AMENDED AND RESTATED OEM SUPPLY AGREEMENT

Exhibit 10.7

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions are marked by a series of asterisks.

AMENDED AND RESTATED OEM SUPPLY AGREEMENT

THIS AMENDED AND RESTATED OEM SUPPLY AGREEMENT (the “Agreement”, “Amended and Restated Agreement”) is entered into and made effective as of September 21, 2007 (“Amended and Restated Agreement Effective Date”), amending and restating that certain OEM Supply Agreement made and entered into as of the 23rd day of September, 2004 (the “Original Effective Date”), by and between Philips Speech Recognition Systems GmbH f/k/a Philips Austria GmbH, Philips Speech Processing, a Republic of Austria corporation (hereinafter “PSP”), and MEDQUIST INC., a New Jersey, USA corporation (hereinafter “MedQuist”).

MedQuist and PSP hereinafter also collectively referred to as the “Parties” and individually as a “Party”.

RECITALS

WHEREAS, MedQuist and PSP entered into that certain OEM Supply Agreement (the “Original Agreement”) as of the Original Effective Date; and

WHEREAS, the parties desire to amend and restate the Original Agreement as set forth herein.

NOW THEREFORE, in consideration of the mutual agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, it is mutually agreed and covenanted by and between the parties to this Amendment, as follows:

1. Definitions.

1.1 [Intentionally Omitted]

1.2 “Documentation” means user manuals, training materials, product descriptions, product specifications, technical manuals, license agreements, supporting materials, and like information related to the Products, which Documentation may be distributed in print, electronic, video, or other formats.

1.3 “End User” means the means final retail purchasers or licensees at the sites where
the Products are installed.

1.4 “Products” means, individually or collectively as appropriate, the Software, Documentation, developed products and hardware, supplies, accessories, and other commodities related to any of the foregoing, provided or to be provided by PSP pursuant to this Agreement, as described in Schedule B attached to this Agreement, as modified from time to time.

1.5 “Affiliate” shall mean any corporation, limited liability company, partnership or other legal entity, present or future, which is owned or controlled or owns or controls or is under common control with, directly or indirectly, a Party to this Agreement, as the case may be, as long as such ownership or control exists and where control means ownership or control of more than fifty percent (50%) of voting stock in the case of a stock-issuing entity, or more than fifty percent (50%) of voting


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control of a non-stock-issuing entity. For the purpose of this Agreement MedQuist and PSP shall not be deemed to be each others Affiliates.

1.6 “Software” means certain computer programs and software (collectively, the “Programs”), which Programs may incorporate certain third-party software products provided or to be provided by PSP pursuant to this Agreement.

1.7 “Source Code” means the underlying instructions for a computer written in programming languages, including all embedded comments, as well as procedural code such as job control language statements, in a form readable by human beings when displayed on a monitor or printed on paper, etc. and that must be translated (using off-the-shelf commercially available software compilers, linkers and assemblers or other items delivered with such code or reasonably available including documentation) into a form that is directly executable by a computer by a process generally known as compiling or assembly, along with any related documentation, including annotations, flow charts, schematics, statements of principles of operations, software summaries, software design, program logic, program listings, functional specifications, logical models and architecture standards, describing the data flows, data structures, and control logic of the software. For purposes of this Agreement, mere access to the Source Code in the PSP online controlled environment is not a sufficient provision or transfer of Source Code hereunder.

1.8 “Intellectual Property Rights” shall mean any and all patents, utility certificates, utility models, industrial design rights, copyrights, database rights, trade secrets, any protection offered by law to information, semiconductor IC topography rights and all registrations, applications, renewals, extensions, combinations, divisions, continuations or reissues of any of the foregoing.

2. Grant of license.

2.1 Subject to the terms of this Agreement and MedQuist’s rights under Sections 15 and 17, PSP hereby grants to MedQuist, and MedQuist hereby accepts from PSP, an exclusive, perpetual and non-transferable license to offer for sale, sublicense, sell, deliver and service the Products, and to authorize others to offer for sale, sublicense, sell, deliver, and service the Products, directly and through one or more tiers of distributors, dealers, and resellers (collectively, the “Dealers”), within the territory set forth on Schedule A to this Agreement (“Territory”); provided that such rights are nonefxclusive for the specified nonexclusive Territory on Schedule A.

2.2 PSP reserves all rights related to the Products that PSP does not expressly grant MedQuist in this Agreement. Outside MedQuist’s exclusive Territory, PSP may offer for sale, sell, deliver, and service the Products, and may authorize others to offer for sale, sell, deliver, and service the Products, without providing any rights or compensation to MedQuist. During and after the Term, inside MedQuist’s exclusive Territory, PSP and any Affiliate: (i) may not offer for sale, sell, deliver or service the Products; or (ii) authorize others to offer for sale, sell, deliver, or service the Products.

2.2.1 [Intentionally Omitted]

2.2.2 [Intentionally Omitted]

2.2.3 [Intentionally Omitted]


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2.3 MedQuist is authorized to appoint Dealers within the Territory defined in Schedule A to offer for sale, sell, deliver, and service the Products at its discretion and without approval from PSP. MedQuist will give PSP written notice of the identity of any Dealer that MedQuist intends to appoint in the non-exclusive Territory. MedQuist will ensure that all Dealers appointed by MedQuist are sufficiently trained and competent to sell and support the Product in their respective territories.

3. Initial Term and Renewal.

3.1 Initial Term. This Agreement will be deemed to have commenced on June 1, 2004, and had an initial term that ended on June 30, 2007 (“Initial Term”). Pursuant to the renewal terms set forth below in Section 3.2, the term was extended through June 30, 2010 for the first Renewal Term (of the two possible Renewal Terms), and is subject to termination as set forth in this Agreement.

3.2 Renewal. Subject to Philips’ right to terminate below, this Agreement will automatically renew for two (2) additional three (3) year terms (each such renewal term being referred to in this Agreement as a “Renewal Term,” and together with the Initial Term referenced above in Section 3.1 as the “Term”), provided that MedQuist is, at the end of the Initial Term or the first Renewal Term, in material compliance with this Agreement. If PSP decides to discontinue all business relating to the Products in the Territory on or after June 30, 2010, PSP can effect such discontinuation by terminating this Agreement by providing Medquist six (6) months prior written notice of such discontinuation (by way of clarification, the earliest such discontinuation can therefore occur is at the end of the first Renewal Term (June 30, 2010), and therefore the notice of termination from PSP for such date would have to be provided to MedQuist by January 1, 2010). Otherwise, this Agreement will automatically expire at the end of the second Renewal Term (June 30, 2013).

3.2.1 [Intentionally Omitted]

3.2.2 [Intentionally Omitted]

4. Fees.

4.1 Product Co-Ownership Fee. In consideration of PSP’s grant of co-ownership of the Products in accordance with the terms of this Agreement, MedQuist will pay PSP a Product co-ownership fee in cash in the amount of ******* (the “Product Co-Ownership Fee”), as follows: 100% on the date PSP delivers a duly-executed original of this Amended and Restated Agreement and a copy of the Source Code of the Products to MedQuist.

4.2 License Fee. During the Term, MedQuist will pay PSP sums owed for the License Fees set forth on Schedule C to this Agreement, on a calendar monthly basis, within ******* from the end of each such calendar month. The foregoing does not alter the reporting requirement of Section 6.2. For License Fees set forth on Schedule C to this Agreement and software maintenance fees set forth in Section 4.3 reported in calendar year 2006, the Parties agree that these License Fees and software maintenance fees only become due after MedQuist reports in writing to PSP that these Product installations have been successfully implemented at the MedQuist customer sites. For calendar year 2007 and thereafter, the Parties agree to jointly annually review the payment terms if the implementation phase at the MedQuist customer sites, as determined by MedQuist, can on average be reduced from currently ******* (as of the Amended and Restated Agreement Effective Date) to ******* or less. In that case the payment terms set forth in this Section will be reduced from ******* or any agreed upon shorter period


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required for the average implementation.

4.3 Software Maintenance Fee.

4.3.1 During the Term, MedQuist will use reasonable commercial efforts to sell its End Users a software maintenance agreement (an “SMA”). Such SMA will provide that the subscribing End User will obtain, directly from PSP or from PSP through MedQuist or directly from MedQuist, as MedQuist deems appropriate:

4.3.1.1 Software Releases. As used in this Agreement, “Software Release” means a new version of the Products delivered to MedQuist for internal or external user testing or commercial availability. Software Releases are typically numbered sequentially (e.g., Release 4.x, Release 6.x).

4.3.1.2 Patch Releases. As used in this Agreement, “Patch Release” means a change PSP makes to a Software Release, which is an internal change designed to correct minor anomalies or defects in the Software (colloquially referred to as “bugs”), or otherwise to provide minor improvements to performance without changing the Software’s basic design, structure, or functionality. Patch Releases are typically numbered to signify modifications to a version of Software Release (e.g., Version 4.1.05, Version 4.1.06).

4.3.1.3 Point Releases. As used in this Agreement, “Point Release” means a modification or enhancement (colloquially referred to as an “upgrade”) to a Software Release that: (i) enables the Software Release to perform new or different functions; (ii) increases the capability of the Software; or (iii) enables the Software to function on new or different hardware or in a new or different software environment without changing its basic design, structure or functionality. Point Releases are typically numbered as versions of a Software Release (e.g., Version 4.1, Version 4.2, etc.).

4.3.1.4 Technical Support to resolve technical issues that are more practicably resolved by PSP (as to PSP supported Products) than by MedQuist.

4.3.2 SMA contracts MedQuist sells will begin at the end of PSP’s Warranty Period (as set forth in Section 8.1 of this Agreement) and will be renewable on an annual basis. In the event that MedQuist allows an End User to terminate or cancel an SMA before the end of the term of such SMA, MedQuist will provide notice of such termination to PSP, and PSP will refund to MedQuist the pro-rata portion of fees paid to PSP for such SMA within thirty (30) days after MedQuist provides such notice.

4.3.3 For each SMA contract that MedQuist sells, it will pay PSP the following sums within ******* after the reporting date for the Software licenses are due per Section 6.2.:

4.3.3.1 For sums owed for the period beginning with the Original Effective Date of this Agreement through June 30, 2006: ******* of the License Fee set forth on Schedule C to this Agreement.

4.3.3.2 For sums owed for the period beginning July 1, 2006, through the remainder of the Initial Term and all Renewal Terms of this Agreement: ******* of the License Fee set forth on Schedule C to this Agreement.

4.3.4 All sums owed set forth in Section 4.3.3 of this Agreement: (i) will he


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calculated based on the License Fee and without regard to any discounts available to MedQuist; and (ii) will be amortized on a straight-line basis for each month over the term of the SMA.

4.3.5 PSP will maintain the current code base of the Products until the earlier of: (i) *******; or (ii) MedQuist terminates the PSP maintenance and support obligations hereunder via thirty (30) days advance written notice to PSP. The PSP maintenance includes supporting MedQuist integrations of the Products to PACS, RIS and HIS vendors existing as of September 30, 2007. If the actual costs of PSP for maintaining the Products (the “Maintenance Costs”) during the period commencing on ******* and ending on ******* (the “Maintenance Period”) are higher than the Software maintenance fees to be paid to PSP during that period, then PSP shall be entitled to request a reasonable increase of the maintenance fees; provided, however, that in connection with such request, PSP will provide to MedQuist all necessary supporting cost documentation and will permit MedQuist representatives to audit such information upon reasonable advance notice from MedQuist; provided further, that PSP shall provide MedQuist with (i) a good faith estimate of the Maintenance Costs incurred by PSP during each calendar month within the Maintenance Period (each month a “Reporting Month”) no later than ten (10) days following the last day of such Reporting Month, and (ii) a report detailing the actual Maintenance Costs incurred by PSP during each Reporting Month no later than twenty-five (25) days following the last day of such Reporting Month.

4.4 Additional Development Fees: MedQuist agrees to fund the development of a version 1.2 “Lite” of the Software in 2007 as specified in NEW SCHEDULE A-1 (SOW) to this Agreement. The “Additional Development Fee” to be paid by MedQuist to PSP for such development is dependent upon the actual hours spent and the prices per hour as itemized in NEW SCHEDULE B-1 to this Agreement. The current estimated Additional Development Fee is based on an estimate of ******* on average per month, starting from July 2007 until December 31, 2007; provided, however that PSP and MedQuist agree to a “not to exceed” cap on the Additional Development Fee of *******. Any changes to the specifications in NEW SCHEDULE A-1 (SOW) are subject to mutual agreement and may have influences on the required development work and/or may require an increase or reduction to the “not to exceed” cap. The product and program management of version 1.2 “Lite” will be a collaborative effort between PSP and MedQuist. In addition, because of the version 1.2 “Lite” timeline (as further described in Section 7), the SOW includes a supplemental role for MedQuist in additional quality assurance testing of this version of the Software. PSP will provide MedQuist a monthly detailed accounting, within thirty (30) days of the end of each calendar month, of the monthly hours and an agreed rate will be set as described in NEW SCHEDULE B-1.

4.5 Additional Consulting Services. During the Term, for matters not related to version 1.2 “Lite” but involving MedQuist development related to the Philips SpeechMagic SDK, PSP will provide to MedQuist, upon MedQuist’s request from time to time, and at no additional charge to MedQuist, additional consulting/development/training services worth an aggregate of ******* (using the rates set forth in NEW SCHEDULE B-1) (“Additional Consulting Services”). The Additional Consulting Services will be tracked using the same process as the development hours set forth in Section 4.4 above. Any additional consulting services to be provided by PSP beyond the Additional Consulting Services specified in this Section, shall be subject to the mutual agreement of PSP and MedQuist.

5. Order Placement.

5.1 Upon MedQuist’s request, PSP will provide MedQuist with the Products as described in this Agreement, including without limitation the accompanying Schedules.

5.2 PSP will deliver to MedQuist a “gold master” of the then-current version of the Software: (i) within seven (7) days after the execution and delivery of this Amended and Restated


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Agreement by both parties to this Agreement; and (ii) promptly on the commercial availability of each Software Release. Software MedQuist distributes under this Agreement will be copies of the gold master PSP most recently furnished to MedQuist pursuant to this Agreement or, as determined by MedQuist, such other subsequent versions created by MedQuist following the transfer set forth in Section 15.

6. Payment.

6.1 MedQuist will pay such sums owed free and clear of, and without offset or deduction for, any and all state and local use, sales, property, and similar taxes, levied or assessed on or in respect of such payments (other than any tax measured by or attributable to MedQuist’s gross or net income), as and when the same are due.

6.2 By thirty (30) days after the end of each calendar month, MedQuist will furnish to PSP a written statement showing, in such detail as PSP may reasonably request, the quantities of Software actually licensed, and the quantities of Products actually sold and delivered, during the immediately-preceding month.

6.3 MedQuist will, throughout the Term of this Agreement and for one (1) year following the expiration or termination of this Agreement, maintain a full and accurate record of the number of copies of the Software sublicensed in such detail as may enable PSP to verify the amount of license fees due under this Agreement. So as to permit verification, MedQuist will permit PSP to examine such records on reasonable advance written notice, during normal business hours at MedQuist’s offices at reasonable intervals no more frequently than two (2) times per calendar year. PSP will bear all costs and expenses for such an examination, except in those cases in which the examining accountant ascertains a discrepancy of more than five percent (5%) during the audited period to the disadvantage of PSP between payments actually made and payments due, in which event MedQuist will reimburse PSP all reasonable costs and expenses for such audit.

6.4 PSP reserves the right to charge an interest rate of the lesser of: (i) eight percent (8%) per annum; or (ii) the maximum amount permitted by applicable law, on past-due sums MedQuist owes under this Agreement.

6.5 Payment of the Additional Development Fees outlined in 4.4 above will be due within thirty (30) days from the date of the invoice.

7. Development Services.

7.1 PSP will deliver a beta ready version of version 1.2 “Lite” Software to MedQuist for internal and external user testing on or before *******, including a full copy of the Source Code thereto (“Beta Deliverable”). PSP will deliver a commercial version 1.2 “Lite” Software to MedQuist on or before *******, including a full copy of the Source Code thereto (“Commercial Deliverable”). This will enable MedQuist to showcase a new version of the Software at the annual ******* and make the version commercially available by no later than *******.

7.2 Acceptance Process. “Deliverable” shall mean the Beta Deliverable or the Commercial Deliverable as applicable. MedQuist will notify PSP within 30 days after its receipt of the applicable Deliverable from PSP whether or not the Deliverable meets the applicable Acceptance criteria (“Acceptance Process”). If MedQuist determines that the Deliverable does not meet the applicable Acceptance criteria, MedQuist will notify PSP in writing of the non-conformities and/or Severity 1


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Defects, and PSP shall correct such non-conformities and/or Severity 1 Defects and then re-deliver the revised Deliverable to MedQuist as promptly as practicable (but in no later than thirty (30) days from the date MedQuist notifies PSP of the non-conformities and/or Severity 1 Defects). Upon such re-delivery, the Acceptance Process shall repeat until MedQuist has affirmatively notified PSP in writing that the Deliverable meets the applicable Acceptance criteria or thirty (30) days from such re-delivery have passed with no notification from MedQuist of any non-conformities and/or Severity 1 Defects in such Deliverable.

7.3 Acceptance Delays. To the extent that Acceptance of a Deliverable is delayed, for reasons solely attributable to PSP, beyond the original scheduled Acceptance date (for the Beta Deliverable: November 30, 2007; for the Commercial Deliverable: January 30, 2008), PSP shall pay to MedQuist ******* of delay until such Deliverable meets Acceptance (“Acceptance Delay Payments”). MedQuist may, at MedQuist’s option, in lieu of cash payments from PSP for the Acceptance Delay Payments, offset such amounts from any other payment amounts or obligations due from MedQuist to PSP.

7.4 Acceptance Definitions.

			“Acceptance” means the Products conform to the agreed product specification and feature content detailed in the Statement of Work in Schedule A and no mutually agreed to, new or subsequent Severity 1 Defect(s) have been identified in such Products during the acceptance testing.

			“Severity 1 Defect(s)” means a software defect that causes loss of critical functionality, or corruption or loss of data without possibility of recovery for which no work around exists. A work around that may exist will not alter the requirement that the Product meet the product specification and feature content detailed in the Statement of Work in Schedule A.

8. Limited Warranty.

8.1 PSP warrants that, for a period of ninety (90) days after the delivery date (the “Warranty Period”), the Software will perform in all material respects in accordance with the Documentation accompanying the Software. If any copy of the Software is found not to perform materially in accordance with the Documentation, PSP will correct such error or malfunction or (at PSP’s sole option) replace such Software free of charge as soon as is reasonably practicable, provided that: (i) the Software has been used in accordance with instructions for use; (ii) no alteration, modification or addition has been made to the Software without PSP’s prior written consent; and (iii) PSP has been promptly notified of the alleged non-conformity within the Warranty Period specified.

8.2 MedQuist will send each claim of MedQuist under this warranty to PSP in accordance with the notice provisions of this Agreement. Each such claim will state generally the nature of the alleged non-conformity. If PSP determines in its sole discretion to repair the Software (or such portion of it as is giving rise to the non-conformity), MedQuist will afford PSP a reasonable time in which to do so. Any Software so repaired or replaced will be warranted for such period of time as is remaining in the original Warranty Period.

8.3 This Limited Warranty is subject to the terms of Section 12 below. This Limited Warranty is PSP’s only obligations and the exclusive remedy of the End User with respect to the PSP supported Products and PSP’s only warranty with respect to the Products to the End User. PSP will have no responsibility whatsoever with respect to the Products if the failure is due to accident, abuse, or misapplication on the part of MedQuist or the End User.


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8.4 MedQuist may offer any warranty that PSP makes hereunder to any End Users provided that warranty claims by MedQuist’s End Users will be made solely against MedQuist and not PSP. The warranties contained in this Agreement are solely for the benefit of MedQuist.

9. Notification of Upgrades and Updates.

9.1 PSP will notify MedQuist of any revisions and updates to the Software with respect to the development, maintenance and other PSP services provided hereunder that affect the operation, performance, or cost of such Software.

9.2 MedQuist will apply any revisions or updates to the PSP supported Software as soon as reasonably practicable after receipt of notification from PSP.

10. MedQuist’s Representations and Undertakings. MedQuist represents and undertakes with PSP that:

10.1 It will use commercially reasonable efforts to promote, market, and sell the Products during the term of this Agreement;

10.2 It has the resources, facilities, and financial ability to market, distribute and provide first line customer support for the Product and fulfill all of its obligations under this Agreement;

10.3 [Intentionally Omitted]

10.4 It will not incur any liability on behalf of PSP, pledge or purport to pledge PSP’s credit, or purport to act as an agent of PSP or make any contract binding on PSP;

10.5 [Intentionally Omitted]

10.6 It will permit PSP or any independent third party PSP retains to enter MedQuist’s premises at a time MedQuist agrees to for the purpose of reviewing records related to this Agreement (including, without limitation, verifying the number of Software sublicenses granted by or through MedQuist and obtaining information concerning any Product complaints);

10.7 [Intentionally Omitted]

10.8 Third party software, as defined in Schedule E to this Agreement (the “Third Party Software”), that is provided by PSP to MedQuist and distributed with the Software will not be used in conjunction with any other programs or software whatsoever;

10.9 It will obtain and maintain at its sole risk, cost, and expense, all governmental approvals required for or applicable to its distribution and other activities contemplated by this Agreement, and will be responsible at its sole risk, cost, and expense for complying with all applicable governmental statues, regulations, and ordinances (collectively, the “Laws”) related to such activities; and

10.10 It will, before the delivery of the Products to an End User, ensure that such End


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User enters into a software license agreement with MedQuist that will accompany each copy of the Software in substantially the form set forth on Schedule F to this Agreement or such other end user license agreement as determined by MedQuist from time to time (the “End User License Agreement”). MedQuist will, from time to time, provide PSP with a copy of any such updates to MedQuist’s standard End User License Agreement as such applies to the PSP supported Products.

11. PSP’s Obligations. PSP covenants, warrants, and agrees that it:

11.1 Has the necessary approvals and licenses to grant to MedQuist the co-ownership, right to use, sublicense, and distribute the Software in accordance with the terms of this Agreement.

11.2 Has the resources, facilities, and financial ability to develop and provide second line
support for the Products and to fulfill all of its obligations under this Agreement.

11.3 Will provide initial 2 days of training in the use of the Products to technical staff of MedQuist at no additional charge, at the place agreed on by both parties. PSP and MedQuist will mutually limit the number of personnel participating in training sessions. On MedQuist’s request, PSP will provide a similar training program for all upgrades to the Software. Each first technical training for a new version will be done free of charge; for any subsequent training, PSP and MedQuist will agree on a reasonable price.

11.4 Will at all times during the Term of this Agreement and where applicable, following
termination hereof, observe and perform the terms and conditions set out in this Agreement.

11.5 [Intentionally Omitted]

11.6 Will not, during the Term of this Agreement, develop, create or release a front-end multi-user reporting solution (including but not limited to the Products or any solution substantially similar thereto) into the medical market in North America (as defined in Schedule B) nor, directly authorize, direct, assist or otherwise facilitate any of its Affiliates to do so.; however, for avoidance of doubt, nothing stated in this clause shall prohibit PSP’s Affiliates from integrating SpeechMagic within their general medical application products.

12. Exclusion Of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 8 OF THIS AGREEMENT, PSP MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, WHATSOEVER, AS TO THE PRODUCTS AND THE DOCUMENTATION. PSP EXPRESSLY DISCLAIMS, ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSES, ACCURACY, SATISFACTORY QUALITY, NON-INFRINGEMENT, COURSE OF DEALING, OR COURSE OF PERFORMANCE.

13. Limited Liability. IN NO EVENT WILL EITHER PARTY OR ANY OF ITS AFFILIATES, SUBSIDIARIES, OR LICENSORS BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, CONSEQUENTIAL, MULTIPLIED, ENHANCED, OR PUNITIVE DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE, PROFITS, OR GOODWILL, BUSINESS INTERRUPTION, OR LOST IN CONNECTION WITH THIS AGREEMENT OR THE PRODUCT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY, OR OTHERWISE, EVEN IF SUCH PARTY, ITS AFFILIATES, ITS SUBSIDIARIES, OR ITS LICENSORS HAVE BEEN ADVISED OF


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THE POSSIBILITY OF SUCH DAMAGES AND EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS DEEMED TO HAVE FAILED ITS ESSENTIAL PURPOSE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THIS LIMITATION MAY NOT APPLY IN THOSE JURISDICTIONS. IF ANY CLAIM IS MADE AGAINST A PARTY, INCLUDING WITHOUT LIMITATION CLAIMS AS A RESULT OF THE SUBSTANTIAL NONCONFORMANCE OF THE SOFTWARE TO THE DOCUMENTATION OR OTHERWISE, THE PARTY’S TOTAL LIABILITY FOR DAMAGES WILL BE LIMITED, IN THE AGGREGATE, TO ITS ACTUAL DIRECT DAMAGES, AND IN ANY EVENT WILL NOT EXCEED THE TOTAL OF ALL AMOUNTS MEDQUIST IS OBLIGATED TO PAY PSP UNDER THIS AGREEMENT. SOME JURISDICTIONS MAY NOT ALLOW LIMITATIONS OF LIABILITY FOR CERTAIN TYPES OF DAMAGE OR CERTAIN CLAIMS, SO SUCH LIMITATION MAY NOT APPLY IN SUCH JURISDICTION.

14. Intellectual Property Indemnification. PSP will indemnify, defend, and hold harmless MedQuist, and MedQuist’s directors, officers, shareholders, employees, agents, and attorneys, and MedQuist’s affiliates and their directors, officers, shareholders, partners, members, employees, agents, and attorneys, and the End Users, and the successor, and assigns of any or all of them, from all third-party Claims for infringement, misappropriation or violation of copyrights, trademarks, trade secrets, or other proprietary rights associated with any portion of the Product, or any other material delivered under this Agreement; provided that: (i) MedQuist promptly notifies PSP in writing of the Claim; (ii) PSP has sole control of the defense and all related settlement negotiations with respect to the Claim; provided however, that MedQuist has the right, but not the obligation, to participate in the defense of any such Claim through counsel of its own choosing (at MedQuist’s sole expense), which right will not detract from PSP’s sole right to control such defense; and (iii) MedQuist cooperates fully to the extent reasonably necessary, and executes all documents reasonably necessary for the defense of such Claim. “Claim” will mean all loss, losses, liabilities, damage, damages, claims, taxes, and all related costs and expenses; including, without limitation, reasonable attorneys’ fees and costs of investigation, litigation, settlement, judgment, interest, and penalties. If MedQuist provides PSP with notice of a Claim, MedQuist may withhold any further payments due to PSP pursuant to this Agreement, and deposit the same in an interest-bearing escrow account with a commercial bank. On the resolution of any claim, the amounts in escrow, including accrued interest thereon, will be distributed to PSP after deductions of amounts PSP is required to pay MedQuist under this Section 14. If MedQuist’s or its End Users’ use of any portion of the Product or any other material delivered under this Agreement is enjoined in an action by reason of a Claim of infringement, violation or misappropriation of any third party’s patents, copyrights, trademarks, trade secrets or other proprietary rights, or PSP reasonably believes that it will be so enjoined, then PSP will, at its sole option and expense, in addition to its other obligations in this Section 14: (i) procure for MedQuist and its End Users the right to continue using the Product or any portion thereof; (ii) replace the same with software of equivalent functions and efficiency that is not subject to an action described in this section; or (iii) modify the applicable Software so that there is no longer any infringement or breach, provided that such modification does not adversely affect the functional capabilities of the Product as set out in this Agreement. If neither (i), (ii), or (iii) may be accomplished despite PSP’s reasonably diligent efforts, MedQuist may terminate this Agreement with regard to the portion of the Product that is alleged to infringe, violate, or misappropriate a third party’s rights, and MedQuist shall, during the Term of this Agreement, be entitled to a pro-rata refund of the total of all amounts MedQuist has paid and is obligated to pay PSP under clauses 4.1 and 4.4 of this Agreement after the Amended and Restated Agreement Effective Date, with respect to such portion. PSP will have no liability respecting any claim of infringement or breach as aforesaid to the extent such claim is based on the combination, operation, or use of the Software with other equipment, software, apparatus, devices, or things not supplied by PSP or in a manner not substantially consistent with PSP’s specifications and instructions.


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Notwithstanding anything to the contrary provided in this Agreement, PSP shall not be liable for and the obligations of PSP in this Section will not apply to the extent of the use of the Product other than in accordance with its specifications or normal intended use; or any Claim based on or related to any modification or adaptation of the Product by any person other than PSP unless made on PSP’s behalf.

In no event shall PSP’s liability under this Section 14 exceed, in the aggregate, the total of all amounts MedQuist has paid and is obligated to pay PSP under this Agreement.

This Section 14 states the entire liability of PSP for any type of infringement or breach whatsoever of Intellectual Property Rights of third parties related to the manufacture, sale, operation, or use of the Product.

15. Product Co-Ownership. Upon the execution and delivery of this Amended and Restated Agreement, PSP and MedQuist shall jointly own all right title and interest in and to the Products (including object and Source Code for the SpeechQ for Radiology application and the SpeechQ for Radiology Integration SDK, but excluding the SpeechMagic engine and SpeechMagic SDK which MedQuist separately licenses) and the Intellectual Property Rights therein and all derivatives, modifications, enhancements, corrections, additions, and extensions to the Products (and Source Code) provided by PSP hereunder (including but not limited to the beta version of version 1.2 “Lite” Software and the commercial version of SpeechQ for Radiology version 1.2 “Lite”), without any right or duty of accounting to or consulting with the other party (excluding the obligations of Section 4.2 during the Term) and in relation to which each party shall, and does hereby, assign and convey to the other all rights, titles and interests necessary to give full effect to such joint ownership. Each party shall, and does hereby, assign and convey to the other all rights, titles and interests necessary to give full effect to such joint ownership of the Products (including Source Code); PSP covenants and agrees that PSP has all of the right, title and interest to the Products necessary to effectuate the foregoing and no further transfer or assignments from any other PSP Affiliate or any third party are necessary to effectuate the foregoing. Upon the request of MedQuist, PSP shall take such further actions, at MedQuist’s expense, as may be reasonably appropriate or necessary to confirm such rights. PSP represents, warrants and covenants that: (i) it has and will have the full and sufficient right to assign and grant the rights granted to MedQuist pursuant to this Agreement free and clear of any liens, claims or encumbrances and (ii) to PSP’s knowledge, none of the Products at the Amended and Restated Agreement Effective Date, infringes any Intellectual Property Rights of any third party, nor has any claim of such infringement been threatened or asserted. The sole remedy for MedQuist for any breach of the warranty in subsection (ii) of the preceding sentence is set forth in clause 14 of this Agreement. PSP agrees MedQuist may make further derivatives, modifications, enhancements, corrections, additions, and extensions to the Products (“MedQuist Modifications”) and that MedQuist will be the sole and exclusive owner of the MedQuist Modifications without a duty to disclose or provide such to PSP, and PSP agrees to do nothing inconsistent with such ownership by MedQuist and nothing herein grants any license to such MedQuist Modifications to PSP. MedQuist agrees that PSP may make further derivatives, modifications, enhancements, corrections, additions, and extensions to the Products separate and apart from the development, maintenance and other PSP services provided hereunder (“PSP Modifications”) and that PSP will be the sole and exclusive owner of the PSP Modifications without a duty to disclose or provide such to MedQuist, and MedQuist agrees to do nothing inconsistent with such ownership by PSP and nothing herein grants any license to such PSP Modifications to MedQuist; provided that the foregoing shall not relieve PSP of any of its development, maintenance and other PSP service obligations hereunder. The provisions of this Section shall survive the termination or expiration of this Agreement.


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16. Legal Compliance.

16.1 Neither party may download or otherwise export or re-export the Software or any underlying information or technology except in full compliance with all United States and other applicable laws and regulations. In particular, but without limitation, none of the Software or underlying information or technology may be downloaded or otherwise exported or re-exported: (i) into (or to a national or resident of) Cuba, Iran, Iraq, Libya, North Korea, Syria, or Sudan (as such list is updated by the US Government from time to time); or (ii) to anyone on the U.S. Treasury Department’s list of Specially Designated Nationals or the U.S. Commerce Department’s Table of Deny Orders.

16.2 In accordance with the Federal Center for Devices and Radiological Health regulations, in order to permit tracing in the event of recall, each party will retain distribution records for the Products for a period of five (5) years from the date of termination or expiration of this Agreement.

16.3 Each party is aware of and will advise its End Users to comply with Section 112B(b) of the Social Security Act (42 U.S.C. 1320a-7b) (the “Act”) when seeking reimbursement from any governmental entity for products supplied under this Agreement. Specifically, each party acknowledges that the Act may require proper disclosure of any discounts, rebates, credits, reimbursements, and other programs PSP or MedQuist provide in connection with delivery of the Products.

16.4 Neither party will ship, transfer, or export any of the Products, or any derivative thereof, directly or indirectly, into any country except as permitted by the U.S. Export Administration Act and the regulations thereunder, or use any of the Products for any purpose prohibited by the U.S. Export Administration Act.

17. Intellectual Property Rights.

17.1 With respect to the co-owned Products, in the event that either MedQuist or PSP, or both, wish to pursue a patent in any Product technology or any component thereof provided hereunder, they shall cooperate with each other in preparing and submitting one or more patent applications. Where the Parties agree to, and do, share equally in the cost of prosecuting these patent applications in any Product technology or any component thereof provided hereunder, the Parties shall jointly own any resulting patent without any right or duty of accounting to or consulting with the other party. Where the Parties agree that one of them shall pay more than half of the cost of prosecuting the patent application, and it does so, that Party shall own the patent and shall grant to the other party, absent any other written agreement between the Parties, a non exclusive, perpetual, transferable, worldwide, irrevocable, royalty-free, fully paid-up license to use, copy, modify and prepare derivative works of the patent (including, without limitation, the right to make, have made, use, import, offer for sale and sell or otherwise provide or dispose of products and services using or incorporating the same) or to practice any process in connection therewith, with the right to sublicense the same.

17.2 The Parties shall cooperate with each other and execute such other documents as may be necessary and appropriate to achieve the objectives of this Section and Section 15. Each of the joint owners of the Products shall have the right to assign its rights and interest in any jointly owned Product (including the Intellectual Property Rights therein) to an Affiliate or to an acquirer of (or a part of) the joint owner’s business, as part of a bona fide and solvent divestiture carried out at arm’s length basis, to which the jointly owned Product is relevant. For purposes of this Agreement, the terms


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joint ownership and co-ownership are used interchangeably to mean joint ownership by PSP and MedQuist.

17.3 In no event shall either party be precluded from independently developing for itself, or for others, anything, whether in tangible or non-tangible form, which is competitive with, or similar to, the co-owned Products. In addition, both parties shall be free to use its general knowledge, skills and experience, and any ideas, concepts, know-how, and techniques that are acquired or used in the course of providing or receiving the co-owned Products hereunder.

17.4 PSP grants MedQuist a limited, nonexclusive right to use PSP’s trademarks and trade names (the “Marks”) in connection with the advertising, marketing and sale of the Products. To the extent necessary in connection with the foregoing, PSP shall cause its applicable Affiliates to grant similar rights to MedQuist as set forth in this Section with respect to any Marks used by PSP but held in the name of any such Affiliates. MedQuist will not use PSP’s trade names or abbreviations (with the exception of a logo or xxxx or graphic design PSP provides which indicates MedQuist is an authorized value-added reseller of PSP) in MedQuist’s corporate title or name, or in any manner that may result in confusion as to separate and distinct identities of PSP and MedQuist. MedQuist agrees that it has no right, title, or interest in or to the Marks except the limited right of use set forth in this Agreement. MedQuist will not use any Xxxx in any way except as PSP may authorize. MedQuist will submit to PSP representative samples of all labels, advertising, promotional and marketing materials, and other items that use or bear any Xxxx for PSP’s approval prior to publication or distribution. MedQuist will use the Marks only in the forms PSP designate, will not alter or modify any Xxxx, and will include an appropriate trademark notice ^® or ^TMwith each use of any

Xxxx. On expiration or termination of this Agreement, the license granted under this Section 17.4 will automatically terminate and MedQuist will immediately cease and desist all use of the Marks licensed under this Agreement.

17.5 MedQuist intends to market the Products described in this Agreement under the trademark “SpeechQ^TM” and certain trademarks, trade names, service marks, logotypes, and other commercial symbols related thereto (collectively, the “SpeechQ Marks”). PSP further acknowledges and agree that: (i) there is substantial and valuable goodwill in the SpeechQ Marks; (ii) as between PSP and any of its Affiliates on the one hand, and MedQuist and any of its Affiliates on the other, MedQuist owns all rights to the SpeechQ Marks and all goodwill related to them; (iii) neither PSP nor any of its Affiliates will contest MedQuist’s ownership of the SpeechQ Marks, or the validity of the SpeechQ Marks, at any time during or after the Term of this Agreement; and (iv) neither PSP nor any of its Affiliates will misappropriate the SpeechQ Marks, infringe on MedQuist’s rights in the SpeechQ Marks, or use the SpeechQ Marks without MedQuist’s prior written consent, at any time during or after the Term of this Agreement.

17.6 Any advertising, publicity, release or other disclosure of information concerning this Agreement should be released only after receiving a prior written approval by both parties except as required by law.

17.7 Neither Party, unless approved by both Parties in writing, is allowed to link, combine or otherwise use the co-owned Products with any open source software, if such linkage, combination or use would create a risk, or have the “viral” effect, of requiring the disclosure or licensure of the co-owned Products as open source under the GNU General Public License or under the terms of any other comparable viral open source license. In the event an action is performed resulting in the co-owned Products being licensed under the GNU General Public License or under the terms of any other


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comparable viral open source license without approval by both Parties, the Party causing this action shall indemnify the other Party against and hold the other Party harmless from any and all damages and/or costs arising from or in connection with any breach of the provisions of this Section 17.7 and shall reimburse any and all costs and expenses incurred by the other Party in defending any claim, demand, suit or proceeding arising from or in connection with such breach. The indemnification in this Section is not subject to the limitations set forth in Sections 13 or 14 of this Agreement.

18. Confidential Information. Each party to this Agreement has imparted and may from time to time impart to the other certain confidential information related to the performance of this Agreement, and the Products or the marketing or support thereof (including specifications therefor), and each party may otherwise obtain confidential information concerning the business and affairs of the other pursuant to this Agreement. Each party hereby agrees that it will use such confidential information solely for the purposes of this Agreement and that it will not disclose, whether directly or indirectly, to any third party such information other than as required to carry out the purposes of this Agreement. In the event of and prior to such disclosure, the disclosing party will obtain from such third parties duly binding agreements to maintain in confidence the information to be disclosed to the same extent at least as such party is so bound hereunder. The foregoing provision will not prevent the disclosure or use by a party of any information which is or hereafter, through no fault of such party, becomes public knowledge or to the extent permitted by law, provided that each party has a reasonable opportunity to prevent or limit such disclosure. MedQuist will return to PSP all confidential information received pursuant to this Agreement or otherwise in its possession or control on termination of this Agreement, or forthwith on the request of PSP.

19. Remedies on Breach. Each party acknowledges that the unauthorized use or disclosure of any confidential information will cause irreparable harm to the other for which damages will be an inadequate remedy, and the each party hereby agrees that, in additional to all other remedies available to it at law and in equity, it will have the right to obtain injunctive relief.

20. Termination.

20.1 Either party may terminate this Agreement on written notice to the other if any of the
following events occur:

20.1.1 If any proceeding in bankruptcy, receivership, liquidation or insolvency is commenced against the other party or its property, and the same is not dismissed within ninety (90) days; or

20.1.2 If the other party makes any assignment for the benefit of its creditors, becomes insolvent, commits any act of bankruptcy, ceases to do business as a going concern, or seeks any arrangement or compromise with its creditors under any statute or otherwise.

20.2 PSP may terminate this Agreement on written notice to MedQuist if any of the following
events occur:

20.2.1 In the event that a material breach by MedQuist remains uncured for more than thirty (30) days following PSP’s delivery of written notice to MedQuist specifying the nature of the breach; or

20.2.2. [Intentionally Omitted]


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20.3 MedQuist may terminate this Agreement on written notice to PSP in the event that a material breach by PSP remains uncured for more than thirty (30) days following MedQuist’s delivery of written notice to PSP specifying the nature of the breach.

21. Obligations On Termination. On the expiration or termination of this Agreement:

21.1 PSP will be under no obligation to refund to MedQuist any licensing fees paid pursuant to this Agreement so long as PSP has fulfilled all of its obligations under this Agreement related to such licensing fees; including, without limitation, delivery of the Software license and fulfilling the warranty obligations for such Software license;

21.2 Subject to Section 4.3.5., PSP will continue to perform its support obligations to MedQuist for the duration of all service agreements between MedQuist and the End Users entered into before such expiration or termination (but, in accordance with Section 4.3.5, in no event beyond ******* unless otherwise separately agreed by PSP and MedQuist), where support fees have been paid to PSP;

21.3 Any End User licenses granted before the expiration or termination of this Agreement will continue to survive after the effective date of termination provided that MedQuist has paid all amounts owing hereunder; and

21.4 The following provisions shall survive termination or expiration of this Agreement: 1, 2.1 and 2.2 (including the Territorial restrictions therein), 2.3, 6.3, 12, 13, 14, 15, 17, 18, 19, 20, 21 and 22.

22. Miscellaneous.

22.1 Force Majeure. The term “Force Majeure” will be defined as an act of God; severe weather conditions; strikes; war, terror or other violence; law or proclamation, demand, or requirement of any governmental agency; or any other similar act or condition whatsoever, beyond the reasonable control of the parties to this Agreement. If the performance of this Agreement by either party or any obligation under this Agreement is prevented, restricted, or interfered with by reason of a Force Majeure event, the party whose performance is so affected, on giving prompt notice to the other party, will be excused from such performance to the extent of such Force Majeure event; provided, however, that the party so affected will take all reasonable steps to avoid or remove such causes of nonperformance and will continue performance under this Agreement with dispatch whenever such causes are removed.

22.2 Relationship of MedQuist to PSP. Neither party is an agent, employee, fiduciary, partner, or representative of the other, and has no authority or power to bind or contract in the name of or to create any liability against the other in any way or for any purpose. It is understood that MedQuist is an independent contractor with rights confirmed by this Agreement to market, distribute, and support the Product on its own accord and responsibility in the Territory.

22.3 Waiver. Failure or neglect by either party to enforce at any time any of the provisions of this Agreement will not be construed nor will be deemed to be a waiver of either party’s rights under this Agreement nor in any way affect the validity of the whole or any part of this Agreement nor prejudice either party’s rights to take subsequent action.

22.4 Agreement. This Agreement, including the Schedules attached to this Agreement, states the completed agreement between the parties concerning this subject and supersedes earlier


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oral and written communications between the parties concerning this subject. No addition, amendment to, or modification of this Agreement will be effective unless it is in writing and signed by both parties. This Agreement takes precedence over and supersedes any previous agreements between the parties regarding the subject matter hereof, even if such agreements are still in effect as of the Original Effective Date hereof.

22.5 Assignment. This Agreement is personal to the Parties, and therefore, it may not be assigned by either Party whether voluntarily or involuntarily or by operation of law, in whole or in part, to any party without the prior written consent of the other Party, which consent will not be unreasonably withheld. No such assignment by either Party, howsoever occurring, will relieve the Parties of their obligations under this Agreement. Notwithstanding the foregoing, either Party may assign this Agreement without consent: (a) if this Party undergoes a change of control, whether by means of a sale or issuance of shares or otherwise; (b) to any of its Affiliates or (c) to any purchaser of substantially all of the assets or the business of this respective Party.

If MedQuist becomes an Affiliate – directly or indirectly – of a direct competitor of PSP via a transaction involving MedQuist, PSP may, at its sole discretion, decide to prematurely terminate its maintenance and support obligations under Section 4.3 and the distribution rights of MedQuist in the Non exclusive Territory of this agreement by giving MedQuist a 12 months written notice period; provided that in no event shall such termination operate to relieve PSP of its development services obligations hereunder.

If PSP becomes an Affiliate – directly or indirectly – of a direct competitor of MedQuist via a transaction involving PSP, Medquist may, at its sole discretion, decide to prematurely terminate the maintenance and support obligations under Sections 4.3 of this agreement by giving PSP a 12 months written notice period; provided that in no event shall such termination operate to relieve PSP of its development services obligations hereunder.


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22.6 Notices. Any notice required or permitted under the terms of this Agreement or required by Law will, unless otherwise provided, be in writing and will he delivered in person, sent by registered mail or air mail as appropriate, properly posted and fully prepaid, in an envelope properly addressed; or sent by next-day delivery via a courier that has the ability to track deliveries and confirm receipts to the respective parties, as follows:


To PSP:		Philips Speech Recognition Systems GmbH
		Attn: Marcel Wassinc
		Xxxxxxxx Xxxxxxx 00
		0000 Xxxxxx, Xxxxxxx

To MedQuist:		MedQuist Inc.
		000 Xxxxxxx Xxxx Xxxx. #000
		Xxxxx Xxxxxx, XX 00000

		Attn: Chief Legal Officer

with a simultaneous copy, which will not constitute notice, to:

		Xxxxx Xxxxx, Esq.
		Xxxxxxxx Ingersoll & Rooney PC
		One Oxford Centre
		000 Xxxxx Xxxxxx, 00xx Xxxxx
		Xxxxxxxxxx, XX 00000-0000
		Fax: 000-000-0000

or to such other address as may from time to time be designated by written notice hereunder. Any such notice will be in the English language and will be considered to have been given at the time when actually delivered if delivered by hand, on the next business day following sending by courier or in any other event within seven (7) days after it was mailed in the manner provided in this Section 22.6.

22.7 Headings. The headings of the sections of this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

22.8 Severability. In the event that any or any part of the terms, conditions, or provisions contained in this Agreement arc determined by any competent authority to be invalid, unlawful, or unenforceable to any extent, such term, condition, or provision will to that extent be severed from the remaining terms, conditions, and provisions, which will continue to be valid and enforceable to the fullest extent permitted by law.

22.9 Governing Law. The parties hereby agree that this Agreement will be governed by and construed and interpreted in accordance with the laws of the State of New York and the laws of the United States applicable in the State of New York, The parties agree that the U.N. Convention on Contracts for the International Sale of Goods does not apply to this Agreement.

22.10 Dispute Resolution.

22.10.1 All disputes arising under this Agreement will be settled, if possible, by good faith negotiation of the parties, which negotiations will not terminate until the President of MedQuist and the President of PSP have considered the dispute.


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22.10.2 If such negotiations fail to resolve any dispute within thirty (30) days after a party has given written notice of the dispute to the other party or parties, then such dispute will be resolved, if possible, by a process of mediation agreed on by the parties (acting reasonably), which mediation will be conducted by a mediator agreed on by the parties (acting reasonably). Such mediator will be an individual with significant experience in and understanding of the software industry. Such mediation will be held within 30 days after cessation of negotiations as described in Section 22.10,1 of this Agreement.

22,10.3 If the dispute has not been settled within ten (10) days of the commencement of the mediation described in Section 22.10.2 of this Agreement, then the dispute will be finally settled by arbitration and this Agreement specifically excludes the power of the Court to refuse to stay judicial proceedings. The arbitration will take place in, New York, New York unless otherwise agreed. Within twenty (20) days after the party requesting arbitration has given written notice of such request to the other party, the parties (acting reasonably) will jointly appoint a single arbitrator who will be an individual (other than the mediator selected pursuant to Section 22.10.2 of this Agreement, with significant experience in and understanding of the software industry. If the parties are unable to appoint a single arbitrator within the such twenty (20) day period, then MedQuist will appoint one arbitrator and PSP will appoint one arbitrator, both such arbitrators to be appointed within ten (10) days after the end of the aforementioned twenty (20) day period, with a third arbitrator then being selected by those two arbitrators (none of these three being the mediator selected pursuant to Section 22.10.2 within five (5) days following their appointment. Such third arbitrator will alone conduct the arbitration. The arbitration will be final and binding and not subject to appeal and the procedures and substance of the arbitration will be governed by the U.S. Federal Arbitration Act. The arbitrator may, in addition to any other remedies, grant injunctive relief. The non-prevailing party will pay all costs of the arbitration,

22.11 No Damages for Termination or Expiration. PSP WILL NOT BE LIABLE TO MEDQUIST FOR DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO INCIDENTAL OR CONSEQUENTIAL DAMAGES, SOLELY ON ACCOUNT OF PSP’S TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. MEDQUIST WAIVES ANY RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION (OTHER THAN IN THE CASE OF A TERMINATION OF THIS AGREEMENT BY MEDQUIST FOR CAUSE UNDER SECTION 20.3 OF THIS AGREEMENT) OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS UNDER THE LAW OF ANY TERRITORY, STATE, OR OTHERWISE. PSP will not be liable to MedQuist on account of termination (other than in the case of termination of this Agreement by MedQuist for cause under Section 20.3 of this Agreement) or expiration of this Agreement in accordance with its terms for reimbursement or damages for the loss of goodwill, prospective profits, or anticipated income, or on account of any expenditures, investments, or commitments made by MedQuist, or for any other reason whatsoever, based on or growing out of such expectation or termination.

22.12 Authority. Each of the parties hereby represents that it has full power and authority to enter into and perform its respective obligations under this Agreement, and does not know of any contracts, agreements, promises, or undertaking, that would prevent the full performance and compliance with this Agreement.

[SIGNATURES CONTAINED ON FOLLOWING PAGE]


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IN WITNESS WHEREOF, the parties have duly executed and delivered this Amended and Restated Agreement as of the Amended and Restated Agreement Effective Date.


MEDQUIST INC.				PHILIPS SPEECH RECOGNITION SYSTEMS GMBH

By:				By:


Name:				Name:


Title:				Title:


Date:				Date:


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SCHEDULE A

TERRITORY’

Description of Territory:

MedQuist’s exclusive Territory shall be all that area within North America.

“North America” shall specifically include, without limitation: (i) the United States of America; (ii) the Dominion of Canada; (iii) those islands in the Caribbean Basin beginning with Bermuda to the north and extending to Grenada and Barbados in the south, as the borders of such countries are configured as of the Effective Date of this Agreement.

The United States of America shall expressly include: (i) the following dependent areas of the United States of America: American Samoa, Xxxxx Island, Guam, Xxxxxxx Island, Xxxxxx Island, Xxxxxxxx Atoll, Kingman Reef, the Midway Islands, Navassa Island, the Northern Mariana Islands, Palmyra Atoll, Puerto Rico, the U.S. Virgin Islands, and Wake Island; (ii) those areas leased by the United States from separate sovereign nations, including without limitation Guantanamo Bay, Cuba;

The Dominion of Canada shall expressly include Hans Island, in the Xxxxxxx Channel between Ellesmere Island and Greenland, which area is subject to a border dispute between the Dominion of Canada and the Kingdom of Denmark.

MedQuist’s non-exclusive Territory shall be all that area of Australia and the United Kingdom.

“Australia” shall specifically include, without limitation (i) the Australian continent; (ii) the major island of Tasmania; (iii) the Australian controlled islands in the Southern, Indian and Pacific Oceans; and (iv) New Zealand (including the North Island and the South Island and the other islands controlled by New Zealand, most notably Xxxxxxx Island/Rakiura and the Chatham Islands).

“United Kingdom” shall specifically include, without limitation: (i) the United Kingdom of Great Britain and Northern Ireland (including England, Northern Ireland, Scotland and Wales); (ii) The Crown Dependencies of the Channel Islands and the Isle of Man; and (iii) the British Overseas Territories.


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SCHEDULE A-1

STATEMENT OF WORK (SOW)

*******


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SCHEDULE B

PRODUCTS

Description of Products:

The Products that are the subject of this Agreement shall include, without limitation:

	1.		“SpeechQ for Radiology”, together with its components; front-end Integration SDK, SpeechLink, and future versions thereof which could be used in specialties outside of radiology.

	2.		The Products shall specifically exclude software development kit (“SDK”) products that PSP develops, currently known as Speech SDK, SpeechMagic, SpeechMagic SDK, and SpeechMagic InterActive SDK and future versions thereof.


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SCHEDULE B-1

HOURLY PRICES FOR SPEECHQ 1.2 LITE DEVELOPMENT


Price per hour for PSRS Development resources:		*******

Price per hour for Multisoft development resources:		*******

The hourly rates above include

	•		personnel-related expenses, i.e. compensation and traveling.

	•		a ******* allocation for infrastructure i.e. R&D’s share of office rent, IT expenses, and (shared) services (including back office, such as HR).

The Multisoft tariff has been based on actual invoices from Multisoft plus the same infrastructure allocation as above, as they are engineers partly located in our premises and using Philips IT equipment and infrastructure.

In addition, there is a fiscal uplift of ******* added to the hourly rate as a percentage that Philips require Philips Austria to apply to services provided to other Philips parties.


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SCHEDULE C

PRICING

Pricing may be adjusted from time to time based upon the mutual agreement of the need for such a change by both MedQuist and Philips Speech Processing.

The license fee for the Software (the “License Fee”) shall be as follows:

Table 1


	Item	License Fee
1.1	Server	*******
1.2	Link	*******
1.3	Report Station Workstation Client*	*******
1.4	Report Station Concurrent License*	*******
1.5	Report Station Concurrent Transcription License*	*******
1.6	Report Station Concurrent Dictation License*	*******
1.7	Test Server Package	*******


*		For every transcription user or workstation, a Report Station needs to be purchased.

For end-customers who have no SMA contracts, PSP and MedQuist will agree on a case by case basis on a recommended end-user upgrade price for patches and point releases, and PSP will get ******* of that price.

On ******* Table 1 will be amended to reflect the following change:

Licenses in rows 1.3 and 1.4 will be replaced by a Concurrent SpeechMagic SDK Runtime License. The License Fee will be ******* of the MSRP (as of the Amended and Restated Effective Date, the current MSRP is *******). The MSRP is subject to change upon notification by PSP to MedQuist; provided that, notwithstanding such changes to the MSRP from time to time, such Concurrent SpeechMagic SDK Runtime License Fee shall in no event exceed *******.


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C-1

SCHEDULE D

[Intentionally Omitted]


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D-1

SCHEDULE E

THIRD PARTY SOFTWARE

*******


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E-1

END USER LICENSE AGREEMENT

END USER LICENSE AGREEMENT for MEDQUIST ‘Branded’ SOFTWARE

THIS END USER LICENSE AGREEMENT (“XXXX”) is between MEDQUIST, Inc. (“MEDQUIST”), having a business address of 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000, and CUSTOMER.

DEFINITIONS

	a)		“Software” shall mean separate MedQuist ‘branded’ computer programs, (whether or not included within or separately from any data processing unit), provided now or later by MedQuist, its parent, subsidiaries, or affiliates and not otherwise so provided under a separate license agreement, which can be read and used directly by a machine or device, and shall include without limitation, data, instructions, and media. “Non-branded Software” shall mean Software bearing a trademark other than MedQuist’s.

	b)		“Documentation” shall mean the separate MedQuist ‘branded’ operator, user, or installation instruction sets, provided now or later, and in whatever form, by MedQuist, its parent, subsidiaries, or affiliates and not otherwise provided under a separate license agreement. “Non-branded Documentation” shall mean Documentation bearing a trademark other than MedQuist’s.

LICENSE OF RIGHTS.

	a)		Customer is granted a non-exclusive, non-assignable, non-transferable, permanent, revocable license of rights to use and display each of the Software and Documentation, whether separately or combined, with others of the Software or Documentation, only in data processors which are in Customer’s exclusive possession and designated by Customer for such use in its internal business, with such Software or Documentation, or such combined Software or Documentation.

	b)		Customer is granted a non-exclusive, non-assignable, non-transferable, permanent, revocable license of rights to use the Documentation only in direct connection with such Software or Documentation use and display, internally in its own business.

3.		Customer acknowledges that the Software and Documentation, including without limitation all ideas, procedures, processes, systems, methods of operation, concepts, principles, discoveries, and inventions, are the exclusive property of MedQuist or its licensors and acknowledges their exclusive rights to the application, manufacture, development, use, display, reproduction, modification, and the transfer of the Software and Documentation and to all worldwide patent and copyright rights to and in the Software or Documentation. Customer shall not prepare a derivative work or a compilation from such Software or Documentation, or modify, combine, or copy the Software or Documentation in any manner, including without limitation decompiling or disassembling the Software or Documentation to any third party, in whole or part, in any form or in any manner, unless expressly permitted in writing by MedQuist. The sole exception allowed is the copying of the Software or Documentation when loading the Software or Documentation within the internal memory of Customer’s data processor, and when an essential step in the utilization of the Software or Documentation in conjunction with such data processor. No other manner of copying is permitted. Customer shall reproduce and include all copyright notices provided with the Software or Documentation on all copies, compilations, or derivative works of the Software or Documentation produced by the Customer, as may be authorized under this Paragraph 3.

4.		Customer acknowledges the proprietary rights in the trademarks shown on the Software and Documentation delivered to the Customer, and Customer shall deal with and treat such trademarks according to applicable trademark law.

5.		Customer shall limit access to the Software or Documentation to its authorized employees. Customer shall advise such employees of the terms of this XXXX and shall take all necessary steps to ensure compliance with the XXXX terms, by such employees.

6.		Customer shall defend, indemnify, and hold MedQuist harmless from any and all claims, actions, losses, damages, (including reasonable legal fees), obligations, liabilities, and liens (including, without limitation, any of the foregoing arising out of or imposed in connection with latent or other defects, or under the doctrine of “strict liability”), arising out of the purchase, lease, possession, operation, condition, return, or use of the Software or Documentation, or by operation of law, excluding, however, any of the foregoing resulting solely and directly from the acts of MedQuist.

7.		This XXXX is not assignable by Customer unless permitted in writing by MedQuist and any attempt at assignment without such permission shall be void. This XXXX is assignable in whole or part by MedQuist without consent of Customer. Customer agrees to execute all documents and consents requested by MedQuist to complete any assignment by MedQuist.

8.		Customer agrees to keep the Software and Documentation at the location(s) of its designated data processors, as set forth in Paragraph 2 above. Customer agrees to return the Software or Documentation delivered by MedQuist under this XXXX immediately upon Customer relinquishing possession of any of said data processors, except to the extent that the Software or Documentation has been transferred to replacement data processors possessed by Customer or to third parties in accordance with Paragraph 7 above.

9.		MedQuist warrants that it has and conveys good title to the Software. MedQuist warrants that the Software will perform to the specifications identified within the user Documentation current at the time of Software sale. Documentation and media containing Software or Documentation are provided “AS IS” without warranty of any kind, either expressed or implied. MedQuist does not warrant that the functions contained in the Software or Documentation will meet Customer’s requirements or that the operation of the Software or Documentation will be uninterrupted or error free. Should the Documentation prove defective, Customer alone assumes the entire cost of all necessary correction.

10.		MedQuist’s warranty of Software shall be void and of no effect if: (a) the Software is not properly stored, installed, or maintained in accordance with MedQuist’s recommendations or standard industry practice; (b) the Software is not operated under normal conditions and in accordance with MedQuist’s recommendations or standard industry practice; (c) the defect has arisen from damages occurring to the Software subsequent to MedQuist’s delivery or is related to the use of unauthorized hardware or software; or (d) failure of the Software due to (i) inadequate electrical power, air-conditioning, or humidity-control, (ii) accident or disaster, including without limitation, fire, flood, water, wind, and lightning, (iii) neglect, including without limitation, power transients, abuse or misuse, and failure of the Customer to follow MedQuist’s published operating instructions, (iv) unauthorized modification or repair of Software by persons other than authorized representatives of MedQuist, or (v) use of the Software for purposes other than those for which designed.

11.		MedQuist’s warranty of Software does not include (a) performing services connected with relocation of Software or adding or removing interfaces, accessories, attachments or other devices, (b) repair of damage due to other than normal wear, (c) electrical work external to the Software, (d) any maintenance of interfaces, accessories, attachments, or other devices not furnished by MedQuist, or (e) any issues resulting from an unsupported service.

12.		THE WARRANTY MADE BY MEDQUIST HEREIN, IS EXCLUSIVE AND IS MADE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, AND IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTY ARISING OUT OF ANY COURSE OF DEALING, CUSTOM, OR USAGE OF TRADE. IN NO EVENT, SHALL MEDQUIST BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGE.S OR ECONOMIC LOSS UNDER ANY LEGAL THEORY ASSERTED, EVEN IF MEDQUIST HAS BEEN ADVISED OF THE POSSIBILITY THEREOF.

13.		ALL NON-BRANDED SOFTWARE AND NON-BRANDED DOCUMENTATION ARE PROVIDED HEREUNDER ON AN “AS IS” BASIS. NON-MEDQUIST MANUFACTURERS OR SUPPLIERS MAY PROVIDE WARRANTIES FOR THEIR SOFTWARE OR DOCUMENTATION AND ALL WARRANTY QUESTIONS OR PROBLEMS WITH RESPECT TO SUCH SOFTWARE OR DOCUMENTATION SHOULD BE ADDRESSED DIRECTLY TO SUCH NON-MEDQUIST MANUFACTURER OR SUPPLIER. CUSTOMER EXPRESSLY ASSUMES ALL LIABILITY FOR ALL AND ANY LOSSES, DAMAGES, AND COSTS (INCLUDING COURT COSTS AND LEGAL FEES) IN CONNECTION WITH, OR RELATED TO, SUCH NON-BRANDED SOFTWARE OR NON-BRANDED DOCUMENTATION. THE ENTIRE RISK AS TO THE QUALITY OR PERFORMANCE OF SUCH NON-BRANDED SOFTWARE OR NON-BRANDED DOCUMENTATION IS WITH CUSTOMER.


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14.

LIMITATION OF REMEDY

	a)		If any Software is found to be defective within the warranty period, MedQuist’s only obligation, and Customer’s exclusive and sole remedy, as MedQuist may choose in MedQuist’s sole best judgment, shall be either (a) the repair or replacement of such defective Software by MedQuist, or (b) the return of such defective Software to MedQuist and a refund to Customer of its license fee. Customer acknowledges and agrees that MedQuist’s right to refund Customer’s license fee shall not be diminished or restricted in any way or for any reason. The provision of such remedy shall be conditioned upon notification, and substantiation as may be required by MedQuist, that such Software has been stored, installed, maintained, and operated in accordance with MedQuist’s recommendations or standard industry practice. Unless otherwise directed by MedQuist, all such defective Software shall be returned to MedQuist’s warehouse, or to such other location as MedQuist shall select, all at MedQuist’s expense.

	b)		Except for MedQuist’s obligations set out in Section 14 (a) above, MedQuist shall have no obligation, liability, or responsibility to Customer or any other party with respect to any claim or cause of action arising in connection with, or related to, this XXXX, whether legal or equitable, including, without limitation, any claim or cause of action in contract or in tort (whether in negligence or in strict liability)..Customer acknowledges and agrees MedQuist’s total obligation and liability for any such claim or cause of action shall be limited to an amount in the aggregate which shall not exceed the total price paid by Customer for the specific Software or Documentation which are the subject matter of and directly related to such claim or cause of action. Customer expressly assumes all liability for all and any losses, damages, and costs (including court costs and legal fees) in excess of such amount. No claim or causes of action, regardless of form, may be brought more than one (1) year after such claim or cause of action arises.

	c)		The purpose of the above stated remedy is to correct any defects or to refund the license fee paid. Customer acknowledges and agrees that such exclusive remedy is an essential term in the bargain represented by this XXXX and that such remedy shall, in view of the consideration paid to MedQuist, operate as a full satisfaction to Customer for any and all claims related thereto. In further view of the foregoing, Customer acknowledges and agrees that in the event a court of competent jurisdiction or an arbitration panel rules this exclusive remedy does not give the Customer the benefit of its bargain or that such exclusive remedy fails for any reason, then any such ruling with regard to such exclusive remedy or any such failure of such exclusive remedy, shall not effect or modify in any way, any limitation or exclusion of warranties, and all such limitations and exclusions shall continue in full force and effect.

15.		This Agreement shall be governed by the laws of the state listed in Customer’s address on the Final Terms of Sale referenced by the Product Sales Agreement within which this XXXX is incorporated. Any term or condition prohibited by law shall, to the extent prohibited, be ineffective without affecting the other terms and conditions.

16.		All parties acknowledge and agree that in entering into this transaction, they have not relied upon any representations regarding this XXXX, other than those explicitly set forth herein. Further, the parties expressly admit that any term or condition which is, or may be asserted, as material by any party and which is not expressly stated in this XXXX, shall not be part of this XXXX and shall not be binding on any parties hereto. Each party waives all defenses, with regard to any such asserted material, term, or conditions not expressly stated within this XXXX.

17.		If either party to this XXXX is temporarily unable to perform its obligations because of causes reasonably beyond its control, then no liability to the other party or right to terminate shall exist for failure of that party to perform during such period.

18.		MedQuist’s failure to insist on strict performance of this XXXX or to enforce a default upon the occurrence of any single, repeated, or continuing violation of any particular term or condition hereof, shall not be considered a waiver of MedQuist’s right to insist on strict performance of this XXXX or to enforce a default with respect to the violation of any other term or condition or, at any later time or upon any subsequent occurrence, with respect to that particular term or condition.

No waiver, change, or amendment of any term or condition of this XXXX is effective against MedQuist unless made in writing and signed by an authorized official of MedQuist.


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AMENDED AND RESTATED OEM SUPPLY AGREEMENT

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