2of security measures to protect EPHI and to manage the conduct of CBay’s workforce in relation tothe production of that information as defined in 45 CFR §164.304.     (b) “Affiliate” shall mean any individual or entity directly or indirectlycontrolling, controlled by or under common control with, a party to this Agreement. Forpurposes of this Agreement, (i) the direct or indirect ownership of over fifty percent (50%)of the outstanding voting securities of an entity, or the right to receive over fiftypercent (50%) of the profits or earnings of an entity, or (ii) the power to direct or causethe direction of the management or policies of a Person, whether through the ownership ofvoting securities, by contract or otherwise, shall be deemed to constitute control. Forpurposes of this definition, S.A.C. Private Capital Group, LLC shall not be deemed to be anAffiliate of CBay or the Company.     (c) “Client Ready Services” shall mean Transcription Services for which theThreshold QA Volume shall be 0%.     (d) “Confidential Information” shall mean all non-public information of aconfidential or proprietary nature (whether or not specifically labeled or identified as“confidential”), in any form or medium, that relates to the business, products, financialcondition, services or research or development of either of the parties under this Agreementand each of its Affiliates, suppliers, distributors, customers, independent contractors orother business relations, including all trade secrets, know-how, compilations of data andanalyses, techniques, systems, formulae, recipes, research, records, reports, manuals,documentation, models, data and data bases relating thereto; inventions, innovations,improvements, developments, methods, designs, analyses, drawings, reports and all similar orrelated information.     (e) “Contribution Margin” shall mean Revenues less the sum of Direct ProductionCosts and Indirect Production Costs.     (f) “Contribution Ratio” shall mean 20% of Revenues.     (g) “Dictation” shall mean the audio dictated by a physician and recorded ondigital media as a computer digital audio file for conversion from voice into text or data.     (h) “Direct Production Costs” shall mean the sum of (i) direct personnel costs(*i.e.*, wages, bonuses, fringe benefits and other employee related costs) for employeesdirectly involved in the provision of Transcription Services to MedQuist pursuant to thisAgreement (*i.e.*, transcriptionists and first level quality assurance personnel), (ii)production related telecommunication costs and other direct production expenses (*i.e.*, thirdparty production fees, royalty or license fees and other expenses incurred directly as aresult of Transcription Services related production activities on behalf of MedQuistpursuant to this Agreement), and (iii) any costs incurred by CBay under Section 3.4(e). Forpurposes hereof, Direct Production Costs shall mean solely those costs included in thegeneral ledger accounts listed on Schedule H hereto. ******* - Material has been omitted and filed separately with the Commission.

 

3     (i) “Effective Date” shall mean the date this Agreement is executed by theparties below following approval by the respective boards of directors (or any committee ofthe board charged with such approval) of the parties.     (j) “EPHI” shall mean Electronic Protected Health Information as that term isdefined by 45 CFR §164.513.     (k) “HIPAA” shall mean the Health Insurance Portability and Accountability Actof 1996.     (l) “Hospital” shall mean a hospital, clinic or other institution that providesinpatient or outpatient medical, surgical, or psychiatric care and treatment for the sick orthe injured which either (i) has inpatient beds or (ii) is directly related to or connectedto a hospital, clinic or other institution that has inpatient beds.     (m) “Implementation Period” shall mean the 60 day period beginning the firstday that CBay transcribes or edits a live dictated report of a new client or new client worktype.     (n) “Indirect Production Costs” shall mean the total of all allocations ofIndirect Production Costs for each production facility and support function involved in theprovision of Transcription Services to MedQuist. The allocation of said costs shall bedetermined for each facility in India at which transcription services are performed by CBayfor MedQuist by multiplying (i) the sum of (x) indirect personnel costs (*i.e.*, wages,bonuses, fringe benefits and other employee related costs) for employees indirectly involvedin the provision of Transcription Services to MedQuist pursuant to this Agreement (*i.e.*,second level quality assurance, supervisory, management and other production relatedpersonnel) at such facility, and (y) other indirect production expenses (*i.e.*, rentalexpenses, utility expenses, customer penalties and other expenses incurred indirectly as aresult of and related to the provision of Transcription Services to MedQuist pursuant tothis Agreement) at such facility by (ii) a ratio, the numerator of which is the Volume ofTranscription Services performed for MedQuist hereunder at such facility and the denominatorof which is CBay’s total volume of Transcription Services performed at such facility. Theallocation of Indirect Production Costs other than those at the production facility shall bebased upon a ratio of the Volume of Transcription Services performed for MedQuist hereunderto the total volume of all Transcription Services (or such other volume as may beappropriate for that specific support function). For purposes hereof, Indirect ProductionCosts shall mean solely those costs expended in India and included in the general ledgeraccounts listed on Schedule H hereto.     (o) “Laws” shall mean all applicable federal, municipal, state, local orforeign statutes or laws, and shall be deemed also to refer to all rules and regulationspromulgated thereunder, by any applicable regulatory authority or otherwise, unless contextrequires otherwise. Any reference to a particular law or regulation will be interpreted toinclude any revision of or successor to such statute, law, rule or regulation regardless ofhow it is numbered or classified. ******* - Material has been omitted and filed separately with the Commission.

 

4     (p) “Line” shall mean*******     (q) “MedQuist Audit Committee” shall mean the Audit Committee of the Board ofDirectors of MedQuist Inc.     (r) “New Customer” shall mean a customer or prospective customer that is not aCurrent Customer.     (s) “Non-Client Ready Services” shall mean Transcription Services for which theThreshold QA Volume is *******.     (t) “PHI” shall mean Protected Health Information as defined in 45 CFR§164.501.     (u) “Physician Practice” shall mean a medical practice comprised of one or morephysicians organized to provide patient care services, but which practice is not part of aHospital.     (v) “Profit Sharing Amount” shall mean the excess of the Contribution Marginover the Contribution Ratio.     (w) “Revenue Cycle Management” shall mean the activities of Mirrus Systems, AMSPlus, and other operations responsible for billing, coding, or collections.     (x) “Revenues” shall mean the gross revenues received by CBay from MedQuist forthe provision of Transcription Services hereunder.     (y) “Rupee Exchange Rate” shall mean the number of Indian Rupees that can bepurchased for one U.S. Dollar, as reported by The Wall Street Journal on the date inquestion.     (z) “Technical Safeguards” shall mean the technology and the policy andprocedures for its use that protect EPHI and control access to it as defined in 45 CFR§164.304.     (aa) “Term” shall mean the period of time commencing on the Effective Date andending on the Expiration Date.     (bb) “Transcript” shall mean the document or computer file resulting from theconversion of Dictation into text or data. ******* - Material has been omitted and filed separately with the Commission.

 

5     (cc) “Transcription Services” shall mean the transcription and/or editingservices that result in the conversion of physician Dictation into Transcript.     (dd) “Volume” shall mean the volume of Transcription Services provided toMedQuist hereunder.**ARTICLE II****COORDINATED SALES AND MARKETING EFFORTS**     2.1 CBay Discontinues Certain Marketing Efforts. From and after the Effective Dateuntil the Expiration Date, except as otherwise agreed upon in writing by MedQuist (followingapproval by the MedQuist Audit Committee) and CBay on a case-by-case basis, CBay will cease any NewCustomer sales efforts for Transcription Services to Hospitals in North America. For the avoidanceof doubt, the limitation in the previous sentence will not restrict CBay from the followingactivities:     (a) Current Customer Relationships with Hospitals. Maintaining, developing andgrowing its relationships with current Hospital customers set forth on Schedule A (the“Current Customers Schedule”), including their Affiliates and existing, new, orsubsequently acquired facilities of such persons (collectively, “Current Customers”)and servicing and providing additional work types/services for such Current Customers,including the Company’s products and services set forth on Schedule B (the “CurrentProducts and Services Schedule”).     (b) Other Market Segments. Prospecting for New Customers in any other marketsegment, including, but not limited to, the Physician Practice market segment.     (c) Other Product/Service Categories. Selling any product/service, other thanTranscription Services, to any Hospital, including but not limited to, Revenue CycleManagement products/services.     (d) Current Pipeline. Servicing and continuing its sales efforts to theHospitals actively being pursued as of the date of this Agreement (“Current PipelineCustomers”), set forth on Schedule C (the “Current Pipeline CustomersSchedule”), for twelve (12) months after the Effective Date. Unless the partiesmutually agree to extend this twelve (12) month period (which agreement in the case ofMedQuist will require the approval of the MedQuist Audit Committee), CBay will discontinueits sales efforts to any Hospitals that have not become customers as of twelve (12) monthsafter the Effective Date.     2.2 Marketing of Transcription Services. During the Term of this Agreement, theCompany will use its commercially reasonable efforts to sell and market Transcription Services toHospitals in North America other than Current Customers and Current Pipeline Customers. WithCBay’s express written consent, the Company may sell and market Transcription Services to anyCurrent Customer, Current Pipeline Customer or facilities acquired by either Current ******* - Material has been omitted and filed separately with the Commission.

 

6Customers or Current Pipeline Customers. CBay will provide the Company with such marketingassistance, technical information and other cooperation as is reasonably requested by the Companyin connection with its marketing efforts.     2.3 General Exceptions. Notwithstanding anything contained in this Agreement, neitherCBay nor MedQuist or their Affiliates shall be prohibited or restricted from acquiring, holding orinvesting in, directly or indirectly through any of its Affiliates, securities of an entity engagedin any business after the Effective Date, including the medical transcription business, theHospital sector, and/or the Physician Practice market. The provisions of this Agreement will applyto any entity acquired after the Effective Date of this Agreement, unless the parties mutuallyagree otherwise (which agreement in the case of MedQuist will require the approval of the MedQuistAudit Committee).     2.4 Group Purchasing Order Contracts. During the Term of this Agreement, CBay willcooperate with the Company to transfer, to the fullest extent permissible, the rights and benefitsunder CBay’s Group Purchasing Order (“GPO”) contracts set forth on Schedule D (the “GPOContracts Schedule”) to the Company in order to allow MedQuist to market its products andservices solely to New Customers that are Hospitals covered by such GPO contracts. If any such GPOcontract cannot be transferred, CBay shall provide or cause to be provided all commerciallyreasonable assistance to the Company (not including the payment of any consideration) reasonablyrequested by the Company to secure any lawful and commercially reasonable arrangement reasonablyproposed by the Company under which the Company shall obtain (without infringing upon the legalrights of any third party) the economic claims, rights and benefits under such GPO contract andshall assume any related economic burden with respect to such GPO contract. If any such GPOcontract cannot be transferred, and CBay cannot facilitate MedQuist’s beneficial use of any suchGPO contract pursuant to the previous sentence, then CBay shall contract for sales under such GPOcontract and engage the Company to provide Transcription Services thereunder pursuant to theSubcontracting Agreement.**ARTICLE III****OFFSHORE TRANSCRIPTION SERVICES**     3.1 Termination of the TSA. The TSA is hereby terminated and superseded in itsentirety by this Agreement, other than with respect to the payment of any fees or penalties forservices provided under the TSA through the date of termination and Section 5.5 and Article VIIIthereof, which provisions shall survive such termination and not be superseded solely with respectto services provided under the TSA through the date of termination.     3.2 Exclusive Vendor Relationship. As of the Effective Date, until the Agreement isterminated or this provision ceases to be applicable in accordance with Sections 5.5 or 7.5 hereof,CBay shall be the Company’s exclusive provider of Indian or Asian Transcription Services, except asotherwise agreed upon in writing by MedQuist and CBay on a case-by-case basis, MedQuist will ceaseto directly or indirectly (except through CBay) purchase Indian or Asian Transcription Servicesfrom any person or entity other than CBay or perform Indian or Asian Transcription Services itselfexcept pursuant to the Company’s International Labor Partner (“MQ ILP”) Vendor Contractsfor Indian or Asian Transcription Services set forth on Schedule E ******* - Material has been omitted and filed separately with the Commission.

 

7(“ILP Contracts”) prior to their assignment to CBay pursuant to Section 3.3. CBayshall provide the Indian or Asian Transcription Services at substantially the same level of qualityas CBay provides similar services to its other clients, but in no event less than the standardscustomary in the industry.     3.3 MedQuist’s Current International Labor Partner Vendor Contracts. As of theEffective Date the Company will take commercially reasonable measures to obtain consent, ifrequired, for the assignment of the ILP Contracts from each MQ ILP. The Company will assign toCBay, and CBay will assume, each of the Company’s ILP Contracts in order to allow CBay to performinitially the necessary Indian or Asian Transcription Services for the Company promptly followingits receipt of the consent of the MQ ILP party to such ILP Contract of such assignment. Forpurposes of clarity, following such assignment, CBay shall be solely responsible to MedQuist forthe performance of all Indian and Asian Transcription Services and all other obligations under suchILP Contract and such services shall be deemed to be performed by or on behalf of CBay. Followingthe assignment of an ILP Contract, CBay shall have the right to amend, modify, terminate andreplace ILP Contracts and vendors in its discretion, and MedQuist will not be entitled to anydiscounts, rebates, reductions in price or penalties under the ILP Contracts (except to the extentset forth in Section 3.4(h)). If any ILP does not consent to the assignment of its ILP Contract,the Company shall provide or cause to be provided all commercially reasonable assistance to CBay(not including the payment of any consideration) reasonably requested by CBay to secure suchconsent or cooperate with CBay (at CBay’s expense for any out-of pocket expenses) in any lawful andcommercially reasonable arrangement reasonably proposed by CBay under which CBay shall obtain(without infringing upon the legal rights of any third party) the economic claims, rights andbenefits under such ILP contract and shall assume any related economic burden with respect to suchILP contract.     3.4 Pricing; Profit Sharing.     (a) ILP Contracts. With respect to any ILP Contract that is assigned to CBay,following such assignment, for Non-Client Ready Services performed under such ILP Contracts,CBay will bill the Company, and the Company agrees to pay CBay, the amount required to bepaid for services under the ILP Contract at the rates in effect as of the Effective Date asset forth in Schedule E, regardless of the date of actual transfer of the ILP Contract orthe date CBay begins or ceases to provide services under such contract (the “ILPContract Rate”). For Client Ready Services performed under such ILP Contracts, CBaywill bill the Company, and the Company agrees to pay CBay, the ILP Contract Rate plus*******. Upon termination of an ILP Contract in accordance with its terms, CBaywill be paid the Services Fee under clause (b).     (b) Services Fee. For Indian or Asian Transcription Services provided by CBayother than through the ILP Contracts assigned to CBay, CBay will be paid at the rates setforth in Schedule F (the “Services Fee Schedule”) (subject to changes for currencyfluctuation as described below) (the “Services Fee”). Notwithstanding anythingherein to the contrary, in no event shall the Services Fee net of impact of amounts receivedby the Company pursuant to the Profit Sharing pursuant to Section 3.4(i) be greater than thefee charged by CBay to any other customer to whom it is providing substantially similarTranscription Services. ******* - Material has been omitted and filed separately with the Commission.

 

8          (i) Invoicing. An invoice for Service Fees will be generated by CBay twiceeach month and payment is due within thirty (30) calendar days after the Company’s receiptof the invoice and any other contractual reporting obligations of CBay due during theapplicable billing period.     (c) Currency Fluctuation. If the average Rupee Exchange Rate during any threemonth period following the Effective Date (such rate, the “Adjusted Rupee ExchangeRate”) is 5% higher or lower than the average Rupee Exchange Rate during the twelve (12)month period immediately preceding the Effective Date (such rate, the “Baseline RupeeExchange Rate”), the prices charged by CBay for its Indian or Asian TranscriptionServices under this Agreement shall be adjusted upwards or downwards, as the case may be, bya factor equivalent to the ratio of the Baseline Rupee Exchange Rate to the Adjusted RupeeExchange Rate. The most recent date on which such a modification occurs shall be deemed the“Exchange Rate Price Modification Date.” Once the prices have been modifiedpursuant to this paragraph, the first sentence of this paragraph shall be applied byreplacing the words “Effective Date” with the words “Exchange Rate Price Modification Date”and adjustments may be made thereafter as set forth above.     (d) Additional Costs. If the Company requests a material change in the scopeof the Transcription Services provided by CBay (including without limitation accelerated TATtimes (2 hours instead of 12 hours) or significantly more nighttime work), and CBay informsthe Company that such changes would increase CBay’s production costs over the costs thatwould be incurred if there were no material change in the scope of Transcription Servicesprovided by CBay, then, in any such case, the expected additional costs, as specified in anew increased cost per line rate, shall have to be identified and agreed to by the Companybefore CBay begins performance of the Transcription Services incorporating the requestedchanges. If the Company agrees to the additional production costs resulting from thechanges requested by the Company, as specified in a new increased cost per line rate, theCompany shall thereafter pay CBay the increased per line rate. If the Company does notagree to the additional production costs resulting from the changes requested by theCompany, as reflected in a specified increased cost per line rate, CBay will not perform therequested changes and the per line rate will remain constant. The parties shall work ingood faith to minimize the amount of any cost increases resulting from material changes inthe scope of the Transcription Services requested by the Company.     (e) CBay assumes all Taxes, Duties, Delivery and Installation Fees. CBayassumes responsibility for all excise, sales, use and similar taxes, export or import dutiesand shipment, and delivery or installation fees.     (f) Uncollected Services Fee. To the extent the Company cannot pay, or causeto be paid, the Services Fee for any reason, including by reason of any prohibition on suchpayment pursuant to any applicable law or the terms of any debt financing of the Company orits subsidiaries, the payment by the Company or any of its subsidiaries to CBay of theServices Fee will be payable immediately on the earlier of (i) the first date on which thepayment of such deferred Services Fee is no longer prohibited by law or ******* - Material has been omitted and filed separately with the Commission.

 

9under any contract applicable to the Company and the Company is otherwise able to makesuch payment or cause such payment to be made, and (ii) total or partial liquidation,dissolution or winding up of the Company. Notwithstanding anything to the contrary herein,under any applicable law or under any contract applicable to the Company or itssubsidiaries, any forbearance of collection of the Services Fee by CBay shall not be deemedto be a subordination of such payments to any other person, entity or creditor of theCompany or its subsidiaries. Any installment of the Services Fee not paid on the scheduleddue date will bear interest at an annual rate of six percent (6%), compounded quarterly,from the date due until paid.     (g) Disputed Services Fee. In the event that any invoiced amount is disputedby the Company, the Company shall deliver written notice of such disputed amount to CBaywithin thirty (30) calendar days after the date the invoice is due. Upon receipt of writtennotice of a billing dispute, CBay and Company shall promptly exchange any backup or otherinformation reasonably necessary to support the correctness of any disputed amount. Theparties shall thereafter have thirty (30) calendar days (“Invoice Review Period”) inwhich to examine such information, and to the extent such information substantiates payment,reductions or credits in the applicable invoice, such will be applied promptly. Thereafter,if CBay and the Company are unable to reach an agreement as to any remaining disputedamount, CBay and the Company shall immediately enter into good faith negotiations to resolveany remaining dispute, provided that in the case of MedQuist any resolution shall requirethe approval of the MedQuist Audit Committee. In the event the parties are unable to resolvesuch dispute within fifteen (15) calendar days after the end of the Invoice Review Period,the dispute shall be settled pursuant to the provisions of Section 11.12 of this Agreement.     (h) Penalties. The Company shall receive from CBay reimbursement for anyactual penalties paid (whether in cash or by credit against future services) by the Companyto its customers for Transcription Services performed either directly or indirectly (throughan ILP Contract) by CBay which due to CBay’s action or inaction fail to meet the QualityAssurance or Turnaround Time performance requirements (as those terms are defined in theunderlying contracts with the Company’s customers) under the contracts with such customers.     (i) On a monthly basis, the Company shall submit to CBay any and all invoices,if any, for penalties paid by the Company to a customer due to CBay’s action orinaction as explained above.     (ii) CBay shall have 20 days to object to the Company’s conclusion that CBay’saction or inaction caused the Company to incur a penalty to its customer. If CBayobjects, the parties will discuss the objection and try to resolve any disagreementin good faith (provided that in the case of MedQuist any resolution shall requirethe approval of the MedQuist Audit Committee), failing which the matter shall besubmitted to binding arbitration in accordance with Section 11.12. If CBay does notobject or the objection is resolved, then within 10 days thereafter CBay shall payto the Company an amount in cash equal to the sum of the penalties paid by theCustomer and submitted as invoices to CBay ******* - Material has been omitted and filed separately with the Commission.

 

10under paragraph (i) above; provided that if CBay does not object to the fullamount of the penalty, then CBay shall within 10 days of receipt of the invoice payto the Company an amount in cash equal to the portion of the penalties as to whichCBay is not objecting. Any penalties not paid on the due date set forth in thisparagraph (ii) will bear interest at an annual rate of six percent (6%), compoundedquarterly, from the date due until paid.     (i) Profit Sharing. The Company shall be entitled to 50% of CBay’s ProfitSharing Amount (the “Company’s Share”) in each Fiscal Year of CBay. Within 60 daysafter the close of each Fiscal Year of CBay, the calculation of the Company’s Share will bereviewed as part of the annual audit and CBay shall prepare and submit to the Company acertificate, signed by CBay’s chief financial officer, specifying in reasonable detail therelevant calculation of the Revenues, Direct Production Costs, Indirect Production Costs andProfit Sharing Amount related to CBay’s Indian or Asian Transcription Services performed forthe Company; and the results of its operations and cash flow for the relevant transactions,together with payment of the Company’s Share as set forth in the certificate. The Companyshall have 21 days to object to the calculation set forth in the certificate. If theCompany objects, the parties will discuss the objection and try to resolve any disagreementin good faith (which resolution in the case of MedQuist will require the approval of theMedQuist Audit Committee), failing which the matter shall be submitted to bindingarbitration in accordance with Section 11.12. If the Company has objected to thecalculation, then within 10 days following resolution of the objection, CBay shall pay tothe Company (or the Company shall pay to CBay, as the case may be) an amount in cash equalto the difference, if any, between the Company’s Share as finally resolved and the Company’sShare as set forth in the certificate and previously paid.     (i) Example. By way of example only, if CBay earns $10 million inRevenue from Transcription Services sold to the Company, and $3 million inContribution Margin on such services, the Company would be entitled to a payment of$500,000 according to the following calculations. Contribution Margin in excess ofthe Contribution Ratio would equal $3 million less $2 million (20% ContributionRatio on $10 million in Transcription Services Revenues), or $1 million of which50%, or $500,000, would be paid to the Company.     3.5 Excess Quality Assurance Expense. The Company shall have the right to charge, andCBay shall pay, an amount equal to the Excess Quality Assurance Expense as explained in Schedule F.     3.6 Books of Account. Appropriate records and books of account of CBay’s transactionswith, and the provision of services to, the Company under this Agreement shall be maintained byCBay in accordance with GAAP consistently applied. Such records and books of account shall at alltimes be maintained at such place of business of CBay as shall have been notified to the Company.The books of account and the records of CBay shall be audited as of the end of each Fiscal Year byits independent auditors. All such records shall be maintained during the Term of this Agreement,or such longer period as may be required by relevant Law. ******* - Material has been omitted and filed separately with the Commission.

 

11     3.7 Inspection Rights of the Company. The Company, and any accountants, attorneys,financial advisers and other representatives of the Company, may, from time to time at theCompany’s sole expense, visit and inspect the properties of CBay, examine (and make copies andextracts of) CBay’s books, records and documents solely for purposes of confirming the calculationof Revenues, Direct Production Costs, Indirect Production Costs, Contribution Margin, the ProfitSharing Amount and the Company’s Share related to the Indian or Asian Transcription Servicesprovided by CBay to the Company under this Agreement, and may discuss those transactions with itsofficers, employees and independent accountants, all at such reasonable times as the Company mayrequest on reasonable notice.     3.8 Other Information. Upon the reasonable request of the Company, CBay shall, to theextent reasonably practicable without interfering unduly with the ongoing operation and managementof CBay’s business and without imposing any significant expense or cost on CBay, prepare andfurnish, or cause to be prepared and furnished, to the Company, as soon as practicable followingsuch request, any additional financial or operating information or reports as are so reasonablyrequested by the Company, related to determining Revenues, Direct Production Costs, IndirectProduction Costs, Contribution Margin, the Profit Sharing Amount and the Company’s Share.**ARTICLE IV****REPRESENTATIONS, WARRANTIES AND COVENANTS**     4.1 CBay represents and warrants that it is fully authorized to enter into this Agreement andthat its entry into this Agreement does not violate any contractual obligation it owes to a thirdparty.     4.2 CBay shall provide any operational, technical, production and quality assurance support toreasonably meet the sales and operations requirements of the Company. However, should any suchrequest on the part of the Company require travel by individuals or entities who assist CBay infulfilling its obligations under this Agreement from their home station, the Company shall beresponsible for all such travel, lodging and related expenses of these individuals or entities tothe extent such expenses are submitted and approved by the Company prior to the expense beingincurred by CBay.     4.3 The Company and CBay agree that they shall designate operational, sales, andadministrative personnel as points of contact, and each party shall maintain appropriate levels ofcommunication as required to fulfill their obligations under this Agreement.     4.4 CBay represents and warrants that no individuals or entities shall assist CBay infulfilling CBay’s obligations and duties under this Agreement unless those individuals or entities:(a) are employees of CBay, its Affiliates and other entities (“Covered Entities”) set forthin Schedule G attached hereto, as modified pursuant to the mutual written consent of MedQuist andCBay (the “Covered Entities Schedule”), or employees of Covered Entities; (b) if locatedoutside of the United States, perform all services in connection with this Agreement in a securesite and shall not at any time perform Transcription Services remotely or outside of CBay’spremises or the Covered Entities’ premises designated for performance of Transcription ******* - Material has been omitted and filed separately with the Commission.

 

12Services; (c) will in all cases have executed and as such present to the Company upon theCompany’s reasonable request such business agreements, HIPAA confidentiality agreements, employeeverifications and other similar documentation as may be required by the Company; and (d) performall services pursuant to this Agreement in full compliance with the terms of the Company’s“International Labor Vendor Standards and Safeguards for HIPAA Compliance” (as more fully definedand expressly limited in Section 5.5 herein) and any written modifications of such presented toCBay during the Term of this Agreement. CBay further represents and warrants that it shall notsubcontract or assign any Transcription Services, duties or obligations under this Agreement in theabsence of the prior written authorization from the Company.**ARTICLE V****HIPAA COMPLIANCE**     5.1 CBay, for itself and on behalf of the Covered Entities, will:     (a) Not use or further disclose any PHI other than as permitted or required by thisAgreement or as required by law;     (b) Report to the Company’s Corporate Director of Information Privacy and Security anyuse or disclosure of the PHI not provided for by this Agreement within forty-eight (48)hours of becoming aware of the unauthorized use or disclosure;     (c) Have procedures in place for mitigating, to the maximum extent practicable, anydeleterious effects from the use or disclosure of PHI in a manner contrary to thisAgreement;     (d) Ensure that any individuals or entities who assist CBay in fulfilling itsobligations under this Agreement agree, in writing, to substantially the same restrictionsand conditions that apply to CBay with respect to such PHI. CBay shall obtain reasonableassurances from any such individuals or entities that: (i) the information being disclosedwill be held confidentially and used or further disclosed only as required by law, (ii) theindividuals or entities will use the appropriate Administrative and Technical Safeguards toprevent the unauthorized use or disclosure of the PHI and EPHI; and (iii) the individuals orentities will immediately notify CBay of any instance of a breach of any of the PHI termsset forth herein;     (e) Ensure that all individuals and entities who assist CBay in fulfilling itsobligations under the Agreement are or shall be appropriately informed of the terms of thisAgreement and are under a legal obligation, by contract or otherwise, sufficient to enableeach individual and entity to fully comply with all provisions of this Agreement. CBay willensure that all individuals and entities who assist CBay in fulfilling its obligations underthis Agreement are educated on the Company’s privacy and security policies (as furtherdefined in Section 5.5 herein) and that sanctions are imposed for non-compliance with thosepolicies and procedures. CBay will also ensure that all individuals and entities who assistCBay in fulfilling its obligations under the Agreement have signed Protected HealthInformation Confidentiality Agreements; ******* - Material has been omitted and filed separately with the Commission.

 

13     (f) Make available to the Company such information as the Company may require tofulfill the Company’s obligations to provide access to, provide a copy of, and account fordisclosures with respect to PHI pursuant to HIPAA and the HIPAA Regulations, including, butnot limited to, 45 CFR §164.524 and §164.528;     (g) Make the Company’s PHI available as the Company may require to fulfill theCompany’s obligations to amend PHI pursuant to HIPAA and the HIPAA Regulations, includingbut not limited to 45 CFR §164.526. CBay shall, as directed by the Company, incorporate anyamendments to the Company’s PHI into copies of such PHI maintained by CBay;     (h) Make available the information required to provide an accounting of disclosures inaccordance with 45 CFR §164.528;     (i) Make its internal practices, books, and records relating to the use and disclosureof PHI received from, or created or received by CBay on behalf of, the Company available tothe Secretary of the U.S. Department of Health and Human Services for purposes ofdetermining the Company’s or a Company customer’s compliance with HIPAA;     (j) Upon termination or expiration of the Agreement, or any time during the Term ofthis Agreement, with respect to PHI that CBay maintains in any form, recorded on any mediumor stored in any storage system, including PHI retained or stored by individuals andentities who assist CBay in fulfilling its obligations under the Agreement, at the Company’sdirection and if feasible, return to the Company or destroy all such PHI. A senior officerof CBay shall certify in writing to the Company, within thirty (30) days after terminationor other expiration of the Agreement, that all PHI has been returned or disposed of asprovided above and that CBay no longer retains any such Protected Health Information in anyform;     (k) If return or destruction of PHI is infeasible, notify the Company in writing withinthirty (30) days after termination or other expiration of the Agreement. Such notificationshall include: (i) a statement that CBay has determined that it is infeasible to return ordestroy the PHI in its possession; and (ii) the specific reasons for such determination. Inaddition to providing such notification, CBay shall certify within such thirty (30) dayperiod that it will, and will require individuals and entities who assist CBay in fulfillingits obligations under the Agreement to, extend any and all protections, limitations andrestrictions contained in this Agreement to any PHI retained after termination of theAgreement and to limit any further uses and/or disclosures to those purposes that make thereturn or destruction of the PHI infeasible;     (l) Implement Administrative and Technical Safeguards that reasonably and appropriatelyprotect the confidentiality, integrity and availability of EPHI that CBay creates, receives,maintains or transmits on behalf of the Company; ******* - Material has been omitted and filed separately with the Commission.

 

14     (m) Report to the Company’s Director of Information Privacy and Security within fortyeight (48) hours any “security incident” of which it becomes aware, as such term is definedin the HIPAA Security Rule;     (n) Ensure that any individuals and entities who assist CBay in fulfilling itsobligations under the Agreement to whom CBay provides EPHI agree in writing, to implementreasonable and appropriate safeguards to protect EPHI as required herein; and     (o) Upon request, provide to the Company a list of names of any individuals or entitiesused to outsource the Company’s transcription and evidence of written assurances from thoseindividuals or entities (as required in 5.1 (d)) that they will agree to substantially thesame restrictions and conditions that apply to CBay with respect to such PHI.     5.2 CBay, in its capacity as Business Associate (as that term is defined in the HIPAARegulations) to the Company, shall be permitted to use and disclose PHI in a manner that would notviolate the requirements of the HIPAA Regulations as follows: (a) for the proper management andadministration of CBay; (b) to carry out the legal responsibilities of CBay and to fulfill CBay’sduties and responsibilities under this Agreement including in part disclosure to individuals andentities who assist CBay in fulfilling its obligations under the Agreement; and (c) to provide dataaggregation services relating to the health care operations of the Company.     5.3 CBay acknowledges that the Company is not conveying any right or title in the PHI to CBay.     5.4 Notwithstanding anything to the contrary set forth herein, CBay shall indemnify, defendand hold harmless the Company and any of the Company’s directors, officers, employees and agentsfrom and against any claim, liability, or expense (including reasonable attorneys’ fees), arisingout of or relating to any non-permitted use or disclosure of PHI or EPHI or other breach of thisArticle V by CBay or any individuals and entities who assist CBay in fulfilling CBay’s obligationsunder the Agreement.     5.5 Following the execution of this Agreement, CBay shall at all times comply in all materialrespects with the terms of the Company’s International Labor Vendor Standard and Safeguards forHIPAA Compliance and any written modifications of such presented to CBay during the Term of thisAgreement (the “Company HIPAA Compliance Standards”). The Company shall give CBay five (5)business days to consider and accept any modifications to the Company HIPAA Compliance Standards,and if CBay does not object to such modifications within the aforementioned time period, then suchmodifications shall be considered accepted by CBay and incorporated by reference. To the extentthat CBay objects to any modification of the Company HIPAA Compliance Standards, the parties willdiscuss in good faith the negotiation of mutually acceptable terms. However, should the parties notbe able to reach agreement of the modifications within ten (10) days, the Company shall have theright to, at its option, (i) submit such disagreement to binding arbitration in accordance withSection 11.12, or (ii) terminate this Agreement. Subject to the provisions of Section 7.6, suchtermination shall be effective immediately or at such other date as specified in the notice oftermination. The Company HIPAA Compliance Standards shall be hereby incorporated by reference intothis Agreement ******* - Material has been omitted and filed separately with the Commission.

 

15and the most current version has been supplied by the Company along with the fully executedAgreement. The Company shall be permitted at any time, at the Company’s sole cost and expense,reasonable access to and the ability to examine all information, in any form, which is necessary orappropriate (as determined by the Company in its sole discretion) to review CBay’s compliance withthe Company HIPAA Compliance Standards (an “HIPAA Audit”). In the event that the Company inits sole discretion determines as a result of an HIPAA Audit that CBay is not in materialcompliance with the Company HIPAA Compliance Standards (a “Negative Finding”), andnotwithstanding anything herein to the contrary, (a) CBay shall promptly pay to the Company, asliquidated damages and not as a penalty, (i) all costs and expenses associated with the HIPAAAudit, and (ii) all costs and expenses incurred by the Company in connection with any liability,loss, damage (including, without limitation, special, exemplary, punitive, consequential orincidental damages), penalty, claim or cause of action relating directly or indirectly to theNegative Finding including, without limitation, reasonable attorney’s fees; and (b) subject to theprovisions of Section 7.6, the Agreement shall be terminated effective immediately upon writtennotice from the Company to CBay and, upon such termination, CBay shall immediately return to theCompany all Confidential Information (including, without limitation, all PHI) in its possession orin the possession of any individuals and entities who assist CBay in fulfilling its obligationsunder the Agreement.**ARTICLE VI****INTELLECTUAL PROPERTY MATTERS**     6.1 Any and all designs, artwork, logos, graphics, video, text, data code and otherproprietary or confidential materials supplied by the Company to CBay in connection with thisAgreement (the “Company Content”) shall remain the sole and exclusive property of theCompany. No copyrights, patents, trademarks or other Intellectual Property rights shall betransferred from the Company to CBay with respect to any of the Company Content. However, theCompany hereby grants to CBay a worldwide, non-exclusive, unlimited fully paid-up license to use,copy, modify, enhance, create derivative works of and otherwise use the Company Content in anymanner reasonably necessary in connection with the performance of the Transcription Serviceshereunder (the “Company Content License”).     6.2 Nothing in this Agreement shall be construed to grant to CBay any right to or interest inany trademark, trade name, trade dress, service mark, copyright, patent, trade secret or know-how(“Intellectual Property”) owned or asserted to be owned by the Company. CBay’s use of theIntellectual Property shall be limited to the performance of the Transcription Services ascontemplated hereby. Any other use of the Intellectual Property shall constitute an infringementthereof and/or a violation of the Company’s rights resulting in irreparable injury to the Companyand entitling the Company to immediate injunctive relief and to any other remedies at law orequity.     6.3 Any and all designs, artwork, logos, graphics, video, text, data code and otherproprietary or confidential materials supplied by CBay to the Company in connection with thisAgreement (the “CBay Content”) shall remain the sole and exclusive property of CBay. Nocopyrights, patents, trademarks or other Intellectual Property rights shall be transferred fromCBay to the Company with respect to any of the CBay Content. However, CBay hereby grants to ******* - Material has been omitted and filed separately with the Commission.

 

16the Company a worldwide, non-exclusive, unlimited fully paid-up license to use, copy, modify,enhance, create derivative works of and otherwise use the CBay Content in any manner reasonablynecessary in connection with the performance of the Transcription Services hereunder (the “CBayContent License”).     6.4 Nothing in this Agreement shall be construed to grant to the Company any right to orinterest in any Intellectual Property owned or asserted to be owned by CBay. Any use of suchIntellectual Property shall constitute an infringement thereof and/or a violation of CBay’s rightsresulting in irreparable injury to CBay and entitling CBay to immediate injunctive relief and toany other remedies at law or equity.     6.5 Application Service Provider License.     (a) Through the use of software applications (the “Applications”) hosted on theDEP and made available by means of the Internet, CBay shall have the ability toaccess the DEP for the purpose of providing the Transcription Services described herein.Subject to the terms and conditions set forth herein, the Company hereby grants to CBay forthe Term of this Agreement a non-transferable, non-exclusive limited right of access to, anduse of, the Applications solely for the purposes of performing the Transcription Serviceshereunder. From time to time, the Company may require the agreement to and acknowledgementof an end-user license, terms and conditions and/or other agreements prior to CBay accessingthe Applications.     (b) With respect to its use of the Applications, CBay, at its own cost and expense,shall: (i) not permit any individual or entity, other than authorized individuals andentities under this Agreement, to use or gain access to the Applications; (ii) providereasonable security devices to protect against unauthorized usage; (iii) not adapt theApplications in any way or use it to create a derivative work (other than reports that aretranscribed or edited using the Applications); and (iv) not remove, obscure, hinder or alterthe Company’s (or any other third party’s) proprietary notices, trademarks, or otherproprietary rights notices affixed to or contained in the Applications.     (c) The Applications are the exclusive property of the Company and/or the Company’slicensors, which shall retain all right, title and interest in and to the Applications,including, without limitation, the Intellectual Property rights and any other rights underUnited States and international copyright, patent, trademark, trade secret or other law.CBay may not use the Applications for the benefit of any third parties or allow access tothe Applications by any third party, except as otherwise explicitly authorized hereunder.     (d) CBay has developed and may continue to develop proprietary software tools (the“Tools”) to enhance the productivity of its workforce, and/or better meet HIPAAcompliance requirements. CBay may at its sole discretion share these Tools with the Company.Should the Company use these Tools, either with or without compensation to CBay, the Companywarrants it will not share these Tools with any third party without the specific writtenpermission of CBay. ******* - Material has been omitted and filed separately with the Commission.

 

17**ARTICLE VII****TERM**     7.1 Term. This Agreement shall be effective on the Effective Date and continue untilthe fifth anniversary of the Effective Date (the “Expiration Date”), unless soonerterminated by the parties in accordance with Section 5.5 or this Article VII.     7.2 Termination for Material Breach. Either party may terminate this Agreement or theprovision of any Service if the other party materially breaches any term of this Agreementimmediately after providing written notice of termination to the other party and, in the event oftermination due to a material breach that is curable, after providing not less than 20 days to curesuch breach as specified in such notice.     7.3 Termination Upon Change of Control. In the event CBay and its Affiliates (otherthan the Company and its subsidiaries) cease to control, directly or indirectly, the power to voteat least thirty percent (30%) of the issued and outstanding common equity of the Company, theCompany or CBay may elect to terminate this Agreement.     7.4 Renewal. After the initial Term of this Agreement, the Term of this Agreementshall automatically renew for two additional five year terms, unless, not earlier than 12 monthsnor less than six months prior thereto, either party provides the other with written notice of itselection to terminate this Agreement on the next Expiration Date.     7.5 Selective Termination by Either Party. Notwithstanding the foregoing, (i) CBaymay, in its sole discretion, terminate Section 3.2 of this Agreement and allow the Company tocontract with CBay on a non-exclusive basis, and seek new providers of Indian or AsianTranscription Services, and (ii) the Company may, in its sole discretion (following approval by theMedQuist Audit Committee), terminate Section 2.1 of this Agreement and allow CBay to market to NewCustomer Hospitals.     7.6 Post-Termination Transcription Services. In the event either CBay or the Companyelects to terminate this Agreement pursuant to Sections 5.5, 7.2 or 7.3 as the case may be, or inthe event either the Company or CBay elects not to renew this Agreement pursuant to Section 7.4hereof, then CBay shall continue to perform Transcription Services hereunder for a period of up toone year to allow the Company to transition the Transcription Services being provided hereunder toother providers, and the Company shall use commercially reasonable efforts to transition suchservices as promptly as reasonably practicable.**ARTICLE VIII****INDEMNIFICATION AND INSURANCE**     8.1 Indemnification Obligations.     (a) CBay hereby indemnifies and holds the Company harmless from and against any and allliability, loss, damage, claim or cause of action, and expenses connected therewith,including, without limitation, reasonable attorney’s fees and ******* - Material has been omitted and filed separately with the Commission.

 

18expenses, to the extent such damage (i) is caused directly or indirectly by CBay, itsemployees or agents in the performance of CBay’s obligations hereunder and (ii) results incosts incurred or liability by the Company to any of its customers.     (b) The Company hereby indemnifies and holds CBay harmless from and against any and allliability, loss, damage, claim or cause of action, and expenses connected therewith,including, without limitation, reasonable attorney’s fees and expenses, to the extent suchdamage (i) is caused directly or indirectly by the Company, its employees or agents in theperformance of the Company’s obligations hereunder and (ii) results in costs incurred orliability by CBay to any of its customers (other than the Company).     8.2 Insurance. CBay represents and warrants that during the Term of this Agreement, itshall maintain the types and amounts of insurance set forth below:     (a) General liability insurance, including contractual liability coverage of all ofCBay’s obligations under this Agreement and products liability/completed operations coveragein such amounts and covering such risks and liabilities as are in accordance with normalindustry practice.     (b) Such insurance shall be evidenced by a certificate of insurance which shall providethat the Company shall receive thirty (30) days’ prior written notice of cancellation ormaterial change of such policy.**ARTICLE IX****CONFIDENTIALITY**     9.1 Confidentiality. CBay and the Company acknowledge that Confidential Information isto be considered highly confidential. Each party shall use Confidential Information disclosed to itby or on behalf of the other party only for the purposes contemplated by this Agreement and shallnot disclose such Confidential Information to any third party without the prior written consent ofthe disclosing party. The foregoing obligations shall survive the expiration or termination of thisAgreement for a period of five (5) years. These obligations shall not apply to ConfidentialInformation that:     (a) Is known by the receiving party in connection with providing services under thisAgreement at the time of its receipt, and not through a prior disclosure by the disclosingparty, as documented by business records;     (b) Is published at the time of disclosure, or thereafter becomes published orotherwise part of the public domain without breach of this Agreement by the receiving party;     (c) Is subsequently disclosed to the receiving party by a third party who has the rightto make such disclosure; ******* - Material has been omitted and filed separately with the Commission.

 

19     (d) Is developed by the receiving party independently of Confidential Information orother information received from the disclosing party and such independent development isproperly documented by the receiving party; or     (e) Is required to be disclosed by law or court order, provided that notice is promptlydelivered to the other party in order to provide an opportunity to seek a protective orderor other similar order with respect to such Confidential Information and thereafterdiscloses only the minimum information required to be disclosed in order to comply with therequest, whether or not a protective order or other similar order is obtained by the otherparty.Nothing herein shall be interpreted to prohibit the Company from publishing the results of itsstudies in accordance with industry practices.**ARTICLE X****MUTUAL COMMITMENTS**     10.1 Executive Committee Formation. Both parties commit to the formation of anExecutive Committee that is responsible for the effective coordination of the coordinated sales andmarketing efforts, offshore Transcription Services activities and for the making of any decisionsunder or related to this Agreement. The Executive Committee shall consist of equal numbers ofmembers appointed by CBay and by MedQuist, provided that the persons appointed by MedQuist shallhave no position with CBay or any of its Affiliates (other than the Company). The ExecutiveCommittee shall meet at least once a month by telephone or in person. CBay and the Company shalldeliver to the Executive Committee such financial and other information regarding the delivery ofTranscription Services hereunder as the Executive Committee or any of its members may request.     10.2 CBay’s Reduction of Costs. CBay commits to use its best efforts to reduce itsDirect Production Costs and Indirect Production Costs through improved productivity, better use oftechnology, and other methods as it, in it sole discretion but in consultation with the ExecutiveCommittee, deems appropriate so as to strive to optimize its Contribution Margin and as such tomaximize the profit sharing payments to MedQuist under Section 3.4(i).     10.3 CBay’s Reporting of Financial and Operational Data. CBay commits to use its bestefforts to provide complete financial and operational data about the Transcription Servicesprovided to the Company, including but not limited to, monthly financial statements showingRevenues, Direct Production Costs, Indirect Production Costs, Contribution Margin, other expensesand productivity. CBay shall use reasonable efforts to inform the Executive Committee prior toswitching any MedQuist customer from an ILP currently performing Transcription Services for suchcustomer, it being acknowledged and agreed that any such determination shall be made by CBay in itssole discretion.     10.4 MedQuist’s Maintenance and Enhancement of Systems. MedQuist commits to use itsbest efforts to maintain and enhance its system platforms and technology (including but not ******* - Material has been omitted and filed separately with the Commission.

 

20limited to DEP) to support continuing improvement in operational performance and reduction inDirect Production Costs and Indirect Production Costs of CBay.     10.5 MedQuist’s Option to Determine Volume. MedQuist shall have the sole right todetermine the volume of Transcription Services performed in India and Asia (subject to thelimitations of this Agreement) and to withdraw Indian and Asian Transcription Services volume as itdetermines in its sole discretion necessary to address quality or performance issues.**ARTICLE XI****GENERAL PROVISIONS**     11.1 Notices. Wherever provision is made in this Agreement for the giving of anynotice, such notice shall be in writing and shall be deemed to have been duly given if mailed byfirst class United States mail, postage prepaid, addressed to the party entitled to receive thesame or delivered personally to such party at the address specified below, or if deliveredpersonally, sent by facsimile transmission or sent by overnight courier. All notices shall begiven,     if to CBay, to:2661 Riva Rd Building 800Annapolis, MD 21401Attention: PresidentFacsimile: 410-266-9409     with a copy (which shall not constitute notice) to:Simpson Thacher & Bartlett LLP1999 Avenue of the Stars, 29th FloorLos Angeles, California 90067Attention: Daniel ClivnerFacsimile: (310) 407-7502     if to the Company, to:1000 Bishops Gate Boulevard, Suite 300Mt. Laurel, NJ 08054Attention: Chief Executive OfficerFacsimile: (856) 206-4215     with copies which shall not constitute notice to:General CounselMedQuist Inc.1000 Bishops Gate Boulevard, Suite 300Mt. Laurel, NJ 08054 ******* - Material has been omitted and filed separately with the Commission.

 

21Facsimile: (856) 206-4215Chairman of the Audit CommitteeMedQuist Inc.1000 Bishops Gate Boulevard, Suite 300Mt. Laurel, NJ 08054Facsimile: (856) 206-4215andFulbright & Jaworski L.L.P.666 Fifth AvenueNew York, New York 10103Attention: Paul JacobsFacsimile: (212) 318-3400or to such other address, in any such case, as any party hereto shall have last designated bynotice to the other parties. Notice shall be deemed to have been given on the day that it is sodelivered personally or sent by facsimile transmission and the appropriate confirmation receivedor, if sent by overnight courier, shall be deemed to have been given one day after delivery to thecourier company, or if mailed, three days following the date on which such notice was so mailed.     11.2 Assignment. This Agreement and the rights and duties hereunder shall be bindingupon and inure to the benefit of the successors and assigns of each of the parties hereto, butshall not be assignable or delegable by any party without the prior written consent of the otherparty.     11.3 Waivers. Any waiver by CBay or the Company of any breach of or failure to complywith any provision of this Agreement by the other party shall be in writing and shall not beconstrued as, or constitute, a continuing waiver of such provision, or a waiver of any other breachof, or failure to comply with, any other provision of this Agreement.     11.4 Compliance with Laws. The parties agree to comply with all Laws applicable tothe performance of their obligations hereunder.     11.5 Governing Law. This Agreement shall be governed by, and construed andinterpreted in accordance with, the laws of the State of New Jersey without giving effect to anyconflicts of law principles.     11.6 Third Parties. Nothing herein is intended or shall be construed to confer uponor give to any person other than the parties hereto, any rights or remedies under or by reason ofthis Agreement.     11.7 Entire Agreement; Amendment. This Agreement sets forth the entire agreement ofthe parties with respect to the subject matter hereof and supersedes any prior oral agreement withrespect thereto. This Agreement may not be amended orally but only by an instrument in writingduly executed by the parties. Nothing in this Agreement is intended to amend or modify ******* - Material has been omitted and filed separately with the Commission.

 

22theSubcontracting Agreement or the CBayScribe Marketing Agreement, each of which shall remain ineffect in accordance with its respective terms.     11.8 Headings. The headings of the Articles and Sections of this Agreement areinserted for convenience of reference only and shall not be deemed to constitute a part hereof.     11.9 Counterparts. This Agreement may be executed in any number of counterparts, allof which taken together constitute one and the same instrument, and any of the parties hereto mayexecute this Agreement by signing any such counterpart.     11.10 Force Majeure. Neither party shall be liable for any failure of, or delay inthe performance of, its obligations hereunder for the period that such failure or delay is due toearthquake, flood, fire or similar acts of God, terrorism, public enemy, civil unrest, riots,strikes or general labor disputes, or any other cause beyond such party’s reasonable control.     11.11 Severability. If any provision of this Agreement is declared invalid orunenforceable by a court of competent jurisdiction, the validity or enforceability of any otherprovision of this Agreement shall not be affected.     11.12 Injunctive Relief and Resolution of Disputes.     (a) Injunctive Relief. The parties to this Agreement acknowledge and agree thatremedies at law are inadequate in the event of any breach or threatened breach by any partyof its agreements and obligations as set forth in this Agreement. Notwithstanding Sections11.12(b) — (d), in addition to any other remedy which may be available, the non-breachingparty shall be entitled to petition for injunctive and/or other equitable relief restrainingthe breach or threatened breach of the provisions and/or obligations in this Agreement.     (b) If any dispute or controversy shall arise between the parties as to any matterarising out of or in connection with this Agreement or the transactionscontemplated hereby, the parties shall attempt in good faith to resolve such dispute orcontroversy by mutual agreement. If such dispute or controversy cannot be so resolved, itshall be resolved solely by binding arbitration in accordance with the provisions of Section11.12(c).     (c) In the event that any such dispute or controversy cannot be resolved in accordancewith the provisions of the first sentence of Section 11.12(b), such dispute or controversyshall be finally settled by binding arbitration in New Jersey under the Commercial Rules ofthe American Arbitration Association then in effect by one or more arbitrators appointed inaccordance with such rules. The decision of such arbitrator(s) shall be final and binding,and shall not be subject to appeal. Each party shall bear its own fees and expensesincurred in connection with the arbitration, and shall share equally the costs of thearbitrator(s), provided that the arbitrator may in its discretion require that thenon-prevailing party pay all or a portion of the fees and expenses of the prevailing party. ******* - Material has been omitted and filed separately with the Commission.

 

23     (d) Each of the parties hereto hereby irrevocably and unconditionally: (i) submits foritself and its property in any legal action or proceeding seeking injunctive relief,enforcing the arbitration provision set forth in Section 11.12(c), or for recognition andenforcement of any judgment in respect thereof or any arbitral award rendered with respecthereto in accordance with Section 11.12(c), to the non-exclusive general jurisdiction of thecourts of the State of New Jersey and of the United States of America sitting in theDistrict of the State of New Jersey; (ii) consents that any such action or proceeding may bebrought in such courts and waives any objection that it may now or hereafter have to thevenue of any such action or proceeding in any such court or that such action or proceedingwas brought in an inconvenient court and agrees not to plead or claim the same; (iii) agreesthat service of process in any such action or proceeding may be effected by mailing a copythereof by registered or certified mail (or any substantially similar form of mail), postageprepaid, to its address set forth in Section 11.1 hereof; and (iv) agrees that nothingherein shall affect the right to effect service of process in any other manner permitted bylaw.[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] ******* - Material has been omitted and filed separately with the Commission.

 

24IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their dulyauthorized officers as of the day and year first above written.           MEDQUIST TRANSCRIPTIONS, LTD.   CBAY SYSTEMS & SERVICES INC.             By:     By:       Name:      Name:    Title:     Title:   ******* - Material has been omitted and filed separately with the Commission.

 

25**SCHEDULE A****CBay Current Customers Schedule********* ******* - Material has been omitted and filed separately with the Commission.

 

26******* ******* - Material has been omitted and filed separately with the Commission.
 

 

27**SCHEDULE B****Current MedQuist Products and Services****•** **DocQment Enterprise Platform (“DEP”)**: MedQuist’s web based dictation andtranscription management system. Within DEP are the following applications: o DocQmanageTM: Included application which enables customer to manage authorizedusers, set-up business processes and report on Client data derived as a result of using theDEP.  o DocQscribeTM: Included application that provides an Internet-based,password-controlled typing and editing user interface which will allow authorized users tolisten to Voice Files through streaming audio delivered to their desktops, transcribe oredit reports from Voice Files, and return completed reports to Vendor forpost-transcription processing through DocQmanageTM and onward distribution to customer.  o File Storage: Included application that allows for the accessing of reportsvia DocQmanageTM for up to three hundred sixty-five (365) days following completedtranscription. Voice Files can be accessed via DocQmanageTM for up to thirty (30) daysfollowing dictation. Admission, Discharge and Transfer (“ADT”) can be accessed viaDocQscribeTM for up to ninety (90) days following the date the ADT message was received intothe DocQmanageTM database.  o DocQspeechTM: **Optional application**pursuant to which MedQuist can provideAutomated Speech Recognition to customer. DocQspeechTM is a speech recognition processbased on the integration of the SpeechMagicTM engine with the DEP and providesspeech recognized reports and associated Voice Files to a medical editor for correction.  o DocQsignTM: **Optional application**pursuant to which MedQuist can provideelectronic signature services to the customer. DocQsignTM is the physicianapproval and signature application within the DEP.  o VoiceQTM: **Optional application**pursuant to which MedQuist can provide arecording system for use over telephone lines. MedQuist will publish domestic, toll-freeU.S. telephone numbers assigned to customer. MedQuist and Customer will agree on greetingsand voice server configurations to be used by authorized Customer dictators**•** **DocQvoice**TM **-**captures voice through a variety of devices: toll-free 800 number for call-indictation, handhelds and premise-based dictation systems, **•** **DocQroute**TM**:**distribution engine that facilitates complex printing rules, faxing anduploading to HIS systems, **•** **CodeRunner w/ CAC:**packages a third-party computer-assisted coding program (CAC) with ourCodeRunner coding workflow software to deliver a Web-based product to manage the codingenterprise **•** **Coding Services** **•** **MedQuist Performance Monitor (MPM):**Reporting tool that provides detailed reports andbusiness analytics, reports, graphs, to monitor and optimize the clinical documentationprocess. **•** **DEP on an Application Services basis** **•** **SpeechQ**TM **for Radiology** **•** **SpeechQ**TM **for General Medicine** ******* - Material has been omitted and filed separately with the Commission.

 

28**SCHEDULE C****Current Pipeline Customers Schedule********* ******* - Material has been omitted and filed separately with the Commission.

 

29
**Note: To the extent that (i) a CBay Pipeline Customer listed above is, as of the Effective Date,****currently serviced by MedQuist or in the MedQuist sales pipeline, (ii) a portion of any of a CBayPipeline Customer listed above is not serviced by CBay as of the Effective Date, or (iii) a CBayPipeline Customer listed above has sent out, or sends out, an RFP (Request for Proposal), MedQuist,without the prior written consent of CBay, may pursue a sales opportunity or retention efforts forany such CBay Pipeline Customer currently serviced by MedQuist or in MedQuist’s pipeline, portionsof such CBay Pipeline Customer not serviced by CBay or CBay Pipeline Customer that has sent out orsends out an RFP** ******* - Material has been omitted and filed separately with the Commission.

 

30**SCHEDULE D****GPO Contracts Schedule********* ******* - Material has been omitted and filed separately with the Commission.

 

31**SCHEDULE E****ILP Contracts Schedule**1. Accentia Technologies, Ltd. Agreement by and between MedQuist Transcriptions,Ltd. and Accentia Technologies, Ltd. effective March 24, 2009, as amended by Amendment No.1effective July 2, 2009. 2. Decipher Intime Transcriptions Private Limited. Agreement by and betweenMedQuist Transcriptions, Ltd. and Decipher Intime Transcriptions Private Limited effectiveMarch 23, 2009. 3. Gemini Bay Consulting Ltd. Agreement by and between MedQuist Transcriptions,Ltd. and Gemini Bay Consulting Ltd. effective March 23, 2009 ******* - Material has been omitted and filed separately with the Commission.

 

32**SCHEDULE F****Services Fee Schedule**           **Price**  **Type of**   **Non-Client** **Price****Service** **Service Descriptions** **Ready** **Client Ready****A** Transcription performedby CBay’stranscriptionists forCompany Customerslocated in the UnitedStates of America ******* *********B** Transcription performedusing the Company’sAutomated SpeechRecognition application(with editing performedby CBay) for CompanyCustomers located inthe United States ofAmerica ******* *******CBay shall identify to the Company, the specific Company customers for whom CBay is able to supplyClient Ready Transcription Services. The Company shall designate to CBay in writing which of theCompany customers identified by CBay that the Company wishes CBay to provide Client ReadyTranscription Services. CBay shall be paid at the rates set forth above for Client and Non-ClientReady Services.The Threshold QA Volume for Client Ready Services shall be *******. The Threshold QA Volume forNon-Client Ready Services shall be *******.During the Implementation Period, CBay shall have the right to route up to ******* of the Transcribedlines to the Company’s quality assurance without incurring a charge back for quality assuranceservices; provided, however, that there shall be no Implementation Period with respect to anyMedQuist customer that CBay elects to switch from an ILP currently performing TranscriptionServices for such customer to CBay.After the Implementation Period, in the event that CBay routes transcription volume during anybilling period in excess of the applicable QA Threshold, the Company shall apply a charge back atthe actual domestic quality assurance cost per line for all lines in every report routed to Companyquality assurance resources above the QA Threshold (the “QA Credit”). This domestic qualityassurance cost per line will initially be set at ******* and shall be adjusted annually toreflect the Company’s average domestic quality assurance cost per line during the prior calendaryear.The Company shall invoice CBay monthly for the applicable QA Credit, and shall have the right tooffset the amount of a QA Credit, if any, against invoices due by MedQuist to CBay under thisAgreement.If MedQuist, in its reasonable judgment, determines in accordance with existing custom and practiceand after notification to the Executive Committee, that the performance by CBay of TranscriptionServices for a MedQuist customer is not meeting the quality standards necessary for the customer’ssatisfaction or specified in MedQuist’s contract with such customer, MedQuist ******* - Material has been omitted and filed separately with the Commission.

 

33shall have the right, at its sole option, to elect to perform some or all of the quality assurancework for such customer while MedQuist and the Executive Committee work to address and remedy theperformance issues. If MedQuist elects to perform any portion of such quality assurance work, (A)MedQuist shall notify CBay and shall be entitled to the QA Credit for such work as set forth onthis Schedule F and (B) an issues resolution committee reporting to the Executive Committee withrepresentatives from MedQuist and CBay will be immediately convened, with an objective of resolvingthe quality assurance performance issues as soon as possible. The issues resolution committeeshall report to the Executive Committee in no less than 30 day intervals following MedQuist’selection to perform such quality assurance work.The parties hereto shall negotiate in good faith a resolution to any issues that may arise in thefuture under the Internal Revenue Code and applicable state tax laws in respect of this Agreement. ******* - Material has been omitted and filed separately with the Commission.

 

34**SCHEDULE GThe Covered Entities Schedule**Shaster