exv10w7



 





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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-3-









 




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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-6-









 







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 mark 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 Mark 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 Mark 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 Mark, and will include an appropriate trademark notice ® or TM
with each use of any


Mark. 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
“SpeechQTM” 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
	 

	 	Triester Strasse 64
	 

	 	1101 Vienna, Austria
	 
	 	 
	To MedQuist:

	 	MedQuist Inc.
	 

	 	100 Bishops Gate Blvd. #300
	 

	 	Mount Laurel, NJ 08054
	 
	 	 
	 

	 	Attn: Chief Legal Officer
	 
	 	 
	with a simultaneous copy, which will not constitute notice, to:
	 
	 	 
	 

	 	David Gould, Esq.
	 

	 	Buchanan Ingersoll & Rooney PC
	 

	 	One Oxford Centre
	 

	 	301 Grant Street, 20th Floor
	 

	 	Pittsburgh, PA 15219-1410
	 

	 	Fax: 412-562-1041





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, Baker Island, Guam, Howland
Island, Jarvis Island, Johnston 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 Kennedy 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 Stewart 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 (“EULA”) is between MEDQUIST, Inc. (“MEDQUIST”), having a business
address of 5430 Metric Place, Suite 200, Norcross, Georgia 30092, and CUSTOMER.





	1.	 	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.






	2.	 	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 EULA and shall take all necessary
steps to ensure compliance with the EULA 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 EULA is not assignable by Customer unless permitted in writing by MedQuist and any
attempt at assignment without such permission shall be void. This EULA 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 EULA 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 EULA, 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 EULA 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 EULA 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 EULA, 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 EULA, shall not
be part of this EULA 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 EULA.
	 
	17.	 	If either party to this EULA 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 EULA 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 EULA 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 EULA is effective against MedQuist
unless made in writing and signed by an authorized official of MedQuist.





 




			
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-2-