buyer purchased and assumed certain
assets, deposits and certain other liabilities of First Peoples Bank, Port Saint Lucie, Florida
(the “Failed Bank”) from FDIC; and

          WHEREAS, pursuant to the bid of the Company and the Buyer to acquire the Failed Bank, FDIC is
entitled to receive a value appreciation payment in respect of fifty thousand (50,000) Units as
provided in, and subject to the terms and conditions of, this Agreement.

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

     1. Definitions. As used in this Agreement, the following terms shall have
the meanings indicated:

          “Agreement” shall have the meaning set forth in the preamble.

          “Business Day” means any day commencing at 9 A.M., New York City time and ending at 5
P.M., New York City Time, that is not a Saturday or Sunday or a legal holiday on which banks are
authorized or required by law to be closed.

          “Buyer” shall have the meaning set forth in the recitals.

          “Company” shall have the meaning set forth in the recitals.

          “Determination Price” shall mean, in respect of each Unit:

          (i) if a Public Float Event occurs, the Company’s two (2) day
volume weighted average price (“VWAP”) per Unit as of the date of the
Exercise Notice;

          (ii) if a Sale Event occurs, the value of the consideration
received per Unit upon the closing of such Sale Event; or

          (iii) if the Alternative Consideration Fee is assessed, the

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value per Unit is equal to the product of (x) the Company’s Tangible Book
Value per common share as of the most recent quarter prior to the expiration
of the term and (y) the prevailing average price to tangible book multiple of
the components underlying the Nasdaq Bank Index at such date.

          “Exercise Notice” shall have the meaning set forth in Section 3(d).

          “Exercise Period” shall have the meaning set forth in Section 3(c).

          “Exercise Price” means $19.92 per Unit subject to adjustment pursuant to
Section 2(b).

          “Failed Bank” shall have the meaning set forth in the preamble.

          “FDIC” shall have the meaning set forth in the preamble.

          “Initial Exercise Date” shall have the meaning set forth in Section 3(c).

          “Initial Public Offering” shall mean the first underwritten public offering of common
stock of the Company after which it will both (i) trade on a national securities exchange (which
includes, but is not limited to, NYSE, NASDAQ and NYSE Amex Equities) and (ii) have a post-offering
public float in excess of Fifty Million United States Dollars ($50,000,000).

          “Public Float Event” shall mean the increase of the Company’s public float to more
than Fifty Million United States Dollars ($50,000,000) for a consecutive 30-trading-day period by
means of either (i) an Initial Public Offering or (ii) appreciation of public market price of
shares of the Company.

          “Sale Event” shall mean a business combination in which the Company is designated as
the selling entity or a disposition of all or substantially all of the Company’s assets.

          “Settlement Price” means the Determination Price minus the Exercise Price.

          “Tangible Book Value” shall mean the quotient of the Company’s tangible common
equity divided by the Company’s total common shares outstanding.

          “Term” shall mean the period commencing on the Initial Exercise Date and ending
on the earlier of (i) the first anniversary of the Trigger Event or (ii) July 15, 2013.

          “Transfer” shall mean any transfer, sale, exchange, assignment, pledge, or
hypothecation of, creation of a lien or other encumbrance or security interest in or upon, or other
disposition of, the VAI Right; provided, that such a Transfer shall be made pursuant to
Section 4, and the term “Transferred” shall have the meaning correlative to the foregoing.

          “Trigger Event” shall have the meaning set forth in Section 3(a).

          “Trigger Notice” shall have the meaning set forth in Section 3(b).

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          “Unit” shall mean an accounting device which mirrors one share of the
Company’s common stock.

          “VAI Payment” shall have the meaning set forth in Section 2(a).

          “VAI Right” shall have the meaning set forth in Section 2(a).

          “VWAP” means the Volume Weighted Average Price displayed under the heading “Bloomberg
VWAP” on the Bloomberg Page for the Company (or its equivalent successor page if such page is not
available) for the two (2) trading days immediately prior to the day of FDIC’s delivery of the
Exercise Notice to the Company.

     2. VAI Right.

          (a) Upon the occurrence of a Trigger Event (as defined below), FDIC will have the right (the
“VAI Right”), which may be exercised, in whole or in part, at any time during the Term in
accordance with the provisions of Section 3, to receive a payment in cash or in stock (the “VAI
Payment”) in respect of fifty thousand (50,000) Units, in the aggregate, as follows: (1) if
payment in cash is elected, the VAI Payment shall be equal to the product of (i)the Settlement
Price per Unit and (ii) the number of Units in respect of which the VAI Right is being exercised as
set forth in the applicable Exercise Notice, or (2) if payment in stock is elected, the VAI Payment
shall be the number of shares of the Company’s common stock equal to (X) the product of (i) the
number of Units in respect of which the VAI Right is being exercised as set forth in the applicable
Exercise Notice and (ii) the Settlement Price per Unit, divided by (Y) the Determination Price as
defined in clause (i) or clause (ii) of the definition of “Determination Price.”

          (b) Adjustments for Stock Splits, etc. The number of Units to which the VAI Right
relates shall be appropriately adjusted, as determined by the managing board of the Company, to
reflect fully the effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into Units), reclassification, reorganization,
recapitalization or similar transaction occurring after the date hereof and prior to the expiration
of the Term.

     3. Exercise of VAI Right.

          (a) Conditions to Exercise. The VAI Right shall become exercisable, in whole or in
part, only upon the earlier of (i) the occurrence of a Public Float Event, or (ii) the closing of a
Sale Event (any such event in clause (i) or (ii), a “Trigger Event”).

          (b) Trigger Notice. Within five (5) Business Days of the occurrence of a Trigger
Event, the Company shall send FDIC a written notice stating that a Trigger Event has occurred (a
“Trigger Notice”). Such Trigger Notice shall be delivered pursuant to Section 7 below.

          (c) Exercise Period. The VAI Right may be exercised in whole or in part at any time
commencing on the delivery date of the Trigger Notice (the “Initial Exercise Date”) and

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continuing until the expiration of the Term at which time the VAI Right or any unexercised
portion thereof shall be extinguished.

          (d) Manner of Exercise. In order to exercise the VAI Right, FDIC shall deliver to the
Company a written notice in the form of Exhibit A hereto (the “Exercise Notice”), at any
time on or after the date on which the VAI Right becomes exercisable as provided in Section 3(c).
Such Exercise Notice shall be delivered pursuant to Section 7 below.

          (e) Settlement of Right; Payment by Company. After receipt of the Exercise Notice in
the manner set forth above, on the first Business Day following the Company’s receipt of the
Exercise Notice, the Company shall deliver to the FDIC or any other holder of the VAI Right as a
result of a Transfer, the VAI Payment in the form that such holder may elect pursuant to Section
2(a).

          (f) Alternative Consideration Fee. In the event that a Trigger Event does not occur
prior to the expiration of the Term or a Trigger Event occurs but the FDIC does not exercise fully
the VAI Right, then upon the expiration of the Term the Company shall pay to the FDIC a cash fee
equal to the product of (x) the number of unexercised Units and (y) the Settlement Price per Unit.
For purposes of this Section 3(f), the Settlement Price shall be calculated based on a
Determination Price as defined in clause (iii) of the definition of “Determination Price.”

     4. Transfers Prior to the Expiration of the Term. FDIC may Transfer its right, title
and interest in and to all or part of the VAI Right without the consent of the Company (provided
that FDIC shall notify the Company pursuant to Section 7 below prior to any such Transfer) at any
time prior to the expiration of the Term, so long as such Transfer does not violate any applicable
law, rule or regulation.

     5. Binding Effect. This Agreement shall be binding upon, inure to the benefit of, and
be enforceable by the parties hereto and their respective heirs, personal representatives,
legatees, successors and permitted assigns.

     6. No Impairment. The Company will not, by amendment of its operating agreement or
through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Agreement, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of FDIC against impairment.

     7. Notices. Any notice, demand or request which may be permitted, required or desired
to be given in connection with herewith shall be given in writing and directed to the parties
hereto as follows:

	 	 	 	 	 

	 

	 	if to FDIC, to:
	 	Manager, Special Programs
	 

	 	 	 	Division of Resolutions and Receiverships
	 

	 	 	 	Federal Deposit Insurance Corporation
	 

	 	 	 	550 17th Street, NW (Room F-7028)
	 

	 	 	 	Washington, D.C. 20429-0002

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	 	 	 	Attention: Philip Mangano
	 

	 	 	 	E-mail Address: PMangano@fdic.gov
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Senior Counsel
	 

	 	 	 	FDIC Legal Division
	 

	 	 	 	Federal Deposit Insurance Corporation
	 

	 	 	 	Special Issues Unit
	 

	 	 	 	3501 Fairfax Drive (Room E-7056)
	 

	 	 	 	Arlington, Virginia 22226
	 

	 	 	 	Attention: David Gearin
	 

	 	 	 	E-mail Address: DGearin@fdic.gov
	 
	 	 	 	 
	 

	 	if to the Company, to:
	 	 President and COO
	 

	 	 	 	Bond Street Holdings, Inc.
	 

	 	 	 	5301 Blue Lagoon Drive, Suite 200
	 

	 	 	 	Miami, Florida 33126
	 

	 	 	 	Attention: Kent S. Ellert
	 

	 	 	 	Fax: (305) 260-7178
	 

	 	 	 	Phone: (239) 530-8440
	 

	 	 	 	E-Mail Address: kellert@bondstreetholdings.com

Notices shall be deemed properly delivered and received when delivered to both the primary notice
party and copied parties (i) if personally delivered, upon receipt or refusal to accept delivery,
(ii) if sent by a commercial overnight courier for delivery on the next Business Day, on the first
Business Day after deposit with such courier service (or the third Business Day if sent to an
address not in the United States), or (iii) if sent by registered or certified mail, five (5) days
after deposit thereof in the U.S. mail. Any party may change its address for delivery of notices by
properly notifying the others pursuant to this Section 7. For the avoidance of doubt, e-mail
notices and notices sent via facsimile shall not be deemed proper delivery for purposes of this
Agreement.

     8. Amendment. This Agreement may be modified or amended only by an instrument in
writing, duly executed by the Company on the one hand, and the FDIC, on the other hand.

     9. Governing Law. This Agreement shall be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and, insofar as
there may be no applicable federal law, shall be governed in accordance with the laws of the State
of New York. Each of the Company and FDIC agrees (a) to submit to the exclusive jurisdiction and
venue of the federal courts located in the State of New York for any civil action, suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby,
and (b) that notice may be served upon the Company and FDIC at the addresses in Section 7 above. To
the extent permitted by applicable law, each of the Company and FDIC hereby unconditionally waives
trial by jury in any civil legal action or proceeding relating to this Agreement or the
transactions contemplated hereby.

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     10. Severability. If any provision of this Agreement is found by a court of
competent jurisdiction to be invalid or unenforceable, such provision shall not affect the other
provisions, but such invalid or unenforceable provision shall be deemed modified to the extent
necessary to render it valid or enforceable, preserving to the fullest extent permissible the
intent of the parties set forth herein.

     11. Headings. The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof.

     12. Counterparts; Facsimile. For the convenience of the parties, any number of
counterparts hereof may be executed, each such executed counterpart shall be deemed an original,
and all such counterparts together shall constitute one and the same instrument. Facsimile
transmission or other electronic transmission of any signed original counterpart and/or
retransmission of any signed facsimile transmission or other electronic transmission shall be
deemed the same as the delivery of an original.

     13. Entire Agreement. This Agreement and the P&A Agreement (including the exhibits and
schedules of each of the foregoing) contain the entire understanding of the parties hereto with
respect to the subject matter hereof.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.

	 	 	 	 	 
	 	BOND STREET HOLDINGS, INC.

 	 
	 	By:  	/s/ Daniel M. Healy
 	 
	 	 	Name:  	Daniel M. Healy 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	FEDERAL DEPOSIT INSURANCE CORPORATION,
RECEIVER OF FIRST PEOPLES BANK,

PORT SAINT LUCIE, FLORIDA

 	 
	 	By:  	/s/ Mark Barry Gilman
 	 
	 	 	Name:  	Mark Barry Gilman	 
	 	 	Title:  	Receiver In Charge	 
	 

[Signature Page to Value Appreciation Instrument Agreement]

 

 

Exhibit A

FORM OF EXERCISE NOTICE

To: Bond Street Holdings, Inc. (the “Company”):

     The undersigned hereby gives notice pursuant to Section 3(d) of that certain Value
Appreciation Instrument Agreement by and between the Company and the undersigned of its election to
exercise its VAI Right, in whole or in part, such exercise to be consummated on the tenth business
day following delivery of this notice, all in accordance with the terms and provisions of the Value
Appreciation Instrument Agreement.

     Number of Units to which this exercise applies:                                         

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of
September 14, 2011, by and among CBay Inc., a Delaware corporation, MedQuist Inc., a New Jersey
corporation, MedQuist Transcriptions, Ltd., a New Jersey corporation (collectively, the
“Borrowers”), MedQuist Holdings Inc., a Delaware corporation (“Holdings”), the
other Loan Parties signatory hereto, the Lenders signatory hereto, and General Electric Capital
Corporation, a Delaware corporation, as Administrative Agent for the Lenders (the
“Administrative Agent”).

RECITALS

     A. The Borrowers, Holdings, the Lenders signatory thereto from time to time and the
Administrative Agent are parties to that certain Credit Agreement, dated as of October 1, 2010 as
amended by that certain First Amendment to Credit Agreement, Waiver and Consent, dated as of July
11, 2011 (as so amended, and as further amended, supplemented, revised, restated, replaced or
otherwise modified, the “Credit Agreement”). Capitalized terms used herein and
not otherwise defined shall having the meanings set forth in the Credit Agreement.

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

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

A. AMENDMENTS

     1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is amended by
replacing the definitions of “Commitment”, “Facilities”, “Lender”, “Loan Documents”, “Permitted
Acquisition”, “Revolving Credit Commitment”, “Term Loan” and “Term Loan Commitment” in their
entirety with the following:

     “Commitment” means, with respect to any Lender, such Lender’s Revolving
Credit Commitment, Term Loan Commitment and Incremental Term Loan Commitment.

     “Facilities” means (a) the Term Loan Facility, (b) the Revolving Credit
Facility and (c) any credit facility represented by Other Term Loans.

     “Lender” means, collectively, the Swingline Lender and any other
financial institution or other Person that (a) is listed on the signature pages
hereof as a “Lender”, (b) from time to time becomes a party hereto by execution of
an Assignment or (c) from time to time becomes a party hereto by execution of an
Incremental Term Loan Assumption Agreement or an Additional Revolving Credit
Commitment Assumption Agreement, in each case together with its successors.

 

 

     “Loan Documents” means, collectively, this Agreement, any Notes, the
Guaranty and Security Agreement, any Mortgages, the Control Agreements, the Fee
Letter, the Subordination Agreement, the L/C Reimbursement Agreements, all landlord
waivers, each Incremental Term Loan Assumption Agreement and, when executed, each
document executed by a Loan Party and delivered to the Administrative Agent, any
Lender or any L/C Issuer in connection with or pursuant to any of the foregoing or
the Obligations, together with any modification of any term, or any waiver with
respect to, any of the foregoing.

     “Permitted Acquisition” means any Proposed Acquisition satisfying each
of the following conditions: (a) the aggregate amounts payable in connection with,
and other consideration for (in each case, including all transaction costs and all
Indebtedness, liabilities and Guaranty Obligations incurred or assumed in connection
therewith or otherwise reflected in a Consolidated balance sheet of Holdings and the
Proposed Acquisition Target), such Proposed Acquisition and all other Permitted
Acquisitions consummated on or prior to the date of the consummation of such
Proposed Acquisition shall not exceed (i) $50,000,000 in the aggregate in any Fiscal
Year or $150,000,000 in the aggregate during the term of this Agreement plus (ii)
Additional Available Cash as of the date of consummation of such Proposed
Acquisition plus (iii) an unlimited number of shares of common stock of Holdings
issued in connection with such Proposed Acquisition, (b) the Administrative Agent
shall have received reasonable advance notice of such Proposed Acquisition including
a reasonably detailed description thereof at least 15 days prior to the consummation
of such Proposed Acquisition (or such later date as may be agreed by the
Administrative Agent) and on or prior to the date of such Proposed Acquisition, the
Administrative Agent shall have received copies of the acquisition agreement and
related Contractual Obligations and other documents (including financial information
and analysis, environmental assessments and reports, opinions, certificates and lien
searches) and information reasonably requested by the Administrative Agent, (c) as
of the date of consummation of such Proposed Acquisition and after giving effect to
all transactions to occur on such date as part of such Proposed Acquisition, (1) all
conditions set forth in clauses (i) and (ii) of Section
3.2(b) shall be satisfied or duly waived, (2) Holdings shall, on a Pro Forma
Basis as of the last day of the last Fiscal Quarter for which Financial Statements
have been delivered hereunder, have a Consolidated Total Leverage Ratio and
Consolidated Senior Leverage Ratio which are at least 0.25:1.00 less than the
required thresholds set forth in Sections 5.1 and 5.2 as of such
date, as applicable, and (3) Holdings shall have Liquidity of at least $20,000,000
and (d) such Proposed Acquisition is consummated no earlier than December 31, 2010.

     “Revolving Credit Commitment” means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and acquire interests in other
Revolving Credit Outstandings, which commitment is in the amount set forth opposite
such Lender’s name on Schedule I under the caption “Revolving Credit
Commitment” or in the Additional Revolving Credit Commitment Assumption
Agreement pursuant to which such Lender agreed to provide an

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additional Revolving Credit Commitment, as applicable, as amended to reflect
Assignments and as such amount may be reduced pursuant to this Agreement. The
aggregate amount of the Revolving Credit Commitments on the Signing Date equals
$25,000,000.

     “Term Loan” has the meaning specified in Section 2.1(b).
Unless the context shall otherwise require, the term “Term Loan” shall include any
Incremental Term Loan.

     “Term Loan Commitment” means, with respect to each Term Loan Lender,
the commitment of such Lender to make Term Loans to the Borrowers, which commitment
is in the amount set forth opposite such Lender’s name on Schedule I under
the caption “Term Loan Commitment”, as amended to reflect Assignments and as
such amount may be reduced pursuant to this Agreement. The aggregate amount of the
Term Loan Commitments on the Signing Date equals $200,000,000. Unless the context
shall otherwise require, the term “Term Loan Commitments” shall include the
Incremental Term Loan Commitments.

     2. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is further amended
by inserting the following new defined terms in appropriate alphabetical order:

     “Additional Revolving Credit Commitment Amount” shall mean, at any
time, the excess, if any, of (a) $50,000,000 over the sum of (b)(i) the aggregate
amount of all Incremental Term Loan Commitments established prior to such time
pursuant to Section 2.20 plus (ii) the aggregate amount of all additional Revolving
Credit Commitments established prior to such time pursuant to Section 2.20.

     “Additional Revolving Credit Commitment Assumption Agreement” shall
mean an Additional Revolving Credit Commitment Assumption Agreement among, and in
form and substance reasonably satisfactory to, the Borrower, the Administrative
Agent and one or more Lenders providing additional Revolving Credit Commitments
pursuant to Section 2.20.

     “Incremental Term Borrowing” shall mean a Borrowing comprised of
Incremental Term Loans.

     “Incremental Term Loan Lender” shall mean a Lender with an Incremental
Term Loan Commitment or an outstanding Incremental Term Loan.

     “Incremental Term Loan Amount” shall mean, at any time, the excess, if
any, of (a) $50,000,000 over the sum of (b)(i) the aggregate amount of all
Incremental Term Loan Commitments established prior to such time pursuant to Section
2.20 plus (ii) the aggregate amount of all additional Revolving Credit Commitments
established prior to such time pursuant to Section 2.20.

     “Incremental Term Loan Assumption Agreement” shall mean an Incremental
Term Loan Assumption Agreement among, and in form and

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substance reasonably satisfactory to, the Borrower, the Administrative Agent and one or more Incremental
Term Loan Lenders.

     “Incremental Term Loan Commitment” shall mean the commitment of any
Lender, established pursuant to Section 2.20, to make Incremental Term Loans to the
Borrowers.

     “Incremental Term Loan Maturity Date” shall mean the final maturity
date of any Incremental Term Loan, as set forth in the applicable Incremental Term
Loan Assumption Agreement.

     “Incremental Term Loan Repayment Dates” shall mean the dates scheduled
for the repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Term Loan Assumption Agreement.

     “Incremental Term Loans” shall mean Term Loans made by one or more
Lenders to the Borrowers pursuant to Section 2.1(c). Incremental Term Loans may be
made in the form of additional Term Loans or, to the extent permitted by Section
2.20 and provided for in the relevant Incremental Term Loan Assumption Agreement,
Other Term Loans.

     “Other Term Loans” shall have the meaning assigned to such term in
Section 2.20(a)(i).

     3. Amendment to Section 2.1. Section 2.1 of the Credit Agreement is amended by
inserting the following new Section 2.1(c) at the end thereof:

     (c) Incremental Term Loan Commitments. On the terms and subject to the
conditions contained in this Agreement and in the applicable Incremental Term Loan
Assumption Agreement, each Lender having an Incremental Term Loan Commitment
severally, but not jointly, agrees to make Incremental Term Loans to the Borrower,
in an amount not to exceed such Lender’s Incremental Term Loan Commitment. Amounts
of Incremental Term Loans repaid may not be reborrowed.

     4. Amendment to Section 2.2(a). Section 2.2(a) of the Credit Agreement is amended by
inserting the following at the end thereof, prior to the period:

     (except, with respect to any Incremental Term Borrowing, to the extent
otherwise provided in the related Incremental Term Loan Assumption Agreement).

     5. Amendment to Section 2.5(b). Section 2.5(b) of the Credit Agreement is amended by
replacing such subsection in its entirety with the following:

     (b) Mandatory. All outstanding (i) Revolving Credit Commitments shall
terminate on the Scheduled Revolving Credit Termination Date and (ii) Term Loan
Commitments (other than any Incremental Term Loan Commitments,

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which shall terminate as provided in the related Incremental Term Loan Assumption Agreement) shall
terminate on the Closing Date after the funding of the Term Loans; provided,
however, that all Commitments shall terminate on October 15, 2010, if all of the
conditions precedent set forth in Section 3.1 have not been satisfied or duly waived
on or before such date.

     6. Amendment to Section 2.6(b). Section 2.6(b) of the Credit Agreement is amended by
replacing such subsection in its entirety with the following:

     (b) The aggregate principal amount of the Term Loans (other than any Other Term
Loans) shall be paid in equal quarterly installments of $5,000,000 (subject to
adjustment pursuant to Section 2.20(e)) commencing on January 1, 2011 and continuing
on the first day of each January, April, July and October thereafter, with a final
scheduled installment of the Term Loans due and payable on the Term Loan Maturity
Date in an amount equal to the entire remaining principal balance of the Term Loans.

     (c) The Borrowers promise to repay any Other Term Loans on the applicable
Incremental Term Loan Maturity Date and on the applicable Incremental Term Loan
Repayment Dates and in the amounts set forth in the applicable Incremental Term Loan
Assumption Agreement.

     7. Amendment to Article 2. Article 2 of the Credit Agreement is amended by adding the
following new Section 2.20 at the end thereof:

     Section 2.20 Incremental Term Loans and Commitments.

     (a) (i) The Borrower Representative may, by written notice to the
Administrative Agent from time to time, request Incremental Term Loan Commitments in
an amount not to exceed the Incremental Term Loan Amount from one or more
Incremental Term Loan Lenders, each of which must be (u) an existing Lender, (v) any
Affiliate or Approved Fund of any existing Lender or (w) any other Person acceptable
(which acceptance shall not be unreasonably withheld or delayed) to the
Administrative Agent. Such notice shall set forth (x) the amount of the Incremental
Term Loan Commitments being requested (which shall be in minimum increments of
$1,000,000 and a minimum amount of $5,000,000 or such lesser amount equal to the
remaining Incremental Term Loan Amount), (y) the date on which such Incremental Term
Loan Commitments are requested to become effective (which shall not be less than 10
Business Days nor more than 60 days after the date of such notice), and (z) whether
such Incremental Term Loan Commitments are commitments to make additional Term Loans
or commitments to make term loans with terms different from the Term Loans
(“Other Term Loans”).

          (ii) The Borrower Representative may, by written notice to the Administrative
Agent from time to time, request additional Revolving Credit Commitments in an
amount not to exceed the Additional Revolving Credit Commitment Amount from one or
more Persons, each of which must be (x) an

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existing Lender, (y) any Affiliate or Approved Fund of any existing Lender or (z) any other Person acceptable (which
acceptance shall not unreasonably withheld or delayed) to the Administrative Agent.
Such notice shall set forth (x) the amount of the additional Revolving Credit
Commitments being requested (which shall be in minimum increments of $1,000,000 and
a minimum amount of $5,000,000 or such lesser amount equal to the remaining
Additional Revolving Credit Commitment Amount) and (y) the date on which such
additional Revolving Credit Commitments are requested to become effective (which
shall not be less than 10 Business Days nor more than 60 days after the date of such
notice).

     (b) (i) The Borrower Representative will first seek Incremental Term Loan
Commitments from existing Lenders (each of which may agree or decline to participate
in its sole discretion) and, if additional commitments are needed, from other
Persons who will become Incremental Term Loan Lenders in connection therewith. The
Borrowers and each Incremental Term Loan Lender shall execute and deliver to the
Administrative Agent an Incremental Term Loan Assumption Agreement and such other
documentation as the Administrative Agent shall reasonably specify to evidence the
Incremental Term Loan Commitment of each Incremental Term Loan Lender.

          (ii) The Borrower Representative will first seek additional Revolving Credit
Commitments from existing Lenders (each of which may agree or decline to participate
in its sole discretion) and, if additional commitments are needed, from other
Persons who will become Revolving Credit Lenders in connection therewith. The
Borrowers and each Person providing an additional Revolving Credit Commitment shall
execute and deliver to the Administrative Agent an Additional Revolving Credit
Commitment Assumption Agreement and such other documentation as the Administrative
Agent shall reasonably specify to evidence the additional Revolving Credit
Commitment of each such Person. The terms and provisions of such additional
Revolving Credit Commitments and Revolving Loans made under such additional
Revolving Credit Commitments shall be identical to those of the existing Revolving
Credit Commitments and Revolving Loans, respectively.

     (c) Without the prior written consent of the Required Lenders, (i) the final
maturity date of any Other Term Loans shall be no earlier than the Term Loan
Maturity Date, (ii) the average life to maturity of the Other Term Loans shall be no
shorter than the average life to maturity of the Term Loans and (iii) except as
otherwise set forth herein or in the Incremental Term Loan Assumption Agreement, the
Other Term Loans shall (A) be treated substantially the same as (and in any event,
no more favorably than) the Term Loans and (B) accrue interest at rates determined
by the Borrowers and the Incremental Term Loan Lenders providing such Other Term
Loans, which rates may be higher or lower
than the rates applicable to the Term Loans; provided, however,
that if the initial yield on such Other Term Loans (as determined by the
Administrative Agent to be equal to the sum of (x) the margin above the Eurodollar
Rate on such Other Term Loans and (y) if such Other Term Loans are initially made at
a discount or the Lenders making the same receive a fee directly or indirectly from
Holdings,

6

 

the Borrowers or any Subsidiary for doing so (the amount of such discount
or fee, expressed as a percentage of the Other Term Loans, being referred to herein
as “OID”), the amount of such OID divided by the lesser of (A) the average
life to maturity of such Other Term Loans and (B) four) exceeds the Applicable
Margin then in effect for Eurodollar Rate Term Loans by more than 50 basis points
(the amount of such excess above 50 basis points being referred to herein as the
“Yield Differential”), then the Applicable Margin then in effect for Term
Loans and the Revolving Credit Commitments shall automatically be increased by the
Yield Differential, effective upon the making of the Other Term Loans;
provided, further, that in calculating the Yield Differential,
customary arrangement or commitment fees paid or payable to one or more arrangers of
any such Other Term Loans in their capacities as such shall be excluded. The
Administrative Agent shall promptly notify each Lender as to the effectiveness of
each Incremental Term Loan Assumption Agreement and each Additional Revolving Credit
Commitment Assumption Agreement. Each of the parties hereto hereby agrees that, upon
the effectiveness of any Incremental Term Loan Assumption Agreement or Additional
Revolving Credit Commitment Assumption Agreement, this Agreement shall be deemed
amended to the extent (but only to the extent) necessary to reflect the existence
and terms of the Incremental Term Loan Commitment and the Incremental Term Loans
evidenced thereby or the additional Revolving Credit Commitment and additional
Revolving Loans evidenced thereby, as applicable, and the Administrative Agent and
the Borrowers may revise this Agreement to evidence such amendments.

     (d) Notwithstanding the foregoing, no Incremental Term Loan Commitment or
additional Revolving Credit Commitment shall become effective under this Section
2.20 unless (i) on the date of such effectiveness, the conditions set forth in
paragraph (b) of Section 3.2 shall be satisfied and the Administrative Agent
shall have received a certificate to that effect dated such date and executed by a
Responsible Officer of the Borrower Representative, (ii) except as otherwise
specified in the applicable Incremental Term Loan Assumption Agreement or Additional
Revolving Credit Commitment Assumption Agreement, the Administrative Agent shall
have received legal opinions, board resolutions and other closing certificates
reasonably requested by the Administrative Agent and consistent with those delivered
on the Closing Date under Section 3.1, (iii) after giving effect to such
Incremental Term Loan Commitment and the Incremental Term Loans to be made
thereunder and the application of the proceeds therefrom, the Borrowers shall be in
compliance with the financial covenants set forth in Sections 5.1, 5.2 and 5.3 on a
Pro Forma Basis as of the last day of the last Fiscal Quarter for which Financial
Statements are required to be delivered hereunder and (iv) to the extent reasonably
necessary to maintain the continuing priority of the Lien of the Mortgages as
security for the Obligations, as determined by the
Administrative Agent in its reasonable discretion (x) the applicable Loan Party
to any Mortgages shall have entered into, and delivered to the Administrative Agent,
at the direction and in the sole discretion of the Administrative Agent a mortgage
modification or new Mortgage in proper form for recording in the relevant
jurisdiction and in a form reasonably satisfactory to the Administrative Agent, (y)
the Borrowers shall have caused to be delivered to the Administrative Agent for

7

 

the benefit of the Secured Parties an endorsement to the title insurance policy, date
down(s) or other evidence reasonably satisfactory to the Administrative Agent
insuring that the priority of the Lien of the Mortgages as security for the
Obligations has not changed and confirming and/or insuring that since the issuance
of the title insurance policy there has been no change in the condition of title and
there are no intervening liens or encumbrances which may then or thereafter take
priority over the Lien of the Mortgages (other than those expressly permitted by
Section 8.2) and (z) the Borrowers shall have delivered, at the request of
the Administrative Agent, to the Administrative Agent and/or all other relevant
third parties all other items reasonably necessary to maintain the continuing
priority of the Lien of the Mortgages as security for the Obligations.

     (e) (i) Each of the parties hereto hereby agrees that the Administrative Agent
may, in consultation with the Borrower Representative, take any and all action as
may be reasonably necessary to ensure that all Incremental Term Loans (other than
Other Term Loans), when originally made, are included in each Borrowing of
outstanding Term Loans on a pro rata basis. This may be accomplished by requiring
each outstanding Borrowing of Eurodollar Rate Term Loans to be converted into a
Borrowing of Base Rate Term Loans on the date of each Incremental Term Loan, or by
allocating a portion of each Incremental Term Loan to each outstanding Borrowing of
Eurodollar Rate Term Loans on a pro rata basis. Any conversion of Eurodollar Term
Loans to Base Rate Term Loans required by the preceding sentence shall be subject to
Section 2.16. If any Incremental Term Loan is to be allocated to an
existing Interest Period for a Borrowing of Eurodollar Rate Term Loans, then the
interest rate thereon for such Interest Period and the other economic consequences
thereof shall be as set forth in the applicable Incremental Term Loan Assumption
Agreement. In addition, to the extent any Incremental Term Loans are not Other Term
Loans, the scheduled amortization payments under Section 2.6(b) required to
be made after the making of such Incremental Term Loans shall be ratably increased
by the aggregate principal amount of such Incremental Term Loans and shall be
further increased for all Lenders on a pro rata basis to the extent necessary to
avoid any reduction in the amortization payments to which the Term Loan Lenders were
entitled before such recalculation.

          (ii) Each of the parties hereto hereby agrees that the Administrative Agent
may, in consultation with the Borrower Representative, take any and all action as
may be reasonably necessary to ensure that, upon the effectiveness of each
additional Revolving Credit Commitment, (y) Revolving Loans made under such
additional Revolving Credit Commitment are included in each Borrowing of outstanding
Revolving Loans on a pro rata basis and (z) the
Lender providing each additional Revolving Credit Commitment shares ratably in
the aggregate Pro Rata Outstandings under the Revolving Credit Facility.

     (f) All repayments of Term Loans pursuant to Section 2.12(c) and (d) shall be
allocated ratably among the initial Term Loans and all Incremental Term Loans.

8

 

     8. Amendment to Section 7.9. Section 7.9 of the Credit Agreement is amended by
inserting the following at the end thereof:

     The proceeds of the Incremental Term Loans shall be used by the Borrowers (and,
to the extent distributed to them by the Borrowers, each other Group Member) solely
for the purposes specified herein and in the applicable Incremental Term Loan
Assumption Agreement.

     9. Amendment to Section 8.5(j). Section 8.5(j) of the Credit Agreement is amended by
replacing such subsection in its entirety with the following:

     (j) other Restricted Payments by the Group Members funded with Additional
Available Cash 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; provided, that at the
time any such Restricted Payment is made no Default or Event of Default shall exist
or shall result therefrom.

     10. Amendment to Section 8.5. Section 8.5 of the Credit Agreement is amended by
adding the following subsection (k):

     (k) the Group Members may 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 repurchase) shares of Stock or Stock
Equivalents of Holdings so long as at the time of any such repurchase, (x) no
Default or Event of Default shall exist or shall result therefrom and (y) the
aggregate amount of consideration for all such repurchases of Stock and Stock
Equivalents of Holdings does not exceed $25,000,000.

B. CONDITIONS TO EFFECTIVENESS

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

     1. The conditions to effectiveness set forth in that certain Second Amendment to Senior
Subordinated Note Purchase Agreement, dated as of July 11, 2011, by and among the Borrowers,
Holdings, and the holders of the Subordinated Notes (the “Subordinated Notes Second
Amendment”) shall have been satisfied, including the
payment of the Second Amendment Fee (as defined in the Subordinated Notes Second
Amendment), and the Subordinated Notes Second Amendment shall have become effective and be
in full force and effect with no amendments or modifications thereto;

     2. The Administrative Agent shall have received duly executed signature pages to this
Amendment from the Required Lenders, the Borrowers, Holdings, and the Administrative Agent;
and

9

 

     3. The Borrowers shall have paid an amendment fee (the “Amendment Fee”) to the
Administrative Agent for the benefit of each Lender consenting to this Amendment in an
amount equal to 0.05% of the sum of the Revolving Credit Commitments and outstanding
principal amount of Term Loans, in each case held by such Lender.

C. REPRESENTATIONS

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

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

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

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

D. OTHER AGREEMENTS

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

10

 

hereby deemed modified and amended accordingly to reflect the terms and conditions of
the Credit Agreement as modified and amended hereby.

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

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

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

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

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

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

11

 

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

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

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

[remainder of page intentionally left blank]

12

 

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

	 	 	 	 	 
	 	CBAY INC.

     AS BORROWER

 	 
	 	By:  	V. Raman Kumar
 	 
	 	 	Name:  	V. Raman Kumar 	 
	 	 	Title:  	Directors 	 
	 
	 	MEDQUIST INC.

     AS BORROWER

 	 
	 	By:  	Mark R. Sullivan
 	 
	 	 	Name:  	Mark R. Sullivan 	 
	 	 	Title:  	General Counsel 	 
	 
	 	MEDQUIST TRANSCRIPTIONS, LTD.

     AS BORROWER

 	 
	 	By:  	Mark R. Sullivan
 	 
	 	 	Name:  	Mark R. Sullivan 	 
	 	 	Title:  	General Counsel 	 
	 
	 	MEDQUIST HOLDINGS INC.

     AS HOLDINGS

 	 
	 	By:  	Mark R. Sullivan
 	 
	 	 	Name:  	Mark R. Sullivan 	 
	 	 	Title:  	General Counsel 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL

CORPORATION, as Administrative Agent and Lender

 	 
	 	By:  	/s/ Kevin Blitz
 	 
	 	 	Name:  	Kevin Blitz 	 
	 	 	Its Duly Authorized Signatory 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	
SUNTRUST BANK, as Lender

 	 
	 	By:  	/s/ John Cappellari
 	 
	 	 	Name:  	John Cappellari 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	
ING CAPITAL LLC, as Lender

 	 
	 	By:  	/s/ Mike Garvin
 	 
	 	 	Name:  	Mike Garvin 	 
	 	 	Title:  	Managing Director 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	REGIONS BANK, as Lender

 	 
	 	By:  	/s/ Kap Yarbrough
 	 
	 	 	Name:  	Kap Yarbrough 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	
CAPITALSOURCE BANK, as Lender

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

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA, as Lender 

 	 
	 	By:  	/s/ Dean Sas
 	 
	 	 	Name:  	Dean Sas 	 
	 	 	Title:  	Authorized Signatory 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	FIFTH THIRD BANK, as Lender

 	 
	 	By:  	/s/ Megan Brearey
 	 
	 	 	Name:  	Megan Brearey 	 
	 	 	Title:  	AVP 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	FIFTEENTH INVESTMENT HFS LIMITED,

     as Lender

 	 
	 	By:  	GENERAL ELECTRIC CAPITAL
 	 
	 	 	CORPORATION, as Servicer 	 
	 	 	 	 
	 	By:  	 /s/ Kevin Blitz
 	 
	 	 	Name:  	Kevin Blitz 	 
	 	 	Title:  	Duly Authorized Signatory 	 
	 

[Signature Page to Second Amendment — MedQuist]

 

 

	 	 	 	 	 
	 	MIHI LLC, as Lender

 	 
	 	By:  	/s/ Stephen Mehos
 	 
	 	 	Name:  	Stephen Mehos 	 
	 	 	Title:  	Authorized Signatory 	 
	 	 	 
	 	By:  	 /s/ Kevin Smith
 	 
	 	 	Name:  	Kevin Smith 	 
	 	 	Title:  	Authorized Signatory 	 
	 	 	 

[Signature Page to Second Amendment — MedQuist]

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