FORTH IN SECTION 7 OF THIS AGREEMENT.
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 ON PSP'S REQUEST, MEDQUIST WILL
GIVE PSP WRITTEN NOTICE OF THE IDENTITY OF ANY DEALER THAT MEDQUIST HAS
APPOINTED.
3.
INITIAL TERM AND RENEWAL.
3.1.
INITIAL TERM.
THIS AGREEMENT WILL BE DEEMED TO HAVE COMMENCED ON
JUNE 1, 2004, AND WILL CONTINUE IN EFFECT THROUGH JUNE 30, 2007, SUBJECT TO
EARLIER TERMINATION AS SET FORTH IN THIS AGREEMENT (THE "INITIAL TERM").
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 THE INITIAL TERM, TOGETHER WITH THE RENEWAL TERMS, IF ANY, BEING REFERRED TO
COLLECTIVELY IN THIS AGREEMENT AS THE "TERM"), PROVIDED THAT MEDQUIST IS, AT THE
END OF THE INITIAL TERM OR THE FIRST RENEWAL TERM, IN COMPLIANCE WITH THE
AGREEMENT.
IF PSP DECIDES TO DISCONTINUE ALL BUSINESS RELATING TO THE PRODUCTS
IN THE TERRITORY, PSP MAY TERMINATE THIS AGREEMENT BY PROVIDING MEDQUIST 6
MONTHS PRIOR WRITTEN NOTICE OF SUCH TERMINATION.
IF PSP TERMINATES THE
AGREEMENT DUE TO THE DISCONTINUATION OF ITS BUSINESS RELATING TO THE PRODUCTS,
PSP AGREES TO NEGOTIATE IN GOOD FAITH WITH MEDQUIST THE TERMS AND CONDITIONS
UNDER WHICH IT WOULD PROVIDE TRAINING AND ACCESS TO THE SOURCE CODE OF THE
PRODUCTS THAT WOULD BE REASONABLY NECESSARY FOR MEDQUIST TO CONTINUE DEVELOPMENT
AND SUPPORT THE INSTALLED BASE OF PRODUCTS IN THE TERRITORY.
OTHERWISE, THIS
AGREEMENT WILL AUTOMATICALLY EXPIRE AT THE END OF THE SECOND RENEWAL TERM.
3.2.1.
IF AT THE TIME OF EACH SUCH RENEWAL, MEDQUIST HAS MET ALL ITS
FORECASTS AS MENTIONED IN SCHEDULE D TO THE TERRITORY, THEN SUCH EXCLUSIVITY
WILL CONTINUE THROUGHOUT THE APPLICABLE RENEWAL TERM, PROVIDED: (I) MEDQUIST'S
ANNUAL SALES FORECAST IS AT LEAST (15%) HIGHER THAN ITS ACTUAL SALES FOR THE
IMMEDIATELY-PRECEDING TWELVE (12) MONTH PERIOD AS MEASURED FOR THE 12 MONTHS PER
EACH END OF JUNE 30,; AND (II) MEDQUIST MEETS SUCH SALES FORECAST.
3.2.2.
IF AT THE TIME OF EACH SUCH RENEWAL MEDQUIST DOES NOT HAVE
EXCLUSIVE RIGHTS TO THE TERRITORY, THEN MEDQUIST WILL NOT HAVE EXCLUSIVITY FOR
THE APPLICABLE RENEWAL TERM.
IN SUCH EVENT, PRICING WILL BE AT THE LOWER OF
SCHEDULE C OR PRICING THAT IS EQUIVALENT TO THE PRICING PSP OFFERS OTHER OEM,
DEALER, DISTRIBUTOR, OR LIKE RESELLER CONDUCTING BUSINESS IN THE TERRITORY AND
DOING SIMILAR VOLUMES OF BUSINESS.
3
4.
FEES.
4.1.
DEVELOPMENT FEE. IN CONSIDERATION OF PSP'S DEVELOPMENT,
MAINTENANCE AND SUPPORT SERVICES FOR THE FIRST VERSION OF THE PRODUCTS, MEDQUIST
WILL PAY PSP A DEVELOPMENT FEE IN THE AMOUNT OF [***] (THE "DEVELOPMENT FEE"),
AS FOLLOWS: (1) 50% ON THE DATE PSP DELIVERS A DULY-EXECUTED ORIGINAL OF THIS
AGREEMENT TO MEDQUIST, (II) 25% ON OR BY SEPTEMBER 24, 2004; AND (III) THE
BALANCE ON OR BY DECEMBER