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Shareholder Agreement - MEDQUIST INC - 6-1-2000

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Shareholder Agreement - MEDQUIST INC - 6-1-2000 Powered By Docstoc
					EXHIBIT (d)(1)(C) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 779,530 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 779,530 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ DAVID COHEN ______________________ Name: DAVID COHEN

Title: CEO

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EXHIBIT (d)(1)(D) SHAREHOLDER AGREEMENT

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ DAVID COHEN ______________________ Name: DAVID COHEN

Title: CEO

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EXHIBIT (d)(1)(D) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and

EXHIBIT (d)(1)(D) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 124,224 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 124,224 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN ________________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN _________________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN A. DONAHOE, JR. _________________________ Name: JOHN A. DONAHOE, JR.

Title: President

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EXHIBIT (d)(1)(E) SHAREHOLDER AGREEMENT

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN ________________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN _________________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN A. DONAHOE, JR. _________________________ Name: JOHN A. DONAHOE, JR.

Title: President

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EXHIBIT (d)(1)(E) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and

EXHIBIT (d)(1)(E) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 46,057 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 46,057 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN EMERY ______________________ Name: JOHN EMERY

Title: CFO

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EXHIBIT (d)(1)(F) SHAREHOLDER AGREEMENT

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN EMERY ______________________ Name: JOHN EMERY

Title: CFO

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EXHIBIT (d)(1)(F) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and

EXHIBIT (d)(1)(F) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 39,489 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 39,489 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ ETHAN COHEN ______________________ Name: ETHAN COHEN

Title: SVP

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EXHIBIT (d)(1)(G) SHAREHOLDER AGREEMENT

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ ETHAN COHEN ______________________ Name: ETHAN COHEN

Title: SVP

-10-

EXHIBIT (d)(1)(G) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and

EXHIBIT (d)(1)(G) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 74,570 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 74,570 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ RONALD SCARPONE ______________________ Name: RONALD SCARPONE

Title: SVP

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EXHIBIT (d)(1)(H) SHAREHOLDER AGREEMENT

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ RONALD SCARPONE ______________________ Name: RONALD SCARPONE

Title: SVP

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EXHIBIT (d)(1)(H) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement.

EXHIBIT (d)(1)(H) SHAREHOLDER AGREEMENT AGREEMENT, dated as of May 22, 2000 between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser") and the beneficial owner ("Shareholder") of Shares of MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, in order to induce Purchaser to enter into the Tender Offer Agreement, dated as of the date hereof, with the Company (the "Tender Offer Agreement"), Purchaser has requested Shareholder, and Shareholder has agreed, to enter into this Agreement and an employment agreement with the Company, dated of even date herewith, to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer (the "Employment Agreement"); WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested, and Purchaser has agreed, to enter into a Governance Agreement and a License Agreement, each to become effective upon Purchaser's payment for Shares pursuant to the terms of the Offer; WHEREAS, Shareholder and Purchaser desire to make certain representations, warranties, covenants and agreements in connection with this Agreement; and WHEREAS, capitalized terms used herein but not defined herein shall have the respective meanings ascribed to such terms in the Tender Offer Agreement. NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein the parties hereto hereby agree as follows: ARTICLE I RESTRICTION ON TRANSFER; PURCHASE AND SALE OF SHAREHOLDER'S SHARES SECTION 1.1 Restrictions on Transfer. (a) Shareholder hereby agrees that, except as contemplated by Section 1.1(b) and Section 1.3 hereof (and provided that nothing herein shall prevent Shareholder from exercising any option for Shares held by Shareholder), during the period beginning on the date hereof and continuing to and including the date two years after the date hereof, the

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for

undersigned will not offer, sell, contract to sell, tender for sale, enter into a repurchase contract with respect to, lend, pledge, assign, hypothecate, encumber, dispose of, grant any right (including without limitation, any put or call option) to purchase, make any short sale or otherwise dispose of (i) any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares, owned on the date hereof, (ii) any Shares issued upon the exercise of options or warrants to purchase any Shares referred to in the preceding clause (i), (iii) any options to purchase any Shares issued in accordance with the option grant contemplated by the Employment Agreement or (iv) any Shares issued upon the exercise of the options to purchase Shares referred to in the preceding clause (iii), in each case, owned directly by the undersigned or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Shareholder's Shares"). Without limiting the generality of the foregoing, it is expressly agreed that Shareholder shall not engage in any derivative, hedging, swap or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of, or reduction of economic risk with respect to, the Shareholder's Shares even if such Shares would be disposed of by someone other than the Shareholder. (b) Notwithstanding the foregoing restrictions contained in subsection (a) above, Shareholder may (x) transfer any of Shareholder's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the Shareholder or the immediate family of the Shareholder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Purchaser or (y) take any of the actions that would otherwise be prohibited by subsection (a) above with respect to or in respect of zero Shares (which number of Shares includes, and is not in addition to, the Purchased Shares (as defined in Section 1.3)). For purposes of this Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. SECTION 1.2 Voting. Shareholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the shareholders of the Company, however called, or in any written consent in lieu -2-

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 29,600 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's

thereof, Shareholder shall, or shall cause the record holder(s) of Shareholder's Shares to (i) vote Shareholder's Shares against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Tender Offer Agreement; and (ii) vote Shareholder's Shares against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Offer, including, but not limited to: (A) any acquisition agreement or other similar agreement related to an Acquisition Proposal, (B) any change in the Company's management or the Company Board, except as otherwise agreed to in writing by Purchaser or (C) any other material change in the Company's corporate structure or business. SECTION 1.3 Purchase and Sale of Shares by Purchaser. Subject to the terms of this Agreement, promptly following expiration of the Offer (and in no event later than five (5) business days thereafter), and provided that Purchaser shall have accepted for payment and paid for Shares pursuant to the terms of the Offer, Shareholder shall sell to Purchaser, and Purchaser shall purchase from Shareholder, 29,600 Shares (the "Purchased Shares") at a price equal to the price to be paid per Share in the Offer (the aggregate amount to be paid for the Shares being the "Purchase Price"). The closing of the transaction constituting the sale and purchase of the Shares shall take place at such location, time and date as Purchaser and Shareholder shall mutually agree (the "Closing"). At the Closing, (i) Purchaser shall pay Shareholder the Purchase Price in immediately available funds by wire transfer to a bank account designated by Shareholder and (ii) Shareholder shall deliver to Purchaser (A) certificates representing the Purchased Shares, duly endorsed in blank for transfer or accompanied by duly executed blank stock powers together will all necessary stock transfer stamps affixed thereto, and such instruments as shall reasonably be required by Purchaser to transfer to Purchaser all right, title and interest in the Shares, free and clear of any liens or encumbrances and (B) such other documents and instruments as may be reasonably requested by Purchaser. SECTION 1.4 Expiration. Except as provided in Section 5.12, this Agreement and all of Shareholder's obligations hereunder shall terminate concurrent with the earlier of (a) the termination of the Tender Offer Agreement in accordance with its terms and (b) the occurrence of any of the conditions that result in a revocation of the Waiver (as such term is defined in Section 5(b) of the Employment Agreement). -3-

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER SECTION 2.1 Valid Title; Absence of Liens. Shareholder is the sole, true, lawful and beneficial owner of Shareholder's Shares. Shareholder owns the Purchased Shares free and clear of any liens or encumbrances of any kind and there is no restriction on Shareholder's ability, power or right to transfer or dispose of the Purchased Shares. Upon delivery of the certificate or certificates for the Purchased Shares at the Closing, Purchaser will acquire valid title to the Purchased Shares free and clear of any encumbrances or liens of any kind other than restrictions imposed by applicable securities laws SECTION 2.2 Authority; Enforceability; Noncontravention. (a) Shareholder has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Shareholder and the consummation by Shareholder of the transactions contemplated by this Agreement have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person). This Agreement has been duly executed and delivered by Shareholder and constitutes a valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) The execution and delivery of this Agreement by Shareholder does not, and the consummation by Shareholder of the transactions contemplated by this Agreement and compliance by Shareholder with the provisions of this Agreement will not, conflict with or result in any violation of, or default (with or without notice or lapse of time, or both) under, or result in the creation of any lien or encumbrance upon the Purchased Shares under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on Shareholder. No consent, approval, order or authorization of, or registration, declaration or filing with or exemption by any Federal, state or local government or any court, administrative or regulatory agency or commission or other governmental authority or agency, domestic or foreign, is required by or with respect to Shareholder in connection with -4-

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

the execution and delivery of this Agreement by Shareholder or the consummation by Shareholder of the transactions contemplated by this Agreement, except for applicable requirements, if any, of (a) Sections 13 and 16 of the Exchange Act and the rules and regulations thereunder and (b) the HSR Act. SECTION 2.3 Total Shares. Schedule 2.3 sets forth (i) a true and accurate number of the number of Shares beneficially owned by Shareholder as of the date hereof, and (ii) a true and complete list of all options held by Shareholder as of the date hereof and the number, exercise price, vesting date and expiration date of each option. SECTION 2.4 Proxy. Shareholder represents that any proxy heretofore given with respect to the Shareholder's Shares is not irrevocable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION 3.1 Corporate Power and Authority; Enforceability. Purchaser has the requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Purchaser and the consummation of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. SECTION 3.2 Investment Intent; Financing. Purchaser is acquiring the Purchased Shares for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Purchased Shares. Purchaser is an "accredited investor" within the meaning of Regulation D of the Securities Act. Purchaser has and will have at the Closing the funds necessary to pay the Purchase Price. -5-

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company).

ARTICLE IV COVENANTS OF SHAREHOLDER SECTION 4.1 Covenants of Shareholder. For so long as the Agreement is in effect, Shareholder agrees as follows: (a) Shareholder shall not, except as contemplated by the terms of this Agreement, knowingly take any action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the purchase of the Purchased Shares. (b) Shareholder will not, except as contemplated by the terms of this Agreement, (a) knowingly take, agree or commit to take any action that would make any representation or warranty of Shareholder hereunder inaccurate in any respect as of any time prior to the termination of this Agreement or (b) knowingly omit, or agree or commit to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any respect at any such time. ARTICLE V MISCELLANEOUS SECTION 5.1 Expenses. All costs and expenses incurred by any party in connection with this Agreement shall be paid by the party incurring such cost or expense (it being understood that Shareholder's costs and expenses incurred in connection with this Agreement may be paid for by the Company). SECTION 5.2 Specific Performance. Shareholder agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that Purchaser shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the Federal courts of the United States of America located in the State of New Jersey, this being in addition to any other remedy to which they are entitled at law or in equity. SECTION 5.3 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or sent by overnight courier (providing proof of delivery) or by telecopy (with copies by overnight courier) to Purchaser at its -6-

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be

address set forth in the Tender Offer Agreement or Shareholder at the address for the Company set forth in the Tender Offer Agreement or to such other address as such party may have furnished to the other parties in writing in accordance herewith. SECTION 5.4 Amendments. This Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a written agreement executed by the parties hereto. SECTION 5.5 Successors and Assigns. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties without the prior written consent of the other parties, except that Purchaser may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly-owned subsidiary of Purchaser (it being understood that no such assignment shall relieve Purchaser of its obligations hereunder). Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns. Shareholder agrees that this Agreement and the obligations of Shareholder hereunder shall attach to Shareholder's Shares and shall be binding upon and inure to the benefit of any person or entity to which legal or beneficial ownership of such Shares shall pass, whether by operation of law or otherwise, including Shareholder's heirs, guardians, administrators or successors. SECTION 5.6 (a) Governing Law and Venue; Waiver of Jury Trial. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the State of New Jersey applicable to contracts wholly made and performed in such state. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that -7-

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto.

all claims with respect to such action or proceeding shall be heard and determined in such a New Jersey Federal court. The parties hereby consent to and grant such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 5.3 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.6. SECTION 5.7 Counterparts; Effectiveness. This Agreement may be signed (including by facsimile) in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. SECTION 5.8 Stop Transfer Restriction. In furtherance of this Agreement, Shareholder hereby authorizes Purchaser's counsel to notify the Company's transfer agent that there is a stop transfer restriction with respect to all of Shareholder's Shares (and that this Agreement places limits on the voting and transfer of such shares). SECTION 5.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (ii) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. -8SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

SECTION 5.10 Shareholder Capacity. By executing and delivering this Agreement, Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company or any subsidiary of the Company. Shareholder signs solely in his capacity as the beneficial owner of Shareholder's Shares and nothing herein shall limit or affect any actions taken by Shareholder in his capacity as an officer or director of the Company or any subsidiary of the Company. SECTION 5.11 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible. SECTION 5.12 Survival. Sections 1.4 (Expiration), 5.1 (Expenses), 5.2 (Specific Performance), 5.3 (Notices), 5.5 (Successors and Assigns), 5.6 (Governing Law), 5.9 (Entire Agreement; No Third-Party Beneficiaries), 5.11 (Severability) and this Section 5.12 shall survive expiration of this Agreement. All other representations, warranties, agreement and covenants in this Agreement shall not survive the termination of this Agreement. -9-

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN W. QUAINTANCE _______________________ Name: JOHN W. QUAINTANCE

Title: SVP

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EXHIBIT (d)(1)(I) EXECUTION COPY

The parties hereto have caused this Agreement to be duly executed as of the day and year first above written. KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. BAAN _____________________ Name: A. BAAN

Title: Executive Vice President Royal Philips Electronics

By: /s/ J.H.M. HOMMEN ______________________ Name: J.H.M. HOMMEN

Title: Executive Vice President Royal Philips Electronics

SHAREHOLDER
By: /s/ JOHN W. QUAINTANCE _______________________ Name: JOHN W. QUAINTANCE

Title: SVP

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EXHIBIT (d)(1)(I) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John M. Suender, a resident of Cherry Hill, New Jersey ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under

EXHIBIT (d)(1)(I) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John M. Suender, a resident of Cherry Hill, New Jersey ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President and General Counsel of

the Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

the Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $185,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 75,000 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plan. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time;

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 75,000 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plan. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John M. Suender ---------------------------------John M. Suender

MEDQUIST INC.
/s/ David A. Cohen ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John M. Suender ---------------------------------John M. Suender

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

EXHIBIT (d)(1)(J) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and David A. Cohen, a resident of Philadelphia, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John M. Suender ---------------------------------John M. Suender

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

EXHIBIT (d)(1)(J) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and David A. Cohen, a resident of Philadelphia, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Chairman and Chief Executive Officer of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement.

EXHIBIT (d)(1)(J) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and David A. Cohen, a resident of Philadelphia, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Chairman and Chief Executive Officer of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $460,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 75% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 365,998 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time;

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 75% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 365,998 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 2 multiplied by (y) the sum of all cash compensation

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 2 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ David A. Cohen ---------------------------------David A. Cohen

MEDQUIST INC.
/s/ John M. Suender ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ David A. Cohen ---------------------------------David A. Cohen

MEDQUIST INC.
/s/ John M. Suender ---------------------------------Title: Senior Vice President MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

Exhibit (d)(1)(K) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John A. Donohoe, Jr. a resident of Holland, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ David A. Cohen ---------------------------------David A. Cohen

MEDQUIST INC.
/s/ John M. Suender ---------------------------------Title: Senior Vice President MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

Exhibit (d)(1)(K) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John A. Donohoe, Jr. a resident of Holland, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as President and Chief Operating Officer of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement.

Exhibit (d)(1)(K) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John A. Donohoe, Jr. a resident of Holland, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as President and Chief Operating Officer of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $300,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 45% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 159,000 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time;

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 45% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 159,000 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 2 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John A. Donohoe, Jr. ---------------------------------John A. Donohoe, Jr.

MEDQUIST INC.
/s/ David A. Cohen ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John A. Donohoe, Jr. ---------------------------------John A. Donohoe, Jr.

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

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EXHIBIT (d)(1)(L) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John R. Emery, a resident of New Hope, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John A. Donohoe, Jr. ---------------------------------John A. Donohoe, Jr.

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

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EXHIBIT (d)(1)(L) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John R. Emery, a resident of New Hope, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President and Chief Financial Officer of the Company and Employee hereby accepts such

employment, upon the terms and conditions set forth in this Agreement.

EXHIBIT (d)(1)(L) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John R. Emery, a resident of New Hope, Pennsylvania ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President and Chief Financial Officer of the Company and Employee hereby accepts such

employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $190,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 68,943 of the total of 78,000 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 68,943 of the total of 78,000 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John R. Emery ---------------------------------John R. Emery

MEDQUIST INC.
/s/ David A. Cohen ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John R. Emery ---------------------------------John R. Emery

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

EXHIBIT (d)(1)(M) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and Ethan Cohen, a resident of Shaker Heights, Ohio ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John R. Emery ---------------------------------John R. Emery

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

EXHIBIT (d)(1)(M) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and Ethan Cohen, a resident of Shaker Heights, Ohio ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President and Chief Technology Officer of the Company and Employee hereby accepts such

employment, upon the terms and conditions set forth in this Agreement.

EXHIBIT (d)(1)(M) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and Ethan Cohen, a resident of Shaker Heights, Ohio ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President and Chief Technology Officer of the Company and Employee hereby accepts such

employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $170,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 59,234 of the total of 68,071 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). c. Stay Bonus. Employee shall receive a payment of $20,000 (the "Stay Bonus") payable on December 10, 2000, provided he is still employed by the Company on such date. Notwithstanding the foregoing, such Stay Bonus shall be earlier payable in the event (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach.

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 59,234 of the total of 68,071 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). c. Stay Bonus. Employee shall receive a payment of $20,000 (the "Stay Bonus") payable on December 10, 2000, provided he is still employed by the Company on such date. Notwithstanding the foregoing, such Stay Bonus shall be earlier payable in the event (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach. -36. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. -47. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination.

6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. -47. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. -5c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated

7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. -5c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, -6-

c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, -6-

agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or (iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of

agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or (iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of -7-

securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the

securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the -8-

legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its

legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its -9-

subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax

subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax -10-

imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. -11-

imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. -11-

b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is -12-

required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate

b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is -12-

required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the Gross-Up Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. -13-

required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the Gross-Up Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. -13-

c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context

c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ Ethan Cohen ---------------------------------Ethan Cohen

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

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EXHIBIT (d)(1)(N) EXECUTION COPY

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ Ethan Cohen ---------------------------------Ethan Cohen

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

EXHIBIT (d)(1)(N) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and Ronald A. Scarpone, a resident of Voorhees, New Jersey ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President, New Business Development

of the Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this

EXHIBIT (d)(1)(N) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and Ronald A. Scarpone, a resident of Voorhees, New Jersey ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President, New Business Development

of the Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the

of the Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non-competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $170,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 81,000 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time;

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 30% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of all of the total of 81,000 outstanding unvested Company options he will hold as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability. If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ Ronald A. Scarpone ---------------------------------Ronald A. Scarpone

MEDQUIST INC.
/s/ David A. Cohen ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ Ronald A. Scarpone ---------------------------------Ronald A. Scarpone

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

EXHIBIT (d)(1)(O) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John W. Quaintance, a resident of Phoenix, Arizona ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ Ronald A. Scarpone ---------------------------------Ronald A. Scarpone

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

EXHIBIT (d)(1)(O) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John W. Quaintance, a resident of Phoenix, Arizona ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President, Western Region of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement.

EXHIBIT (d)(1)(O) EXECUTION COPY EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 22nd day of May, 2000, by and between MedQuist Inc., a New Jersey corporation (the "Company"), and John W. Quaintance, a resident of Phoenix, Arizona ("Employee"). BACKGROUND The Company desires to provide for Employee's continued employment with the Company. Employee desires to accept such employment on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto, intending legally to be bound, hereby agree as follows: 1. Effective Date. This Agreement shall become effective at the time Koninklijke Philips Electronics N.V. ("Purchaser") pays for Shares (as defined in Section 1.1(a) of the Tender Offer Agreement, dated as of the date hereof, between Purchaser and the Company (the "Tender Offer Agreement")), pursuant to the terms of the Offer (as defined in Section 1.1(a) of the Tender Offer Agreement), provided that Employee is employed by the Company at such time. This Agreement cancels and supersedes any and all prior oral or written agreements and understandings (the "Prior Agreements") between or among any or all of the parties hereto with respect to the employment by or obligations of Employee to any thereof, with the exception of the Employee's obligations under any restrictive covenants or confidentiality provisions contained in any Prior Agreement, which covenants and provisions shall survive with respect to the time period prior to the Effective Date of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the matters herein provided, and no modification or waiver of any provision hereof shall be effective unless in writing and signed by the parties hereto. 2. Employment. The Company hereby employs Employee as Senior Vice President, Western Region of the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non- competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the

Company and Employee hereby accepts such employment, upon the terms and conditions set forth in this Agreement. 3. Term. The Company shall employ Employee hereunder for a three (3) year term commencing on the Effective Date hereof (the "Term"), which Term will be automatically extended for additional one (1) year periods beginning on the third anniversary of the Effective Date and upon each subsequent anniversary thereof unless either party provides the other party with at least ninety (90) days' prior written notice of its intention not to renew this Agreement. 4. Office and Duties. a. Duties. During the Term, Employee shall render such services as are appropriate for a person holding Employee's position and such additional or alternative duties as may from time to time be assigned to Employee by the Board of Directors of the Company ("Duties"). 5. Full Time Emp1oyment. During the Term, Employee shall use Employee's best efforts to carry out the Duties and other obligations hereunder and devote Employee's entire working time to the business and affairs of the Company, and shall not, in any advisory or other capacity, work for any other individual, firm or corporation without the prior written consent of the Company. a. No Conflicting Agreements. Employee represents and warrants to the Company that he is not subject or a party to any Agreement, non- competition covenant, non-disclosure agreement or other agreement, covenant, understanding or restriction which would prohibit Employee from executing this Agreement or performing fully the Duties and other obligations hereunder, or which would in any manner, directly or indirectly, limit or affect the Duties or other obligations hereunder. b. Base Salary; Short Term Bonus; Options. As compensation for the services that Employee shall render hereunder, Employee shall be entitled to a total base salary of $154,000 per year ("Base Salary"), payable at such times as is consistent with the Company's pay periods -2-

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 25% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 44,400 of the total of 49,800 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time;

for other executives of the Company. In addition, Employee shall be eligible for participation in the Company's short term targeted bonus plan in an amount equal to up to 25% of Base Salary. Subject to approval of the Board of Directors, on or promptly following the Effective Date, the Company shall grant to Employee an option to purchase shares of the common stock of the Company under the Company's Incentive Stock Option Plan for Officers and Key Employees adopted by the Board of Directors on January 17, 1992 in accordance with the terms outlined on Schedule A annexed hereto. Employee agrees that the consummation of the transactions contemplated by the Tender Offer Agreement shall not constitute a "change in control" for purposes of 44,400 of the total of 49,800 outstanding unvested Company options he holds as of the Effective Date (the "Deferred Vesting Options") and hereby waives all rights to the accelerated vesting of the Deferred Vesting Options that would have occurred upon the consummation of the transactions authorized by the Tender Offer Agreement (the "Waiver"). Notwithstanding the foregoing, such Waiver shall be deemed revoked, and all Deferred Vesting Options will immediately vest in the event of (i) the Employee's death, (ii) the Employee's Disability, (iii) a termination by the Company of the Employee's employment without cause, (iv) the receipt by the Employee of notice from the Company of nonrenewal of the Agreement, (v) a voluntary resignation by the Employee following a required relocation of the Employee's principal place of business by more than fifty miles, or (vi) a failure by the Company to pay the compensation authorized by this Agreement, provided that Employee has given the Company notice of such breach and the Company has not cured such breach within thirty days of receipt of such notice (a "Material Breach"). 6. Other Benefits. During the Term, Employee will be eligible to receive the following benefits (collectively, "Benefits"): a. Savings and Retirement Plans. Participation in all savings, pension and retirement plans and programs of the Company generally available to other executives of the Company as in effect from time to time; b. Welfare Plans. Participation in any welfare benefit plans and programs of the Company as in effect from time to time; -3c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to

c. Life Insurance. Life insurance maintained by the Company on the life of Employee (naming the beneficiary of Employee's choice) in an amount consistent with policy of the Company as in effect from time to time; d. Vacation. Paid vacation (taken consecutively or in segments) in accordance with the Company's policies generally applicable to other executives of the Company from time to time, taken at such times as is reasonably consistent with proper performance by Employee of Employee's duties and responsibilities hereunder; and e. Car Allowance. The Company shall continue to provide a car allowance or use of an automobile to Employee, including all reasonable expenses of operation, consistent with the car allowance that is presently provided to Employee. 7. Reimbursement for Expenses. During the Term, the Company shall reimburse Employee in full for all reasonable and necessary business and travel expenses incurred by him in connection with the performance of the Duties (collectively, "Expenses"). Notwithstanding any provision herein to the contrary, the Company shall reimburse Employee only (i) upon presentation by Employee of written vouchers or expense statements satisfactorily evidencing such expenses as may be reasonably required by the Company and (ii) if such expenses are in accordance with the Company's policies generally applicable to executives of the Company. 8. Termination. a. Death or Disability. Subject to Section 8.d. below, this Agreement shall terminate immediately upon Employee's death. Subject to Section 8.d. below, the Company may terminate Employee's employment hereunder in the event of physical or mental incapacity or disability which renders Employee unable to perform the Duties for a period of one hundred twenty (120) days or more during any period of twelve (12) consecutive months ("Disability"). b. Termination for Cause. Subject to Section 8.d. below, the Company may terminate this Agreement at any time with cause upon written notice to -4-

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability . If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee

Employee. Termination for "cause" shall mean discharge of the Employee by the Company on any of the following grounds: (i) Employee's indictment or conviction in a court of law of any crime or offense that makes Employee unfit for continuing employment, prevents Employee from performing the Duties or other obligations hereunder or adversely affects the reputation or business activities of the Company; (ii) Employee's dishonesty, substance abuse or misappropriation of funds; or (iii) Employee's failure or refusal to perform the Duties or other obligations hereunder. c. Resignation. Subject to Section 8.d. below, Employee may resign from his employment hereunder by giving the Company six (6) months' prior written notice. d. Obligations of the Company Upon Termination. (1) Termination for Cause; Resignation; Death or Disability . If the Company terminates Employee's employment hereunder for cause, or if Employee resigns, or if Employee dies or suffers a Disability, the Company shall have no further obligations to Employee hereunder other than for the payment of (i) accrued but unpaid salary prorated through the date of termination or effective date of resignation ("Accrued Salary"), (ii) any Benefits vested as of such date ("Vested Benefits") and (iii) unreimbursed Expenses incurred prior to such date. (2) Termination Without Cause, Upon Required Relocation or Material Breach. If (i) the Company terminates Employee's employment hereunder without cause or (ii) if the Employee voluntarily terminates his employment following a required relocation of his principal place of business by more than 50 miles or following a Material Breach, the Company shall have no further obligation to Employee hereunder other than for the payment of (i) Accrued Salary, (ii) a lump sum payment equal to (x) 1.5 multiplied by (y) the sum of all cash compensation awarded to Employee in the fiscal year immediately prior to -5-

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services

termination, or if Employee's compensation was higher or would be higher on an annualized basis, in the fiscal year in which such termination takes place, (iii) any Vested Benefits and (iv) unreimbursed Expenses incurred prior to the date of termination. 9. Restrictive Covenants and Confidentiality; Injunctive Relief. a. As a condition to the performance by the Company of its obligations hereunder so long as Employee remains an employee of the Company, and for a period of two (2) years thereafter, Employee shall not, without the prior written approval of the Board of Directors of the Company, directly or indirectly through any other person, firm or corporation, whether individually or in conjunction with any other person, or as an employee, agent, representative, partner or holder of any interest in any other person, firm, corporation or other association: (i) solicit, entice or induce any person, firm or corporation who or which presently is, within eighteen (18) months prior hereto was, or at any time during the Term shall be, a client or customer of the Company or any of its subsidiaries to become a client or customer of any other person, firm or corporation, and Employee shall not approach any such person, firm or corporation for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (ii) solicit, entice, induce or hire any person who presently is, within eighteen (18) months prior hereto was, or at any time during the term hereof shall be an employee of the Company or any of its subsidiaries to become employed by any other person, firm or corporation, and Employee shall not approach any such employee for such purpose or authorize or knowingly approve the taking of such actions by any other person; or (iii) compete with, or encourage or assist others to compete with, or solicit orders or otherwise participate in business transactions in the electronic transcription services and health information management solutions services businesses anywhere within the United States (each, a "Competing Business"); or -6-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

(iv) lend any credit or money for the purposes of establishing or operating or assisting any Person to establish or operate a Competing Business, or otherwise give aid or advice to any other person or entity engaging in any Competing Business; or (v) lend or allow his professional skill, knowledge or experience to be so used by any person or entity which is engaged in a Competing Business. Nothing in the foregoing shall prohibit Employee from engaging in any business that is not a Competing Business after termination of Employee's employment with the Company, or investing in the securities of any corporation (including a Competing Business) having securities listed on a national security exchange, provided that such investment does not exceed 5% of any class of securities of any corporation engaged in business in competition with the Company, and provided that such ownership represents a passive investment and that neither Employee nor any group of persons including Employee, in any way, either directly or indirectly, manages or exercises control of any such corporation, guarantees any of its financial obligations, otherwise takes any part in its business, other than exercising Employee's rights as a shareholder, or seeks to do any of the foregoing. b. Employee acknowledges that during the Term, Employee will have access to confidential information of the Company, including plans for future developments, and information about costs, customers, potential customers, profits, markets, sales, products, key personnel, pricing policies, operational methods, technical processes and other business affairs and methods and other information not available to the public or in the public domain (hereinafter referred to as "Confidential Information"). In recognition of the foregoing, Employee covenants and agrees that, except as required by Employee's duties to the Company, Employee will keep secret all Confidential Information and will not, directly or indirectly, either during the Term or at any time thereafter, disclose or disseminate to anyone or make use of, for any purpose whatsoever, any Confidential Information, and upon termination of Employee's employment, Employee will promptly deliver to the Company all tangible materials containing Confidential Information (including -7-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

all copies thereof, whether prepared by Employee or others) which Employee may possess or have under Employee's control. c. Employee represents (i) that Employee's experience and capabilities are such that the restrictions contained herein will not prevent Employee from obtaining employment or otherwise earning a living at the same general economic benefit as reasonably required by Employee and (ii) that Employee has, prior to the execution of this Agreement, reviewed this Agreement thoroughly with Employee's legal counsel. d. Employee acknowledges that the services to be rendered by Employee are special, unique and extraordinary, that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and that the Company and Parent would not have entered into the Tender Offer Agreement in the absence of such restrictions. By reason of the foregoing, Employee consents and agrees that if Employee violates any of the provisions of this Section 9, the Company would sustain irreparable harm and, therefore, irrevocably and unconditionally agrees that in addition to any other remedies which the Company may have under this Agreement or otherwise, all of which remedies shall be cumulative, the Company shall be entitled to apply to any court of competent jurisdiction for preliminary and permanent injunctive relief and other equitable relief. In the event that any of the provisions of this Section 9 hereof should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law. e. Employee agrees that the Company may provide a copy of this Agreement to any business or enterprise (i) which the Employee may directly or indirectly own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing, or control of, or (ii) with which Employee may be connected with as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Employee may use or -8-

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution

permit Employee's name to be used. Employee will provide the names and addresses of any of such persons or entities as the Company may from time to time reasonably request. f. In the event of any breach or violation of the restriction contained in Section 9.a. above, the period therein specified shall abate during the time of any violation thereof and that portion remaining at the time of commencement of any violation shall not begin to run until such violation has been fully and finally cured. g. Employee acknowledges that the Company shall be the sole owner of all the results and proceeds of Employee's services hereunder, including but not limited to, all inventions, developments, enhancements, discoveries and other improvements relating to equipment, methods or processes connected with or useful to the Company's and its subsidiaries' businesses, (collectively, the "Developments"), which Developments Employee, by himself or in conjunction with any other person or entity, may conceive, make, acquire, acquire knowledge of, develop or create in connection with and during the term of or prior, to Employee's employment hereunder, free and clear of any claims by Employee (or any successor or assignee of Employee) of any kind or character whatsoever other than Employee's right to compensation hereunder. Employee hereby assigns and transfers his right, title and interest in and to all such Developments, and agrees that he shall, at the request of the Company, execute such assignments, certificates or other instruments, and do any and all other acts, as the Company from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in or to any such Developments. Employee acknowledges that any Development which may be copyrightable shall be deemed to be "work for hire." 10. Survival. The provisions of Section 9 shall survive the termination of this Agreement for any reason whatsoever. 11. Certain Additional Payments by the Company a. Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution -9-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

(or any acceleration of any payment, award, benefit or distribution) by the Company (or any of its affiliated entities) to or for the benefit of Employee (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 11) (the "Payments") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to Employee an additional payment (a "Gross-Up Payment") in an amount such that after payment by Employee of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y) the product of any deductions disallowed because of the inclusion of the Gross-Up Payment in Employee's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to those which could be disallowed because of the inclusion of the Gross- Up Payment in the Employee's adjusted gross income. Notwithstanding the foregoing provisions of this Section 11(a), if it shall be determined that Employee is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the Payments were reduced by an amount that is less than 10% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Employee without -10-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

giving rise to the Excise Tax (the "Safe Harbor Cap"), and no Gross-Up Payment shall be made to Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 8(d)(ii), unless an alternative method of reduction is elected by Employee. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced pursuant to this provision. Notwithstanding the foregoing, this Section 11 shall not apply to any stock option grant if the result of the application of such Section 11 would be to alter the basis on which compensation expense is measured for purposes of APB Opinion Number 25. b. Subject to the provisions of Section 11(a), all determinations required to be made under this Section 11, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the receipt of notice from the Company or the Employee that there has been a Payment, or such earlier time as is requested by the Company (collectively, the "Determination"). In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Employee may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder. The Gross-Up Payment under this Section 11 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines that no Excise Tax is payable by Employee, it -11-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

shall furnish Employee with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on Employee's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Employee with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made hereunder. In the event that the Employee thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of Employee. In the event the amount of the GrossUp Payment exceeds the amount necessary to reimburse the Employee for his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by Employee (to the extent he has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. Employee shall cooperate, to the extent his expenses are reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 12. Miscellaneous. a. Any notice authorized or required to be given or made by or pursuant to this Agreement shall be made in writing and either personally delivered or mailed by overnight express mail to the respective address of the party to receive such notice, which address is the one designated below the signature of such party hereto, or to such other address as a party may specify by notice to the -12-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

other parties hereto. In the event that the Company desires to terminate Employee for cause pursuant to Section 8.b. of this Agreement, the Company shall provide Employee with prompt written notice of such termination and, if requested by Employee, afford Employee a reasonable opportunity to cure such default within sixty (60) days after receipt of such notice. b. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Employee hereunder are of a personal nature and shall not be assignable or delegatable in whole or in part by Employee. c. If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction. d. No remedy conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by any party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by the party possessing the same from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion. e. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in marking proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts. -13-

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John W. Quaintance ---------------------------------John W. Quaintance

MEDQUIST INC.
/s/ David A. Cohen ----------------------------------

f. In the event of a lawsuit by either party to enforce any provisions of this Agreement, the prevailing party shall be entitled to recover reasonable costs, expenses and attorney's fees from the other party. 13. Controlling Law. The validity, interpretation, construction, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without reference to principles of conflicts of laws. Venue, for purposes of all causes of action, mediation, arbitration or other disputes shall be in Camden County, New Jersey. 14. Gender; Number. In this Agreement, words of gender may be read as masculine, feminine, or neuter, as required by context. Words of number may be read as singular or plural, as required by context. -14-

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John W. Quaintance ---------------------------------John W. Quaintance

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

CONFIDENTIAL EXHIBIT (d)(1)(P) Schedule A-2 LICENSING AGREEMENT This Agreement (the "Agreement") is made as of the 22nd day of May, 2000 by and between MedQuist Inc. ("MedQuist"), a New Jersey corporation, with its principal place of business at Five Greentree Centre, Suite 311, Marlton, NJ 08053, acting on its own behalf and on behalf of its wholly owned subsidiaries (direct and indirect) and Philips Speech Processing GmbH ("Philips"), an Austrian corporation, with its registered place of business at Computerstrasse 6, 1101 Vienna, Austria (MedQuist and Philips, each a "Party" and, collectively, the "Parties"). WITNESSETH WHEREAS, the parties hereto have executed a Tender Offer Agreement of this even date, and this Agreement shall have effect from and after the date the tender contemplated by the Tender Offer Agreement is completed (the "Effective Date"); WHEREAS, Philips has developed certain speech recognition and processing technology and is in the business of

IN WITNESS WHEREOF, Employee has hereunto set Employee's hand and the Company has caused this instrument to be duly executed as of the day and year first above written. EMPLOYEE
/s/ John W. Quaintance ---------------------------------John W. Quaintance

MEDQUIST INC.
/s/ David A. Cohen ---------------------------------Title: Chairman and Chief Executive Officer MedQuist Inc. Five Greentree Centre Suite 311 Marlton, New Jersey 08053

-15-

CONFIDENTIAL EXHIBIT (d)(1)(P) Schedule A-2 LICENSING AGREEMENT This Agreement (the "Agreement") is made as of the 22nd day of May, 2000 by and between MedQuist Inc. ("MedQuist"), a New Jersey corporation, with its principal place of business at Five Greentree Centre, Suite 311, Marlton, NJ 08053, acting on its own behalf and on behalf of its wholly owned subsidiaries (direct and indirect) and Philips Speech Processing GmbH ("Philips"), an Austrian corporation, with its registered place of business at Computerstrasse 6, 1101 Vienna, Austria (MedQuist and Philips, each a "Party" and, collectively, the "Parties"). WITNESSETH WHEREAS, the parties hereto have executed a Tender Offer Agreement of this even date, and this Agreement shall have effect from and after the date the tender contemplated by the Tender Offer Agreement is completed (the "Effective Date"); WHEREAS, Philips has developed certain speech recognition and processing technology and is in the business of licensing and further developing that technology for integration into speech enabled products and services; and WHEREAS, MedQuist is in the business of providing the Services (as defined hereinafter); and WHEREAS, Philips has developed certain software required for the use and continuous improvement of the Contexts (as defined below), together with a background lexicon database to enable the recognition of words included in such database and their automated speech-to-text transformation and MedQuist wishes to obtain a license to use such software for MedQuist's business; and 1

WHEREAS, MedQuist and Philips desire to enter into a business relationship, whereby the Parties intend to provide for the integration and use of certain Philips speech recognition technology into MedQuist's business

CONFIDENTIAL EXHIBIT (d)(1)(P) Schedule A-2 LICENSING AGREEMENT This Agreement (the "Agreement") is made as of the 22nd day of May, 2000 by and between MedQuist Inc. ("MedQuist"), a New Jersey corporation, with its principal place of business at Five Greentree Centre, Suite 311, Marlton, NJ 08053, acting on its own behalf and on behalf of its wholly owned subsidiaries (direct and indirect) and Philips Speech Processing GmbH ("Philips"), an Austrian corporation, with its registered place of business at Computerstrasse 6, 1101 Vienna, Austria (MedQuist and Philips, each a "Party" and, collectively, the "Parties"). WITNESSETH WHEREAS, the parties hereto have executed a Tender Offer Agreement of this even date, and this Agreement shall have effect from and after the date the tender contemplated by the Tender Offer Agreement is completed (the "Effective Date"); WHEREAS, Philips has developed certain speech recognition and processing technology and is in the business of licensing and further developing that technology for integration into speech enabled products and services; and WHEREAS, MedQuist is in the business of providing the Services (as defined hereinafter); and WHEREAS, Philips has developed certain software required for the use and continuous improvement of the Contexts (as defined below), together with a background lexicon database to enable the recognition of words included in such database and their automated speech-to-text transformation and MedQuist wishes to obtain a license to use such software for MedQuist's business; and 1

WHEREAS, MedQuist and Philips desire to enter into a business relationship, whereby the Parties intend to provide for the integration and use of certain Philips speech recognition technology into MedQuist's business through a cooperative effort governed by this Agreement, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows: Section 1.

WHEREAS, MedQuist and Philips desire to enter into a business relationship, whereby the Parties intend to provide for the integration and use of certain Philips speech recognition technology into MedQuist's business through a cooperative effort governed by this Agreement, subject to the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows: Section 1. Definitions 1.0 Words shall have their normally accepted meanings as employed in this Agreement. The terms "herein" and "hereof", unless specifically limited, shall have reference to the entire Agreement. The word "shall" is mandatory, the word "may" is permissive, the word "or" is not exclusive, the word "includes" and "including" are not limiting and the singular includes the plural and vice versa. The following terms shall have the described meaning. 1.1 "Agreement" shall mean this present document including, as an integral part, its appendices, initialed or signed by the Parties and attached hereto, and any modifications and updates made from time to time in accordance with the provisions hereof. 1.2 "Confidential Information" shall have the meaning set forth in Section 8 of this Agreement. 1.3 "Context" shall mean a specific speech recognition software module, which can be added to the Licensed Product, containing a specialized class of Language Resources optimized for a specific user or application group or customer (e.g. gynecologists; radiologists; Ear-Nose-Throat specialists; etc.). 1.4 "Customer(s)" shall mean any individual or entity purchasing MedQuist's Services. 2

1.5 "Derivative Works" shall have the meaning ascribed thereto in 17 U.S.C. 101 et seq. 1.6 "Documentation" shall mean all visually or electronically readable materials, in English, developed by Philips for use in connection with the Licensed Product and all revisions thereto, and new documentation issued to reflect changes made in the Licensed Products. 1.7 "Effective Date" shall mean the date set forth in the preamble of this Agreement. 1.8 "IP Rights" shall mean any patent, copyright, trade secret, trademark, design, and mask work, or other intellectual property rights. 1.9 "Language Resources" shall mean the databases of words initially provided by Philips to MedQuist which also incorporates phonetics and statistics to enable the recognition and speech-to-text transformation of words included in such database. 1.10 "Level 1 Support" shall mean support which is provided by the internal MedQuist support unit to the MedQuist operational unit in response to an initial phone call which identifies and documents a Problem and includes initial responses to such internal calls, database searches for previously reported problems, installation of Patches and Maintenance Releases and the hand off of unresolved Problems to Level 2 Support. Level 1 Support is performed by licensees themselves. 1.11 "Level 2 Support" shall mean support that includes, to the extent possible, the recreation and resolution of Problems reported to Philips and for which Philips shall initiate a resolution within a response time commensurate with the severity level described in Schedule E.. This would normally result either in a solution to the licensee by way of Patches or otherwise, or in a hand off of unresolved problems to Level 3 Support. 3

1.5 "Derivative Works" shall have the meaning ascribed thereto in 17 U.S.C. 101 et seq. 1.6 "Documentation" shall mean all visually or electronically readable materials, in English, developed by Philips for use in connection with the Licensed Product and all revisions thereto, and new documentation issued to reflect changes made in the Licensed Products. 1.7 "Effective Date" shall mean the date set forth in the preamble of this Agreement. 1.8 "IP Rights" shall mean any patent, copyright, trade secret, trademark, design, and mask work, or other intellectual property rights. 1.9 "Language Resources" shall mean the databases of words initially provided by Philips to MedQuist which also incorporates phonetics and statistics to enable the recognition and speech-to-text transformation of words included in such database. 1.10 "Level 1 Support" shall mean support which is provided by the internal MedQuist support unit to the MedQuist operational unit in response to an initial phone call which identifies and documents a Problem and includes initial responses to such internal calls, database searches for previously reported problems, installation of Patches and Maintenance Releases and the hand off of unresolved Problems to Level 2 Support. Level 1 Support is performed by licensees themselves. 1.11 "Level 2 Support" shall mean support that includes, to the extent possible, the recreation and resolution of Problems reported to Philips and for which Philips shall initiate a resolution within a response time commensurate with the severity level described in Schedule E.. This would normally result either in a solution to the licensee by way of Patches or otherwise, or in a hand off of unresolved problems to Level 3 Support. 3

1.12 "Level 3 Support" shall mean support that includes, to the extent possible, the resolution of Problems and the provision of Patches by Philips, all in accordance with good engineering practices and for which Philips shall initiate a resolution within a response time commensurate with the severity level described in Schedule E. 1.13 "Licensed Product" shall mean (i) the SpeechMagic 4.0 software, in the format developed by Philips in conjunction with which the Contexts will operate and (ii) other software tools, all as are described in Schedule A. In case a Context is added to the Licensed Product, then the term "Licensed Product" shall include that Context. 1.14 "Maintenance Release" shall mean any version of the Licensed Product, which includes a number of Patches (and sometimes minor new functionality), which is recommended by Philips to be installed by existing licensees and indicated as an increase after the decimal (e.g. 4.1, 4.2, 4.3). 1.15 "Major Release" shall mean a new version of the Licensed Product subsequent to the initial delivery in which Philips has incorporated one or more new functions, features or new technology of the Licensed Product developed by Philips and which provides a new capacity which the previous releases or versions of the Licensed Product did not have, together with new or revised Documentation which properly describes the upgraded Licensed Product and which is identified by a change in the release designation(e.g. 5.0, 6.0, 7.0). 1.16 "Object Code" shall mean computer programs for the Licensed Product assembled or compiled in magnetic or electronic binary form on software media, which are readable and usable by machines, but not generally readable by humans without reverse-assembly, reverse-compiling, or reverse- engineering the Licensed Product. 4

1.17 "Patches" shall mean solutions or workarounds to Problems reported by MedQuist or other licensees to Philips via the hotline service. 1.18 "Problem(s)" shall mean any error, problem, or defect resulting from (1) incorrect functioning of the

1.12 "Level 3 Support" shall mean support that includes, to the extent possible, the resolution of Problems and the provision of Patches by Philips, all in accordance with good engineering practices and for which Philips shall initiate a resolution within a response time commensurate with the severity level described in Schedule E. 1.13 "Licensed Product" shall mean (i) the SpeechMagic 4.0 software, in the format developed by Philips in conjunction with which the Contexts will operate and (ii) other software tools, all as are described in Schedule A. In case a Context is added to the Licensed Product, then the term "Licensed Product" shall include that Context. 1.14 "Maintenance Release" shall mean any version of the Licensed Product, which includes a number of Patches (and sometimes minor new functionality), which is recommended by Philips to be installed by existing licensees and indicated as an increase after the decimal (e.g. 4.1, 4.2, 4.3). 1.15 "Major Release" shall mean a new version of the Licensed Product subsequent to the initial delivery in which Philips has incorporated one or more new functions, features or new technology of the Licensed Product developed by Philips and which provides a new capacity which the previous releases or versions of the Licensed Product did not have, together with new or revised Documentation which properly describes the upgraded Licensed Product and which is identified by a change in the release designation(e.g. 5.0, 6.0, 7.0). 1.16 "Object Code" shall mean computer programs for the Licensed Product assembled or compiled in magnetic or electronic binary form on software media, which are readable and usable by machines, but not generally readable by humans without reverse-assembly, reverse-compiling, or reverse- engineering the Licensed Product. 4

1.17 "Patches" shall mean solutions or workarounds to Problems reported by MedQuist or other licensees to Philips via the hotline service. 1.18 "Problem(s)" shall mean any error, problem, or defect resulting from (1) incorrect functioning of the Licensed Product, or (2) an incorrect or incomplete statement or diagram in Documentation, in the case of each of (1) and (2), only if such error, problem or defect renders the Licensed Products inoperable, causes the Licensed Products to fail to meet the product description thereof (but not related to the success rate of the Licensed Product), or causes the Documentation to be inaccurate or incomplete in any material respect. 1.19 "Services" shall mean outsourced medical transcription activities provided by MedQuist to third party customers. 1.20 "Work Made for Hire" shall have the meaning ascribed thereto in 17 U.S.C. @ Sec. 101 et seq. Section 2. Scope of License Grant, Ownership and Proprietary Rights 2.1 Subject to the terms and conditions set forth in this Agreement, Philips grants to MedQuist during the term of this Agreement, a personal, non- assignable, non-transferable, indivisible, non-exclusive (except as provided herein) license, without the right to sub-license, to use the Licensed Product in Object Code and Documentation only (except as provided in Section 6) for MedQuist's internal use at its sites, solely in connection with MedQuist's network and in connection with providing Services MedQuist accepts the grants made by Philips under this Section 2.1. During the Term, as long as MedQuist is in full compliance with its obligations hereunder, 5

Philips undertakes not to grant a license of the Licensed Product and Contexts, or similar products, to a competitor of MedQuist providing outsourced medical transcription services in the USA. However, Philips

1.17 "Patches" shall mean solutions or workarounds to Problems reported by MedQuist or other licensees to Philips via the hotline service. 1.18 "Problem(s)" shall mean any error, problem, or defect resulting from (1) incorrect functioning of the Licensed Product, or (2) an incorrect or incomplete statement or diagram in Documentation, in the case of each of (1) and (2), only if such error, problem or defect renders the Licensed Products inoperable, causes the Licensed Products to fail to meet the product description thereof (but not related to the success rate of the Licensed Product), or causes the Documentation to be inaccurate or incomplete in any material respect. 1.19 "Services" shall mean outsourced medical transcription activities provided by MedQuist to third party customers. 1.20 "Work Made for Hire" shall have the meaning ascribed thereto in 17 U.S.C. @ Sec. 101 et seq. Section 2. Scope of License Grant, Ownership and Proprietary Rights 2.1 Subject to the terms and conditions set forth in this Agreement, Philips grants to MedQuist during the term of this Agreement, a personal, non- assignable, non-transferable, indivisible, non-exclusive (except as provided herein) license, without the right to sub-license, to use the Licensed Product in Object Code and Documentation only (except as provided in Section 6) for MedQuist's internal use at its sites, solely in connection with MedQuist's network and in connection with providing Services MedQuist accepts the grants made by Philips under this Section 2.1. During the Term, as long as MedQuist is in full compliance with its obligations hereunder, 5

Philips undertakes not to grant a license of the Licensed Product and Contexts, or similar products, to a competitor of MedQuist providing outsourced medical transcription services in the USA. However, Philips explicitly reserves the right to license the Licensed Product, Contexts and similar products to others, such as, but not limited to distributors and third party endusers who wish to use such products (including SpeechMagic 3.0 and 3.1) for non-outsourced medical transcription or other services. For purposes of this Agreement, the term "outsourced" means that the healthcare provider utilises medical transcriptionists that are not engaged or employed by the healthcare provider nor his hospital organisation (i.e. if a hospital records department or a doctor uses their own employees or independent contractors or so-called statutory employees for their own transcriptions and the transcription service is performed with technology owned by or licensed to the hospital or doctor, the service is not outsourced). 2.2 Nothing herein is intended to, or shall be deemed to, convey to MedQuist any title or ownership interest in the Licensed Product, the Contexts, the Documentation or any Derivative Works of any of the foregoing. MedQuist acknowledges that, as between MedQuist and Philips, Philips is and shall continue to be the owner of each of the foregoing, as it exists and as it may be altered, modified or further developed, whether or not authorized, and IP Rights associated therewith. Each Derivative Work, including portions thereof and all copies thereof, in whatever medium, fixed or embodied, shall be considered a "Work Made for Hire" and Philips shall own all right, title and interest therein. MedQuist hereby assigns, and upon creation of each Derivative Work automatically and irrevocably assigns, to Philips ownership of all of MedQuist's right, title and interest in and to such Derivative Work insofar as any such Derivative Work, by operation of law, may not be considered a "Work Made for Hire" and MedQuist hereby agrees to disclose to Philips all Derivative Works promptly upon creation during the term of this Agreement. MedQuist reserves no rights, whatsoever, in the Derivative Works. 6

2.3 MedQuist agrees not to exceed the scope of the license granted in Section 2.1 and shall not copy (except as

Philips undertakes not to grant a license of the Licensed Product and Contexts, or similar products, to a competitor of MedQuist providing outsourced medical transcription services in the USA. However, Philips explicitly reserves the right to license the Licensed Product, Contexts and similar products to others, such as, but not limited to distributors and third party endusers who wish to use such products (including SpeechMagic 3.0 and 3.1) for non-outsourced medical transcription or other services. For purposes of this Agreement, the term "outsourced" means that the healthcare provider utilises medical transcriptionists that are not engaged or employed by the healthcare provider nor his hospital organisation (i.e. if a hospital records department or a doctor uses their own employees or independent contractors or so-called statutory employees for their own transcriptions and the transcription service is performed with technology owned by or licensed to the hospital or doctor, the service is not outsourced). 2.2 Nothing herein is intended to, or shall be deemed to, convey to MedQuist any title or ownership interest in the Licensed Product, the Contexts, the Documentation or any Derivative Works of any of the foregoing. MedQuist acknowledges that, as between MedQuist and Philips, Philips is and shall continue to be the owner of each of the foregoing, as it exists and as it may be altered, modified or further developed, whether or not authorized, and IP Rights associated therewith. Each Derivative Work, including portions thereof and all copies thereof, in whatever medium, fixed or embodied, shall be considered a "Work Made for Hire" and Philips shall own all right, title and interest therein. MedQuist hereby assigns, and upon creation of each Derivative Work automatically and irrevocably assigns, to Philips ownership of all of MedQuist's right, title and interest in and to such Derivative Work insofar as any such Derivative Work, by operation of law, may not be considered a "Work Made for Hire" and MedQuist hereby agrees to disclose to Philips all Derivative Works promptly upon creation during the term of this Agreement. MedQuist reserves no rights, whatsoever, in the Derivative Works. 6

2.3 MedQuist agrees not to exceed the scope of the license granted in Section 2.1 and shall not copy (except as technically necessary to use the Licensed Product in accordance with the license granted), alter, decompile, disassemble, reverse engineer or otherwise attempt to learn any source code, structure, algorithms or ideas underlying the Licensed Product, nor shall it modify, translate or create derivative works (other than as expressly permitted herein) based on the Licensed Product, except that nothing in this Section 2.3 shall preclude integration of the Licensed Product with MedQuist's technology infrastructure as contemplated by Section 3.1. 2.4 Without limiting the generality of Section 2.2 hereof, Philips is being granted full access to (a) modifications to the Contexts generated automatically in the information technology infrastructure of MedQuist, (b) medical documents in MedQuist's possession and (c) user sound data in MedQuist's possession. Philips shall also have the right to copy, modify and use such data under customary confidentiality obligations in order for Philips to improve existing Contexts and generate new ones. MedQuist will receive such Contexts on or before the date that they are generally made available to other supported licensees of Philips. In addition, MedQuist will receive during the Term on a quarterly basis a royalty of 3.5 % (three and a half percent) of the license fees received by Philips from other licensees for each Context developed on the basis of such access to MedQuist's specific, Context related information described in the first sentence of this Section 2.4, provided such Context uses text data from MedQuist 2.5 MedQuist will not delete any Trademarks, trade names or copyright notices present in or displayed by the Licensed Product. Neither party will claim any right to use any of the Trademarks of the other party except pursuant to this Agreement and its use of each Trademark will inure to the benefit of the Trademark-owning party. Neither party (i) will act in any manner that might reasonably injure the rights or goodwill of the other party with respect to the other's Trademarks, (ii) will not challenge the validity or ownership of 7

the other's Trademarks, and (iii) will protect the other's Trademarks as necessary and appropriate. MedQuist expressly acknowledges that all of Philips' Trademarks with their associated goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of Philips. Philips similarly acknowledges that all of the MedQuist Trademarks with their associate goodwill, copyrights,

2.3 MedQuist agrees not to exceed the scope of the license granted in Section 2.1 and shall not copy (except as technically necessary to use the Licensed Product in accordance with the license granted), alter, decompile, disassemble, reverse engineer or otherwise attempt to learn any source code, structure, algorithms or ideas underlying the Licensed Product, nor shall it modify, translate or create derivative works (other than as expressly permitted herein) based on the Licensed Product, except that nothing in this Section 2.3 shall preclude integration of the Licensed Product with MedQuist's technology infrastructure as contemplated by Section 3.1. 2.4 Without limiting the generality of Section 2.2 hereof, Philips is being granted full access to (a) modifications to the Contexts generated automatically in the information technology infrastructure of MedQuist, (b) medical documents in MedQuist's possession and (c) user sound data in MedQuist's possession. Philips shall also have the right to copy, modify and use such data under customary confidentiality obligations in order for Philips to improve existing Contexts and generate new ones. MedQuist will receive such Contexts on or before the date that they are generally made available to other supported licensees of Philips. In addition, MedQuist will receive during the Term on a quarterly basis a royalty of 3.5 % (three and a half percent) of the license fees received by Philips from other licensees for each Context developed on the basis of such access to MedQuist's specific, Context related information described in the first sentence of this Section 2.4, provided such Context uses text data from MedQuist 2.5 MedQuist will not delete any Trademarks, trade names or copyright notices present in or displayed by the Licensed Product. Neither party will claim any right to use any of the Trademarks of the other party except pursuant to this Agreement and its use of each Trademark will inure to the benefit of the Trademark-owning party. Neither party (i) will act in any manner that might reasonably injure the rights or goodwill of the other party with respect to the other's Trademarks, (ii) will not challenge the validity or ownership of 7

the other's Trademarks, and (iii) will protect the other's Trademarks as necessary and appropriate. MedQuist expressly acknowledges that all of Philips' Trademarks with their associated goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of Philips. Philips similarly acknowledges that all of the MedQuist Trademarks with their associate goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of MedQuist. 2.6 Each Party reserves all rights in its proprietary information and IP Rights that are not explicitly granted to the other Party under this Agreement. Nothing herein is intended to, or shall be deemed to, convey to Philips any title or ownership interest in or license to the software MedQuist licenses to its clients (whether owned by or licensed to MedQuist for sublicensing purposes). Section 3. Delivery. 3.1 Philips shall deliver the Licensed Product in Object Code form and related Documentation to MedQuist in accordance with Schedule A. MedQuist will be responsible for integrating the Licensed Product into MedQuist's existing information technology infrastructure. However, Philips will provide consultancy support to MedQuist covering integration, customization and start up activities in order to ensure the speedy and efficient introduction of this new technology. Up to fifteen man-years of such support activities is included within the initial sign up fee described in Section 4 below, to be consumed no later than December, 31 2001 on the basis of a timeschedule and workplan to be mutually agreed within 45 days after the Effective Date. In addition, as part of such sign up fee, Philips will provide Licensed Product and Level 1 Support services training sufficient in order for MedQuist's employees 8

to become familiar with the use of the Licensed Products and to be able to execute internally Level 1 Support

the other's Trademarks, and (iii) will protect the other's Trademarks as necessary and appropriate. MedQuist expressly acknowledges that all of Philips' Trademarks with their associated goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of Philips. Philips similarly acknowledges that all of the MedQuist Trademarks with their associate goodwill, copyrights, trade secrets and proprietary rights falling within the scope of this Agreement are and shall remain the property of MedQuist. 2.6 Each Party reserves all rights in its proprietary information and IP Rights that are not explicitly granted to the other Party under this Agreement. Nothing herein is intended to, or shall be deemed to, convey to Philips any title or ownership interest in or license to the software MedQuist licenses to its clients (whether owned by or licensed to MedQuist for sublicensing purposes). Section 3. Delivery. 3.1 Philips shall deliver the Licensed Product in Object Code form and related Documentation to MedQuist in accordance with Schedule A. MedQuist will be responsible for integrating the Licensed Product into MedQuist's existing information technology infrastructure. However, Philips will provide consultancy support to MedQuist covering integration, customization and start up activities in order to ensure the speedy and efficient introduction of this new technology. Up to fifteen man-years of such support activities is included within the initial sign up fee described in Section 4 below, to be consumed no later than December, 31 2001 on the basis of a timeschedule and workplan to be mutually agreed within 45 days after the Effective Date. In addition, as part of such sign up fee, Philips will provide Licensed Product and Level 1 Support services training sufficient in order for MedQuist's employees 8

to become familiar with the use of the Licensed Products and to be able to execute internally Level 1 Support services. 3.2 Subject to MedQuist's compliance with applicable Fee obligations set forth in this Agreement, Major Releases of the Licensed Product shall be added to this Agreement and delivered to MedQuist at the time such Major Releases are made available to other supported licensees of Philips at no additional cost to MedQuist. Section 4. Pricing 4.1 The initial sign up fee payable by MedQuist to Philips shall be US$ 2.25 million payable in accordance with Schedule D (but not earlier than the Effective Date). The minimum annual as well as ongoing license fees for the Licensed Product payable by MedQuist to Philips are set forth in Schedule D (the "Fees"). The Fees (including the initial sign up fee) do not include sales, use, excise and similar taxes, nor the cost of shipping or insurance, for which MedQuist is responsible. 4.2 During the term of this Agreement and any extension thereof, MedQuist shall send a statement to Philips within ten (10) days following the last day of each calendar quarter certifying, in summary form, (i) the use of the Licensed Products and the basis for the Fees calculations set forth in Schedule D hereto and (ii) the Fees due for such period. Appropriate payments for each calendar quarter shall be made within 60 days after the date of such statement, and in no event later than the last day of the calendar quarter following the quarter covered by such statement. Upon MedQuist's request, Philips shall send an invoice covering the Fees so stated. 9

4.3 MedQuist shall maintain for at least three (3) years its records, contracts and accounts relating to Licensed Product and its use thereof, and will permit examination thereof as well as access to the Licensed Product upon

to become familiar with the use of the Licensed Products and to be able to execute internally Level 1 Support services. 3.2 Subject to MedQuist's compliance with applicable Fee obligations set forth in this Agreement, Major Releases of the Licensed Product shall be added to this Agreement and delivered to MedQuist at the time such Major Releases are made available to other supported licensees of Philips at no additional cost to MedQuist. Section 4. Pricing 4.1 The initial sign up fee payable by MedQuist to Philips shall be US$ 2.25 million payable in accordance with Schedule D (but not earlier than the Effective Date). The minimum annual as well as ongoing license fees for the Licensed Product payable by MedQuist to Philips are set forth in Schedule D (the "Fees"). The Fees (including the initial sign up fee) do not include sales, use, excise and similar taxes, nor the cost of shipping or insurance, for which MedQuist is responsible. 4.2 During the term of this Agreement and any extension thereof, MedQuist shall send a statement to Philips within ten (10) days following the last day of each calendar quarter certifying, in summary form, (i) the use of the Licensed Products and the basis for the Fees calculations set forth in Schedule D hereto and (ii) the Fees due for such period. Appropriate payments for each calendar quarter shall be made within 60 days after the date of such statement, and in no event later than the last day of the calendar quarter following the quarter covered by such statement. Upon MedQuist's request, Philips shall send an invoice covering the Fees so stated. 9

4.3 MedQuist shall maintain for at least three (3) years its records, contracts and accounts relating to Licensed Product and its use thereof, and will permit examination thereof as well as access to the Licensed Product upon reasonable request and during normal business hours by authorized representatives of Philips. In addition, Philips may at its own expense audit the books of account of MedQuist relating to this Agreement at the place where such books are kept, in order to investigate compliance with the payment obligations hereunder; such audits may not take place more than twice a year, unless an audit has revealed underpayments to Philips. Any such audit shall be conducted by an independent professional auditor reasonably acceptable to both parties, on at least ten (10) working days prior written notice and during normal business hours. A copy of the report made by such auditor shall be provided to both Parties at the same time. If during the course of such audit, it is discovered that any payment owed to Philips hereunder was not made or was miscalculated and the discrepancy in MedQuist's favor is five percent (5%) or more in any given period of 3 months or more (a "Payment Default"), the cost of such audit shall be borne by MedQuist. Furthermore, MedQuist shall immediately remedy such Payment Default, together with interest at the rate of 10% per annum (or such lower rate as may be the maximum allowable by law) calculated from the date such payment was due until such payment is actually made. 4.4 MedQuist shall submit to Philips, once per calendar year, a written statement by its external auditors, who shall be independent certified accountants, confirming that the quarterly statements submitted by MedQuist to Philips for the preceding calendar year, were true, complete and accurate in every respect. MedQuist shall use all commercially reasonable efforts to cause such statement to be submitted within 120 days following the end of the fiscal year. 10

4.5 For Level 2 and Level 3 Support services rendered by Philips in accordance with Schedule E, MedQuist will pay Philips fees as set forth on Schedule D. Section 5. Warranties, Indemnity and Liability Limitations

4.3 MedQuist shall maintain for at least three (3) years its records, contracts and accounts relating to Licensed Product and its use thereof, and will permit examination thereof as well as access to the Licensed Product upon reasonable request and during normal business hours by authorized representatives of Philips. In addition, Philips may at its own expense audit the books of account of MedQuist relating to this Agreement at the place where such books are kept, in order to investigate compliance with the payment obligations hereunder; such audits may not take place more than twice a year, unless an audit has revealed underpayments to Philips. Any such audit shall be conducted by an independent professional auditor reasonably acceptable to both parties, on at least ten (10) working days prior written notice and during normal business hours. A copy of the report made by such auditor shall be provided to both Parties at the same time. If during the course of such audit, it is discovered that any payment owed to Philips hereunder was not made or was miscalculated and the discrepancy in MedQuist's favor is five percent (5%) or more in any given period of 3 months or more (a "Payment Default"), the cost of such audit shall be borne by MedQuist. Furthermore, MedQuist shall immediately remedy such Payment Default, together with interest at the rate of 10% per annum (or such lower rate as may be the maximum allowable by law) calculated from the date such payment was due until such payment is actually made. 4.4 MedQuist shall submit to Philips, once per calendar year, a written statement by its external auditors, who shall be independent certified accountants, confirming that the quarterly statements submitted by MedQuist to Philips for the preceding calendar year, were true, complete and accurate in every respect. MedQuist shall use all commercially reasonable efforts to cause such statement to be submitted within 120 days following the end of the fiscal year. 10

4.5 For Level 2 and Level 3 Support services rendered by Philips in accordance with Schedule E, MedQuist will pay Philips fees as set forth on Schedule D. Section 5. Warranties, Indemnity and Liability Limitations 5.1 Schedule C sets forth the warranties and indemnification obligations of MedQuist and Philips in connection with this Agreement. Section 6. Further obligations of the Parties 6.1 In order that the relationship contemplated by this Agreement shall be mutually advantageous, and in recognition of the particular expertise and commitment necessary to properly use and support the Licensed Product, MedQuist agrees during the Term to comply with the following requirements: MedQuist shall (i) conduct business in a manner that does not reflect negatively at any time on the good name, goodwill and reputation of Philips; (ii) avoid deceptive, misleading or unethical practices that are or might be detrimental to Philips, its product or the public; (iii) make no false or misleading representations with regard to Philips or its products; (iv) not purchase, license or use a product competing with the Licensed Product during the Term; and (v) for any and all of its present and future speech technology needs, first invite Philips to submit a competitive offer. In case MedQuist is dissatisfied with such offer and subsequently receives a more attractive offer from a third party, MedQuist will afford Philips a final opportunity to match such third party offer. 11

6.2 Philips hereby grants to MedQuist a most favored customer status, meaning that in case Philips affords a third party/medical outsourcing transcription service provider outside the USA a license of the Licensed Product on terms and conditions which, taken as a whole, are more favorable to such third party than those set forth herein are to MedQuist, Philips will notify MedQuist within thirty days of agreeing to those better terms and MedQuist will then have a 30 day period to decide whether or not it wishes to replace these terms and conditions with those contained in the third party agreement.

4.5 For Level 2 and Level 3 Support services rendered by Philips in accordance with Schedule E, MedQuist will pay Philips fees as set forth on Schedule D. Section 5. Warranties, Indemnity and Liability Limitations 5.1 Schedule C sets forth the warranties and indemnification obligations of MedQuist and Philips in connection with this Agreement. Section 6. Further obligations of the Parties 6.1 In order that the relationship contemplated by this Agreement shall be mutually advantageous, and in recognition of the particular expertise and commitment necessary to properly use and support the Licensed Product, MedQuist agrees during the Term to comply with the following requirements: MedQuist shall (i) conduct business in a manner that does not reflect negatively at any time on the good name, goodwill and reputation of Philips; (ii) avoid deceptive, misleading or unethical practices that are or might be detrimental to Philips, its product or the public; (iii) make no false or misleading representations with regard to Philips or its products; (iv) not purchase, license or use a product competing with the Licensed Product during the Term; and (v) for any and all of its present and future speech technology needs, first invite Philips to submit a competitive offer. In case MedQuist is dissatisfied with such offer and subsequently receives a more attractive offer from a third party, MedQuist will afford Philips a final opportunity to match such third party offer. 11

6.2 Philips hereby grants to MedQuist a most favored customer status, meaning that in case Philips affords a third party/medical outsourcing transcription service provider outside the USA a license of the Licensed Product on terms and conditions which, taken as a whole, are more favorable to such third party than those set forth herein are to MedQuist, Philips will notify MedQuist within thirty days of agreeing to those better terms and MedQuist will then have a 30 day period to decide whether or not it wishes to replace these terms and conditions with those contained in the third party agreement. 6.3 In case MedQuist wishes Philips to develop additional enhancements, modifications or features to the Licensed Product, Philips is willing to negotiate same on reasonable, commercial terms and conditions and to undertake such activities, provided the parties hereto can agree on timeschedule, workplan, pricing and licensing conditions in connection with such possible development activities. Philips shall not transfer ownership on any development work under any circumstances, but is willing to discuss extending the exclusivity hereunder to such development work or provide up to a 3 month lead time in such case. Within twenty (20) days after receiving MedQuist's request pursuant to Section 6.3., Philips shall notify MedQuist of Philips's proposed prices, timeschedule, licensing conditions and other terms and conditions for performing such development work (unless Philips has declined, as set forth hereinafter). If MedQuist provides notice ("Acceptance Notice") accepting Philips's price and other performance terms, Philips shall perform such work at the accepted price and on the accepted performance terms. If either (i) Philips declines any work requested pursuant to this Section 6.3, or (ii) MedQuist provides notice that it does not accept Philips's price and performance terms, then MedQuist may engage a third party to perform such work, provided that such third party acknowledges that it has no license or right to any part of the Licensed Product nor access to the source codes. Whenever 12

MedQuist shall use such a third party developer, Philips shall allow such third party such access to the Licensed Product as shall be reasonably necessary to complete such work and shall cooperate with such third party, provided that such access and cooperation shall be subject to such third party (i) executing reasonable and

6.2 Philips hereby grants to MedQuist a most favored customer status, meaning that in case Philips affords a third party/medical outsourcing transcription service provider outside the USA a license of the Licensed Product on terms and conditions which, taken as a whole, are more favorable to such third party than those set forth herein are to MedQuist, Philips will notify MedQuist within thirty days of agreeing to those better terms and MedQuist will then have a 30 day period to decide whether or not it wishes to replace these terms and conditions with those contained in the third party agreement. 6.3 In case MedQuist wishes Philips to develop additional enhancements, modifications or features to the Licensed Product, Philips is willing to negotiate same on reasonable, commercial terms and conditions and to undertake such activities, provided the parties hereto can agree on timeschedule, workplan, pricing and licensing conditions in connection with such possible development activities. Philips shall not transfer ownership on any development work under any circumstances, but is willing to discuss extending the exclusivity hereunder to such development work or provide up to a 3 month lead time in such case. Within twenty (20) days after receiving MedQuist's request pursuant to Section 6.3., Philips shall notify MedQuist of Philips's proposed prices, timeschedule, licensing conditions and other terms and conditions for performing such development work (unless Philips has declined, as set forth hereinafter). If MedQuist provides notice ("Acceptance Notice") accepting Philips's price and other performance terms, Philips shall perform such work at the accepted price and on the accepted performance terms. If either (i) Philips declines any work requested pursuant to this Section 6.3, or (ii) MedQuist provides notice that it does not accept Philips's price and performance terms, then MedQuist may engage a third party to perform such work, provided that such third party acknowledges that it has no license or right to any part of the Licensed Product nor access to the source codes. Whenever 12

MedQuist shall use such a third party developer, Philips shall allow such third party such access to the Licensed Product as shall be reasonably necessary to complete such work and shall cooperate with such third party, provided that such access and cooperation shall be subject to such third party (i) executing reasonable and appropriate security and confidentiality agreements with Philips, (ii) abiding by Philips' internal policies applicable to all third party developers, and (iii) agreeing to reimburse Philips for Philips' internal and out-of-pocket expenses incurred in providing such access and cooperation. 6.4 If MedQuist reasonably determines that Philips cannot or chooses not to provide changes which are required for the Licensed Product to remain in compliance with all applicable laws by thirty (30) days prior to a deadline imposed by governmental authority, MedQuist shall have the right to contract with a third party for such work or to do such work itself. The provisions of Section 6.3 relating to contracting with a third party shall apply to such a contract with a third party under this Section 6.4. Upon reasonable advance written notice to Philips, MedQuist may request, and if it so requests Philips shall use its good faith efforts to accommodate, prioritization of supporting such changes over any other software development work performed by or on behalf of Philips. 6.5 In case Philips intends to introduce speech technology applications to outsourcing service companies like MedQuist in other fields (e.g. law; insurance), it will first discuss such plans with MedQuist in order to jointly investigate whether or not MedQuist is optimally positioned to exploit such technology in such other fields as well. Section 7. Term and Termination 13

7.1 Unless earlier terminated pursuant to this Section 7, this Agreement will have an initial term of five (5) years from the Effective Date. After the expiration of the initial term, this Agreement will thereafter continue for subsequent five year terms, unless earlier terminated as provided below. Neither party will be liable for

MedQuist shall use such a third party developer, Philips shall allow such third party such access to the Licensed Product as shall be reasonably necessary to complete such work and shall cooperate with such third party, provided that such access and cooperation shall be subject to such third party (i) executing reasonable and appropriate security and confidentiality agreements with Philips, (ii) abiding by Philips' internal policies applicable to all third party developers, and (iii) agreeing to reimburse Philips for Philips' internal and out-of-pocket expenses incurred in providing such access and cooperation. 6.4 If MedQuist reasonably determines that Philips cannot or chooses not to provide changes which are required for the Licensed Product to remain in compliance with all applicable laws by thirty (30) days prior to a deadline imposed by governmental authority, MedQuist shall have the right to contract with a third party for such work or to do such work itself. The provisions of Section 6.3 relating to contracting with a third party shall apply to such a contract with a third party under this Section 6.4. Upon reasonable advance written notice to Philips, MedQuist may request, and if it so requests Philips shall use its good faith efforts to accommodate, prioritization of supporting such changes over any other software development work performed by or on behalf of Philips. 6.5 In case Philips intends to introduce speech technology applications to outsourcing service companies like MedQuist in other fields (e.g. law; insurance), it will first discuss such plans with MedQuist in order to jointly investigate whether or not MedQuist is optimally positioned to exploit such technology in such other fields as well. Section 7. Term and Termination 13

7.1 Unless earlier terminated pursuant to this Section 7, this Agreement will have an initial term of five (5) years from the Effective Date. After the expiration of the initial term, this Agreement will thereafter continue for subsequent five year terms, unless earlier terminated as provided below. Neither party will be liable for terminating this Agreement in accordance with its terms. 7.2 This Agreement can be terminated as follows:
7.2.1 Philips shall have the right to terminate this Agreement for cause immediately in the event that (i) MedQuist defaults in any payment due to Philips and such default continues for a period of thirty (30) business days after written notice to MedQuist; (ii) MedQuist fails to perform any material obligation, duty or responsibility or is in default with respect to any material term or condition undertaken by it under this Agreement and such default continues for a period of thirty (30) business days after written notice to MedQuist; or (iii) a receiver is appointed for MedQuist or its property, or it makes an assignment for the benefit of its creditors, or any proceedings are commenced by, for or against it under any bankruptcy, insolvency or debtor's relief law, or it is liquidated or dissolved. In case the tender for MedQuist shares is not consummated in accordance with the terms of the Tender Offer Agreement, this Agreement shall have no effect, unless confirmed by both the parties hereto. MedQuist shall have the right to terminate this Agreement immediately in the event that (i) Philips fails to perform any material obligation, duty or responsibility or is in default with respect to any material term or condition undertaken by it under this Agreement and such default continues for a period of thirty (30) business days after written notice to Philips; or (ii) a receiver is appointed for Philips or its property, or 14

7.2.2

7.1 Unless earlier terminated pursuant to this Section 7, this Agreement will have an initial term of five (5) years from the Effective Date. After the expiration of the initial term, this Agreement will thereafter continue for subsequent five year terms, unless earlier terminated as provided below. Neither party will be liable for terminating this Agreement in accordance with its terms. 7.2 This Agreement can be terminated as follows:
7.2.1 Philips shall have the right to terminate this Agreement for cause immediately in the event that (i) MedQuist defaults in any payment due to Philips and such default continues for a period of thirty (30) business days after written notice to MedQuist; (ii) MedQuist fails to perform any material obligation, duty or responsibility or is in default with respect to any material term or condition undertaken by it under this Agreement and such default continues for a period of thirty (30) business days after written notice to MedQuist; or (iii) a receiver is appointed for MedQuist or its property, or it makes an assignment for the benefit of its creditors, or any proceedings are commenced by, for or against it under any bankruptcy, insolvency or debtor's relief law, or it is liquidated or dissolved. In case the tender for MedQuist shares is not consummated in accordance with the terms of the Tender Offer Agreement, this Agreement shall have no effect, unless confirmed by both the parties hereto. MedQuist shall have the right to terminate this Agreement immediately in the event that (i) Philips fails to perform any material obligation, duty or responsibility or is in default with respect to any material term or condition undertaken by it under this Agreement and such default continues for a period of thirty (30) business days after written notice to Philips; or (ii) a receiver is appointed for Philips or its property, or 14

7.2.2

it makes an assignment for the benefit of its creditors, or any proceedings are commenced by, for or against it under any bankruptcy, insolvency or debtor's relief law, or it is liquidated or dissolved or (iii) Philips defaults in any payment due to MedQuist and such default continues for a period of thirty (30) days after written notice to Philips. 7.2.3 Either Party shall have the right to terminate this Agreement (both at the end of the initial term and during or at the end of any subsequent term) at its sole discretion upon at least a two (2) years prior written notice to the other Party, the first possibility to issue such notice shall be no sooner than at the end of the initial term (i.e. the term of the license will be at least 7 years).

7.3 Upon the termination of this Agreement, all fees owed by one Party to the other Party pursuant to this Agreement shall be paid within ten (10) days after the date of termination. 7.4 Upon the termination of this Agreement, all licenses granted hereunder shall terminate. Each Party shall return to the other Party, erase, or destroy all copies of the other Party's Confidential Information in its possession or reasonably obtainable and shall certify same has been done. 7.5 Sections 5, 7.3, 7.4, 8, 9 and 10 shall survive the termination of this Agreement. 15

Section 8. Confidential Information

it makes an assignment for the benefit of its creditors, or any proceedings are commenced by, for or against it under any bankruptcy, insolvency or debtor's relief law, or it is liquidated or dissolved or (iii) Philips defaults in any payment due to MedQuist and such default continues for a period of thirty (30) days after written notice to Philips. 7.2.3 Either Party shall have the right to terminate this Agreement (both at the end of the initial term and during or at the end of any subsequent term) at its sole discretion upon at least a two (2) years prior written notice to the other Party, the first possibility to issue such notice shall be no sooner than at the end of the initial term (i.e. the term of the license will be at least 7 years).

7.3 Upon the termination of this Agreement, all fees owed by one Party to the other Party pursuant to this Agreement shall be paid within ten (10) days after the date of termination. 7.4 Upon the termination of this Agreement, all licenses granted hereunder shall terminate. Each Party shall return to the other Party, erase, or destroy all copies of the other Party's Confidential Information in its possession or reasonably obtainable and shall certify same has been done. 7.5 Sections 5, 7.3, 7.4, 8, 9 and 10 shall survive the termination of this Agreement. 15

Section 8. Confidential Information 8.1 The Parties agree all information and materials received by one Party from the other Party ("Disclosing Party"), including Licensed Product, Documentation, Contexts, Language Resources, the terms of this Agreement and any information and materials about the other Party's business, product, technologies, customers, patient information and suppliers identified by the Disclosing Party as confidential and proprietary to, and trade secrets of, the other Party are referred to as "Confidential Information". 8.2 Each Party agrees to hold all Confidential Information of the Disclosing Party in strict confidence, not to disclose it to others and not to allow any unauthorized person access to it, either before or after termination of this Agreement. 8.3 Each Party agrees to restrict dissemination of the Confidential Information of the other Party to only those persons within its organization who must have access to such information to enable the Party receiving Confidential Information to perform its obligations under this Agreement. 16

8.4 A Party (the "Receiving Party") shall not be liable for the disclosure or other use of Confidential Information which (a) is in the public domain at the time of disclosure through no fault of such Receiving Party, (b) becomes rightfully known to such Receiving Party from a third party under no obligation to maintain confidentiality, (c) becomes publicly available through no fault of or failure to act by such Receiving Party in breach of this Agreement, (d) was independently developed or already known by such Receiving Party prior to the Parties having access to one another's Confidential Information, as proven with documentary evidence, or (e) is required by court order or by governmental authority to be disclosed, provided that such Receiving Party promptly notifies the Disclosing Party that it may be required to make a disclosure and uses reasonable efforts to make such disclosure subject to a protective order or confidentiality agreement. Section 9.

Section 8. Confidential Information 8.1 The Parties agree all information and materials received by one Party from the other Party ("Disclosing Party"), including Licensed Product, Documentation, Contexts, Language Resources, the terms of this Agreement and any information and materials about the other Party's business, product, technologies, customers, patient information and suppliers identified by the Disclosing Party as confidential and proprietary to, and trade secrets of, the other Party are referred to as "Confidential Information". 8.2 Each Party agrees to hold all Confidential Information of the Disclosing Party in strict confidence, not to disclose it to others and not to allow any unauthorized person access to it, either before or after termination of this Agreement. 8.3 Each Party agrees to restrict dissemination of the Confidential Information of the other Party to only those persons within its organization who must have access to such information to enable the Party receiving Confidential Information to perform its obligations under this Agreement. 16

8.4 A Party (the "Receiving Party") shall not be liable for the disclosure or other use of Confidential Information which (a) is in the public domain at the time of disclosure through no fault of such Receiving Party, (b) becomes rightfully known to such Receiving Party from a third party under no obligation to maintain confidentiality, (c) becomes publicly available through no fault of or failure to act by such Receiving Party in breach of this Agreement, (d) was independently developed or already known by such Receiving Party prior to the Parties having access to one another's Confidential Information, as proven with documentary evidence, or (e) is required by court order or by governmental authority to be disclosed, provided that such Receiving Party promptly notifies the Disclosing Party that it may be required to make a disclosure and uses reasonable efforts to make such disclosure subject to a protective order or confidentiality agreement. Section 9. Publicity 9.1 The Parties will jointly draft and approve any press release and other announcements to the public relating to the Licensed Product and the intended cooperation set forth herein; neither Party shall issue any other press release or make any other public announcement relating to this Agreement without the prior written consent of the other Party. Section 10. General Terms 10.1 This Agreement is not transferable or assignable without the prior written consent of the other Party hereto, except by merger, reorganization, consolidation, or sale of all or substantially all of the Party's assets. 17

10.2 This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York, without regard to its choice of law rules. 10.3 This Agreement, including the Schedules, contains the complete agreement between the Parties with respect to the subject matter herein and supersedes all previous and collateral agreements relating thereto. 10.4 This Agreement may only be amended and obligations under this Agreement may only be waived by a written instrument signed by both Parties. No failure or delay by any Party in exercising any right under this

8.4 A Party (the "Receiving Party") shall not be liable for the disclosure or other use of Confidential Information which (a) is in the public domain at the time of disclosure through no fault of such Receiving Party, (b) becomes rightfully known to such Receiving Party from a third party under no obligation to maintain confidentiality, (c) becomes publicly available through no fault of or failure to act by such Receiving Party in breach of this Agreement, (d) was independently developed or already known by such Receiving Party prior to the Parties having access to one another's Confidential Information, as proven with documentary evidence, or (e) is required by court order or by governmental authority to be disclosed, provided that such Receiving Party promptly notifies the Disclosing Party that it may be required to make a disclosure and uses reasonable efforts to make such disclosure subject to a protective order or confidentiality agreement. Section 9. Publicity 9.1 The Parties will jointly draft and approve any press release and other announcements to the public relating to the Licensed Product and the intended cooperation set forth herein; neither Party shall issue any other press release or make any other public announcement relating to this Agreement without the prior written consent of the other Party. Section 10. General Terms 10.1 This Agreement is not transferable or assignable without the prior written consent of the other Party hereto, except by merger, reorganization, consolidation, or sale of all or substantially all of the Party's assets. 17

10.2 This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York, without regard to its choice of law rules. 10.3 This Agreement, including the Schedules, contains the complete agreement between the Parties with respect to the subject matter herein and supersedes all previous and collateral agreements relating thereto. 10.4 This Agreement may only be amended and obligations under this Agreement may only be waived by a written instrument signed by both Parties. No failure or delay by any Party in exercising any right under this Agreement shall operate as a waiver. 10.5 Nothing contained in this Agreement shall be construed as making either Party the agent of the other Party, as granting to the other Party the right to enter into any contract on behalf of the other Party, or as establishing a partnership or a relationship of principal or agent between the Parties. 10.6 If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. 10.7 The headings of sections, portions or paragraphs of the Agreement are for convenience only and shall not affect the interpretation of the respective rights and obligations of the Parties. 10.8 Neither Party shall be liable on account of or lose its rights under this Agreement because of any delay or failure in performance (other than payment) caused by governmental restrictions, war, civil commotion, riots, strikes, lock outs and acts of God such as fire and flood or other similar cases that are beyond the control of the Parties. 18
10.9 All notices, consents and approvals given under this Agreement shall be

10.2 This Agreement shall be governed by and construed in accordance with the domestic laws of the State of New York, without regard to its choice of law rules. 10.3 This Agreement, including the Schedules, contains the complete agreement between the Parties with respect to the subject matter herein and supersedes all previous and collateral agreements relating thereto. 10.4 This Agreement may only be amended and obligations under this Agreement may only be waived by a written instrument signed by both Parties. No failure or delay by any Party in exercising any right under this Agreement shall operate as a waiver. 10.5 Nothing contained in this Agreement shall be construed as making either Party the agent of the other Party, as granting to the other Party the right to enter into any contract on behalf of the other Party, or as establishing a partnership or a relationship of principal or agent between the Parties. 10.6 If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. 10.7 The headings of sections, portions or paragraphs of the Agreement are for convenience only and shall not affect the interpretation of the respective rights and obligations of the Parties. 10.8 Neither Party shall be liable on account of or lose its rights under this Agreement because of any delay or failure in performance (other than payment) caused by governmental restrictions, war, civil commotion, riots, strikes, lock outs and acts of God such as fire and flood or other similar cases that are beyond the control of the Parties. 18
10.9 All notices, consents and approvals given under this Agreement shall be in writing and shall be delivered in person, by first class or express mail or by facsimile confirmed by telephone to the address set forth

below:
If to Philips: Philips Speech Processing GmbH Computerstrasse 6 A-1101 Vienna, Austria Facsimile: + 43.1.602-3359 with a copy to: Office of the General Counsel Philips Speech Processing 64 Perimeter Center East, Atlanta, Georgia 31146-467300 Facsimile: (770) 821-2700 If to MedQuist: MedQuist Inc. Five Greentree Centre, Suite 311 Marlton, NJ 08053 Facsimile: (856) 596-3351

Office of the General Counsel MedQuist, inc. Five Greentree Centre, Suite 311 Marlton, NJ 08053 Facsimile: (856)797-5949

or at such other address as either Party may from time to time advise the other Party in accordance herewith. 10.10 In no event shall Philips have any liability under this Agreement including but not limited to direct or indirect damages of any kind or nature, in the aggregate, in excess of the payments actually received by Philips under this Agreement, whether arising by contract, tort, strict liability or otherwise and in no event shall either party be liable for any indirect damages, including any consequential (including, but not limited to, loss of profits or 19

10.9

All notices, consents and approvals given under this Agreement shall be in writing and shall be delivered in person, by first class or express mail or by facsimile confirmed by telephone to the address set forth

below:
If to Philips: Philips Speech Processing GmbH Computerstrasse 6 A-1101 Vienna, Austria Facsimile: + 43.1.602-3359 with a copy to: Office of the General Counsel Philips Speech Processing 64 Perimeter Center East, Atlanta, Georgia 31146-467300 Facsimile: (770) 821-2700 If to MedQuist: MedQuist Inc. Five Greentree Centre, Suite 311 Marlton, NJ 08053 Facsimile: (856) 596-3351

Office of the General Counsel MedQuist, inc. Five Greentree Centre, Suite 311 Marlton, NJ 08053 Facsimile: (856)797-5949

or at such other address as either Party may from time to time advise the other Party in accordance herewith. 10.10 In no event shall Philips have any liability under this Agreement including but not limited to direct or indirect damages of any kind or nature, in the aggregate, in excess of the payments actually received by Philips under this Agreement, whether arising by contract, tort, strict liability or otherwise and in no event shall either party be liable for any indirect damages, including any consequential (including, but not limited to, loss of profits or 19

revenues, loss of use of or damage to any associated equipment, cost of capital, cost of substitute products, facilities or services, downtime cost, or claims of customer), special, indirect or incidental damages. 10.11 This Agreement may be executed in several counterparts, all of which taken together shall constitute one single Agreement between the Parties. The parties agree to accept facsimile signatures with originals being exchanged afterwards. Section 11. Dispute Resolution -----------------11.1 General. Except as otherwise provided in this Agreement, disputes between ------Philips and MedQuist relating to the interpretation or application of this provisions of this Agreement shall be resolved in accordance with this Section 11. Informal Dispute Resolution. Any dispute between the parties arising out --------------------------of or with respect to this Agreement, either with respect to the interpretation of any provision of this Agreement or with respect to the performance by Philips or MedQuist, shall be resolved as provided in this Section 11.2. Prior to the initiation of formal dispute resolution procedures, the parties shall first attempt to resolve their dispute informally, as follows: (A) Representatives for each party (designated within 30 days after notice of the dispute is given (the "Representatives")) shall meet for the purpose of endeavoring to resolve such dispute. They shall meet as often as the parties reasonably deem necessary in order to gather and furnish to the other all information with respect to the matter in issue which the parties believe to be appropriate and

11.2

revenues, loss of use of or damage to any associated equipment, cost of capital, cost of substitute products, facilities or services, downtime cost, or claims of customer), special, indirect or incidental damages. 10.11 This Agreement may be executed in several counterparts, all of which taken together shall constitute one single Agreement between the Parties. The parties agree to accept facsimile signatures with originals being exchanged afterwards. Section 11. Dispute Resolution -----------------11.1 General. Except as otherwise provided in this Agreement, disputes between ------Philips and MedQuist relating to the interpretation or application of this provisions of this Agreement shall be resolved in accordance with this Section 11. Informal Dispute Resolution. Any dispute between the parties arising out --------------------------of or with respect to this Agreement, either with respect to the interpretation of any provision of this Agreement or with respect to the performance by Philips or MedQuist, shall be resolved as provided in this Section 11.2. Prior to the initiation of formal dispute resolution procedures, the parties shall first attempt to resolve their dispute informally, as follows: (A) Representatives for each party (designated within 30 days after notice of the dispute is given (the "Representatives")) shall meet for the purpose of endeavoring to resolve such dispute. They shall meet as often as the parties reasonably deem necessary in order to gather and furnish to the other all information with respect to the matter in issue which the parties believe to be appropriate and germane in connection with its resolution. The 20

11.2

Representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. If, within fifteen (15) days after a matter has been identified for resolution pursuant to this Section 11.2, either of the Representatives concludes in good faith that amicable resolution through continued negotiation by them does not appear likely, the matter shall be referred to the Supervisory Committee of the Board of Directors of MedQuist upon formal written notification to such effect by either Representative (provided such Supervisory Committee is then in existence), in an attempt to mediate the dispute; in case such mediation fails, the matter will be escalated by formal written notification to the respective chief executive officers of the Parties. The parties will use their respective best efforts to cause the MedQuist CEO and the Philips CEO to meet to attempt to resolve the dispute. Formal proceedings for the resolution of a dispute may not be commenced until the earlier of: (i) the date on which the MedQuist CEO and the Philips CEO conclude in good faith that amicable resolution through continued negotiation of the matter does not appear likely; or (ii) thirty (30) days after the dispute has been referred to the MedQuist CEO and the Philips CEO. The provisions of this Section 11 shall not be construed to prevent a party from instituting, and a party is authorized to institute, formal proceedings earlier to avoid the expiration of any applicable limitations period. 11.3 Arbitration. If the parties are unable to resolve any controversy arising -----------

Representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. If, within fifteen (15) days after a matter has been identified for resolution pursuant to this Section 11.2, either of the Representatives concludes in good faith that amicable resolution through continued negotiation by them does not appear likely, the matter shall be referred to the Supervisory Committee of the Board of Directors of MedQuist upon formal written notification to such effect by either Representative (provided such Supervisory Committee is then in existence), in an attempt to mediate the dispute; in case such mediation fails, the matter will be escalated by formal written notification to the respective chief executive officers of the Parties. The parties will use their respective best efforts to cause the MedQuist CEO and the Philips CEO to meet to attempt to resolve the dispute. Formal proceedings for the resolution of a dispute may not be commenced until the earlier of: (i) the date on which the MedQuist CEO and the Philips CEO conclude in good faith that amicable resolution through continued negotiation of the matter does not appear likely; or (ii) thirty (30) days after the dispute has been referred to the MedQuist CEO and the Philips CEO. The provisions of this Section 11 shall not be construed to prevent a party from instituting, and a party is authorized to institute, formal proceedings earlier to avoid the expiration of any applicable limitations period. 11.3 Arbitration. If the parties are unable to resolve any controversy arising ----------under this Agreement as contemplated by Section 11.2, then such controversy shall be submitted to mandatory and binding arbitration at the election of either Party (the "Disputing Party") pursuant to the following conditions:

21

(i) The Disputing Party shall notify the American Arbitration Association ("AAA") and the other Party in writing describing in reasonable detail the nature of the dispute (the "Dispute Notice"). The parties shall each select a neutral arbitrator in accordance with the rules of AAA and the two (2) arbitrators selected shall select a third neutral arbitrator. The three (3) arbitrators so selected are herein referred to as the "Panel." The Panel shall allow reasonable discovery as permitted by the Federal Rules of Civil Procedure, to the extent consistent with the purpose of the arbitration. The Panel shall have no power or authority to amend or disregard any provision of this Section 11. The arbitration hearing shall be commenced promptly and conducted expeditiously, with each of Philips and MedQuist being allocated one-half of the time for the presentation of its case. Unless otherwise agreed to by the parties, an arbitration hearing shall be conducted on consecutive days. Should any arbitrator refuse or be unable to proceed with arbitration proceedings as called for by this Section, such arbitrator shall be replaced by an arbitrator selected in accordance with the rules of the AAA and consistent with this Section 11. The Panel rendering judgment upon disputes between parties as provided in this Section 11 shall, after reaching judgment and award, prepare and distribute to the parties a writing describing the findings of fact and conclusions of law relevant to such judgment and award and containing an opinion setting forth the reasons for the giving or denial of any award. The award of the arbitrator shall be final and binding on the parties, and judgment thereon may be entered in a court of competent jurisdiction. Arbitration hearings hereunder shall be held in New York, New York or other mutually agreeable location. The Panel shall be instructed that time is of the essence in the arbitration proceeding. The Panel shall render its judgment or award within fifteen (15) days following the conclusion of the hearing. Recognizing the express desire of the parties for an expeditious means of dispute 22

(i) The Disputing Party shall notify the American Arbitration Association ("AAA") and the other Party in writing describing in reasonable detail the nature of the dispute (the "Dispute Notice"). The parties shall each select a neutral arbitrator in accordance with the rules of AAA and the two (2) arbitrators selected shall select a third neutral arbitrator. The three (3) arbitrators so selected are herein referred to as the "Panel." The Panel shall allow reasonable discovery as permitted by the Federal Rules of Civil Procedure, to the extent consistent with the purpose of the arbitration. The Panel shall have no power or authority to amend or disregard any provision of this Section 11. The arbitration hearing shall be commenced promptly and conducted expeditiously, with each of Philips and MedQuist being allocated one-half of the time for the presentation of its case. Unless otherwise agreed to by the parties, an arbitration hearing shall be conducted on consecutive days. Should any arbitrator refuse or be unable to proceed with arbitration proceedings as called for by this Section, such arbitrator shall be replaced by an arbitrator selected in accordance with the rules of the AAA and consistent with this Section 11. The Panel rendering judgment upon disputes between parties as provided in this Section 11 shall, after reaching judgment and award, prepare and distribute to the parties a writing describing the findings of fact and conclusions of law relevant to such judgment and award and containing an opinion setting forth the reasons for the giving or denial of any award. The award of the arbitrator shall be final and binding on the parties, and judgment thereon may be entered in a court of competent jurisdiction. Arbitration hearings hereunder shall be held in New York, New York or other mutually agreeable location. The Panel shall be instructed that time is of the essence in the arbitration proceeding. The Panel shall render its judgment or award within fifteen (15) days following the conclusion of the hearing. Recognizing the express desire of the parties for an expeditious means of dispute 22
resolution, the Panel shall limit or allow the parties to expand the scope of discovery as may be reasonable under the circumstances. 11.4 Litigation. In the event of a breach of the confidentiality obligations ---------set forth in this Agreement, or in the event a party makes a good faith determination that a breach of the terms of this Agreement by the other party is such that the damages to such party resulting from the breach will be so immediate, so large or severe, and so incapable of adequate redress after the fact that a temporary restraining order or other immediate injunctive relief is a necessary remedy, then such party may file a pleading with a court seeking immediate injunctive relief. If a party files a pleading with a court seeking immediate injunctive relief and this pleading is challenged by the other party and the injunctive relief sought is not awarded in substantial part (or in the event of a temporary restraining order is vacated upon challenge by the other party), the party filing the pleading seeking immediate injunctive relief shall pay all of the costs and attorneys' fees of the party successfully challenging the pleading. Philips and MedQuist each consent to venue in New York, New York and to the nonexclusive jurisdiction of competent New York state courts or federal courts located in New York, for all litigation which may be brought, subject to the requirement for arbitration hereunder, with respect to the terms of, and the transactions and relationships contemplated by, this Agreement.

23

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives. PHILIPS SPEECH PROCESSING GmbH MedQuist Inc.
By: /s/ C. Vohringer ____________________________ Name: C. Vohringer By: /s/ David A. Cohen ____________________________ Name: David A. Cohen

resolution, the Panel shall limit or allow the parties to expand the scope of discovery as may be reasonable under the circumstances. 11.4 Litigation. In the event of a breach of the confidentiality obligations ---------set forth in this Agreement, or in the event a party makes a good faith determination that a breach of the terms of this Agreement by the other party is such that the damages to such party resulting from the breach will be so immediate, so large or severe, and so incapable of adequate redress after the fact that a temporary restraining order or other immediate injunctive relief is a necessary remedy, then such party may file a pleading with a court seeking immediate injunctive relief. If a party files a pleading with a court seeking immediate injunctive relief and this pleading is challenged by the other party and the injunctive relief sought is not awarded in substantial part (or in the event of a temporary restraining order is vacated upon challenge by the other party), the party filing the pleading seeking immediate injunctive relief shall pay all of the costs and attorneys' fees of the party successfully challenging the pleading. Philips and MedQuist each consent to venue in New York, New York and to the nonexclusive jurisdiction of competent New York state courts or federal courts located in New York, for all litigation which may be brought, subject to the requirement for arbitration hereunder, with respect to the terms of, and the transactions and relationships contemplated by, this Agreement.

23

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives. PHILIPS SPEECH PROCESSING GmbH MedQuist Inc.
By: /s/ C. Vohringer ____________________________ Name: C. Vohringer Title: General Manager By: /s/ David A. Cohen ____________________________ Name: David A. Cohen Title: Chief Executive Officer

24

SCHEDULE "A" List of Licensed Product, Contexts and Documentation SpeechMagic 4.0 and future Major Releases All Philips proprietary Contexts The Context Customization Tool 25

SCHEDULE "B" Description of Philips Trademarks The terms and conditions under which MedQuist can use the trademarks indicated below in accordance with Corporate Guidelines will be communicated separately to MedQuist by the Royal Philips Electronics, Corporate Intellectual Property Dept. within thirty days of the Effective Date 26

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives. PHILIPS SPEECH PROCESSING GmbH MedQuist Inc.
By: /s/ C. Vohringer ____________________________ Name: C. Vohringer Title: General Manager By: /s/ David A. Cohen ____________________________ Name: David A. Cohen Title: Chief Executive Officer

24

SCHEDULE "A" List of Licensed Product, Contexts and Documentation SpeechMagic 4.0 and future Major Releases All Philips proprietary Contexts The Context Customization Tool 25

SCHEDULE "B" Description of Philips Trademarks The terms and conditions under which MedQuist can use the trademarks indicated below in accordance with Corporate Guidelines will be communicated separately to MedQuist by the Royal Philips Electronics, Corporate Intellectual Property Dept. within thirty days of the Effective Date 26

SCHEDULE "C" Warranties, Indemnification and Limitation on Liability Provisions 1. Warranties of Both Parties. 1.1 As a material inducement to the other Party to enter into this Agreement, each of the Parties warrants to the other that: (i) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and it is in good standing and qualified to do business in every jurisdiction where the nature of its business or the lease or ownership of property requires it to be so qualified or where failure to so qualify may materially affect its ability to perform its obligations hereunder; (ii) it has the full power and authority to execute, deliver and perform this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Party and is its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other similar laws affecting creditors' rights generally, or by general principles of equity; (iv) its obligations hereunder shall be performed by personnel with the requisite skill, training, experience and abilities to perform such obligations hereunder in a diligent and professional manner; and

SCHEDULE "A" List of Licensed Product, Contexts and Documentation SpeechMagic 4.0 and future Major Releases All Philips proprietary Contexts The Context Customization Tool 25

SCHEDULE "B" Description of Philips Trademarks The terms and conditions under which MedQuist can use the trademarks indicated below in accordance with Corporate Guidelines will be communicated separately to MedQuist by the Royal Philips Electronics, Corporate Intellectual Property Dept. within thirty days of the Effective Date 26

SCHEDULE "C" Warranties, Indemnification and Limitation on Liability Provisions 1. Warranties of Both Parties. 1.1 As a material inducement to the other Party to enter into this Agreement, each of the Parties warrants to the other that: (i) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and it is in good standing and qualified to do business in every jurisdiction where the nature of its business or the lease or ownership of property requires it to be so qualified or where failure to so qualify may materially affect its ability to perform its obligations hereunder; (ii) it has the full power and authority to execute, deliver and perform this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Party and is its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other similar laws affecting creditors' rights generally, or by general principles of equity; (iv) its obligations hereunder shall be performed by personnel with the requisite skill, training, experience and abilities to perform such obligations hereunder in a diligent and professional manner; and (v) its performance hereunder shall not violate or be in conflict with (a) its 27

governing documents, (b) any judgment, decree or order to which it is a party, (c) any agreement, contract, understanding, indenture or other instrument to which it is a party, or (d) any applicable law, rule or regulation. 2. Additional Philips' Warranties. 2.1 Philips further warrants that: (i) as of the date of this Agreement, it is not involved in any litigation where a claim of patent, copyright or trade

SCHEDULE "B" Description of Philips Trademarks The terms and conditions under which MedQuist can use the trademarks indicated below in accordance with Corporate Guidelines will be communicated separately to MedQuist by the Royal Philips Electronics, Corporate Intellectual Property Dept. within thirty days of the Effective Date 26

SCHEDULE "C" Warranties, Indemnification and Limitation on Liability Provisions 1. Warranties of Both Parties. 1.1 As a material inducement to the other Party to enter into this Agreement, each of the Parties warrants to the other that: (i) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and it is in good standing and qualified to do business in every jurisdiction where the nature of its business or the lease or ownership of property requires it to be so qualified or where failure to so qualify may materially affect its ability to perform its obligations hereunder; (ii) it has the full power and authority to execute, deliver and perform this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Party and is its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other similar laws affecting creditors' rights generally, or by general principles of equity; (iv) its obligations hereunder shall be performed by personnel with the requisite skill, training, experience and abilities to perform such obligations hereunder in a diligent and professional manner; and (v) its performance hereunder shall not violate or be in conflict with (a) its 27

governing documents, (b) any judgment, decree or order to which it is a party, (c) any agreement, contract, understanding, indenture or other instrument to which it is a party, or (d) any applicable law, rule or regulation. 2. Additional Philips' Warranties. 2.1 Philips further warrants that: (i) as of the date of this Agreement, it is not involved in any litigation where a claim of patent, copyright or trade secret infringement has been made against the Licensed Product; and (ii) the Intellectual Property Department of Philips Electronics North America Corporation is responsible for intellectual property matters of Philips in the United States and that, as of the date of this Agreement, the Intellectual Property Department has not received any assertions, threats, or claims from any third party that the Licensed Product infringes any IP Rights of any third party. 3. Indemnification. 3.1 Philips Indemnification. Subject to the provision set forth herein below, Philips shall defend, at its expense,

SCHEDULE "C" Warranties, Indemnification and Limitation on Liability Provisions 1. Warranties of Both Parties. 1.1 As a material inducement to the other Party to enter into this Agreement, each of the Parties warrants to the other that: (i) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and it is in good standing and qualified to do business in every jurisdiction where the nature of its business or the lease or ownership of property requires it to be so qualified or where failure to so qualify may materially affect its ability to perform its obligations hereunder; (ii) it has the full power and authority to execute, deliver and perform this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Party and is its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other similar laws affecting creditors' rights generally, or by general principles of equity; (iv) its obligations hereunder shall be performed by personnel with the requisite skill, training, experience and abilities to perform such obligations hereunder in a diligent and professional manner; and (v) its performance hereunder shall not violate or be in conflict with (a) its 27

governing documents, (b) any judgment, decree or order to which it is a party, (c) any agreement, contract, understanding, indenture or other instrument to which it is a party, or (d) any applicable law, rule or regulation. 2. Additional Philips' Warranties. 2.1 Philips further warrants that: (i) as of the date of this Agreement, it is not involved in any litigation where a claim of patent, copyright or trade secret infringement has been made against the Licensed Product; and (ii) the Intellectual Property Department of Philips Electronics North America Corporation is responsible for intellectual property matters of Philips in the United States and that, as of the date of this Agreement, the Intellectual Property Department has not received any assertions, threats, or claims from any third party that the Licensed Product infringes any IP Rights of any third party. 3. Indemnification. 3.1 Philips Indemnification. Subject to the provision set forth herein below, Philips shall defend, at its expense, any action brought against MedQuist based on a claim that the Licensed Product, when used in accordance with the terms of this Agreement and for its intended use, infringes a United States copyright or trademark, trade secrets, patents or other IP Rights, provided Philips is notified promptly in writing by MedQuist of the claim, is 28

given sole control of the defense and settlement for so long as it diligently pursues such defense, and is provided all reasonable assistance by MedQuist in connection therewith. Philips shall pay any costs, settlements and damages finally awarded against MedQuist in connection with the claims. If the Licensed Product is finally adjudged to so infringe, or in Philips's opinion such a claim is likely to succeed, Philips will, at its option: (i)

governing documents, (b) any judgment, decree or order to which it is a party, (c) any agreement, contract, understanding, indenture or other instrument to which it is a party, or (d) any applicable law, rule or regulation. 2. Additional Philips' Warranties. 2.1 Philips further warrants that: (i) as of the date of this Agreement, it is not involved in any litigation where a claim of patent, copyright or trade secret infringement has been made against the Licensed Product; and (ii) the Intellectual Property Department of Philips Electronics North America Corporation is responsible for intellectual property matters of Philips in the United States and that, as of the date of this Agreement, the Intellectual Property Department has not received any assertions, threats, or claims from any third party that the Licensed Product infringes any IP Rights of any third party. 3. Indemnification. 3.1 Philips Indemnification. Subject to the provision set forth herein below, Philips shall defend, at its expense, any action brought against MedQuist based on a claim that the Licensed Product, when used in accordance with the terms of this Agreement and for its intended use, infringes a United States copyright or trademark, trade secrets, patents or other IP Rights, provided Philips is notified promptly in writing by MedQuist of the claim, is 28

given sole control of the defense and settlement for so long as it diligently pursues such defense, and is provided all reasonable assistance by MedQuist in connection therewith. Philips shall pay any costs, settlements and damages finally awarded against MedQuist in connection with the claims. If the Licensed Product is finally adjudged to so infringe, or in Philips's opinion such a claim is likely to succeed, Philips will, at its option: (i) procure for MedQuist the right to continue using the Licensed Product in the USA; (ii) modify or replace the infringing Licensed Product so there is no infringement (provided the Licensed Product's performance is not materially adversely affected thereby); or (iii) refund the license fees thereof to MedQuist, less a reasonable allowance for amortization, depreciation and use. 3.2 In the case of a third party claim of infringement asserted against a Philips trademark, Philips may instruct MedQuist to use a different trademark. 3.3 Philips will have no liability for any claim of infringement of any third party IP Right that arises as a result of (i) MedQuist's use of the Licensed Product as furnished by Philips with other software, product or data if such claim would have been avoided by exclusive use of the Licensed Product, (ii) modification of the Licensed Product as furnished by Philips by anyone other than Philips if such claim would have been avoided by use of the unmodified Licensed Product; (iii) third party software or (iv) use of other than the most current release of the Licensed Product as furnished by Philips if the claim could have been avoided by the use of the most current release. Licensing of the Licensed Products by Philips does not convey any license, by implication, estoppel or otherwise, under patent claims covering combinations of the Licensed Products with other devices or elements. 3.4 THE FOREGOING STATES PHILIPS' ENTIRE LIABILITY TO MEDQUIST FOR INFRINGEMENT OF COPYRIGHTS, PATENTS, OR OTHER 29

INTELLECTUAL PROPERTY RIGHTS. SUCH LIABILITY EXTENDS ONLY TO THE ACTIVITIES OF MEDQUIST UNDER THIS AGREEMENT AND NOT TO (i) ANY USE OR OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES OR (ii) LIABILITIES INCURRED BY MEDQUIST ARISING FROM ANY OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES. IN NO EVENT SHALL PHILIPS' LIABILITY TO MEDQUIST EXCEED A SUM EQUAL TO THE TOTAL LICENSE FEES PAID BY MEDQUIST TO

given sole control of the defense and settlement for so long as it diligently pursues such defense, and is provided all reasonable assistance by MedQuist in connection therewith. Philips shall pay any costs, settlements and damages finally awarded against MedQuist in connection with the claims. If the Licensed Product is finally adjudged to so infringe, or in Philips's opinion such a claim is likely to succeed, Philips will, at its option: (i) procure for MedQuist the right to continue using the Licensed Product in the USA; (ii) modify or replace the infringing Licensed Product so there is no infringement (provided the Licensed Product's performance is not materially adversely affected thereby); or (iii) refund the license fees thereof to MedQuist, less a reasonable allowance for amortization, depreciation and use. 3.2 In the case of a third party claim of infringement asserted against a Philips trademark, Philips may instruct MedQuist to use a different trademark. 3.3 Philips will have no liability for any claim of infringement of any third party IP Right that arises as a result of (i) MedQuist's use of the Licensed Product as furnished by Philips with other software, product or data if such claim would have been avoided by exclusive use of the Licensed Product, (ii) modification of the Licensed Product as furnished by Philips by anyone other than Philips if such claim would have been avoided by use of the unmodified Licensed Product; (iii) third party software or (iv) use of other than the most current release of the Licensed Product as furnished by Philips if the claim could have been avoided by the use of the most current release. Licensing of the Licensed Products by Philips does not convey any license, by implication, estoppel or otherwise, under patent claims covering combinations of the Licensed Products with other devices or elements. 3.4 THE FOREGOING STATES PHILIPS' ENTIRE LIABILITY TO MEDQUIST FOR INFRINGEMENT OF COPYRIGHTS, PATENTS, OR OTHER 29

INTELLECTUAL PROPERTY RIGHTS. SUCH LIABILITY EXTENDS ONLY TO THE ACTIVITIES OF MEDQUIST UNDER THIS AGREEMENT AND NOT TO (i) ANY USE OR OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES OR (ii) LIABILITIES INCURRED BY MEDQUIST ARISING FROM ANY OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES. IN NO EVENT SHALL PHILIPS' LIABILITY TO MEDQUIST EXCEED A SUM EQUAL TO THE TOTAL LICENSE FEES PAID BY MEDQUIST TO PHILIPS HEREUNDER DURING A 12 MONTH PERIOD IMMEDIATELY PROCEEDING THE DATE THAT PHILIPS IS NOTIFIED IN WRITING BY MEDQUIST OF SUCH CLAIM. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, PHILIPS WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE OF WHATEVER KIND (INCLUDING, IN PARTICULAR, ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF TURNOVER OR PROFITS) SUFFERED BY MEDQUIST OR ANY OTHER PERSON AS A RESULT OF THE INFRINGEMENT OF ANY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT. 4.1 MedQuist agrees to indemnify, defend and hold harmless Philips against any suit or proceeding brought against Philips incident to any infringement or claimed infringement of any patent, copyright or other intellectual property right arising out of (i) compliance with any MedQuist furnished specification or designs; (ii) unauthorized modification of the Licensed Product or any part thereof by MedQuist; (iii) use of the Licensed Product by MedQuist in connection or combination with software or hardware not provided by Philips under this agreement, where the claim arises by the combination with the other software or hardware with which the Licensed Product is combined; (iv) the use of the Licensed Product by MedQuist in a 30

manner other than as recommended in the Documentation; or (v) the use of any non-current release of the Licensed Product by MedQuist where the current release avoids said infringement, and has been made available to MedQuist along with written notice that the current release avoids a potential issue of infringement. Subject to the limitations contained in Section 4 of this Schedule C, MedQuist shall pay all settlements and damages awarded as a final judgment by a court of competent jurisdiction, provided MedQuist is promptly notified by Philips in writing of any such claim and, at MedQuist's expense is given full and exclusive control of said suit, and

INTELLECTUAL PROPERTY RIGHTS. SUCH LIABILITY EXTENDS ONLY TO THE ACTIVITIES OF MEDQUIST UNDER THIS AGREEMENT AND NOT TO (i) ANY USE OR OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES OR (ii) LIABILITIES INCURRED BY MEDQUIST ARISING FROM ANY OTHER ACTIVITIES OF END USERS, CUSTOMERS OR OTHER THIRD PARTIES. IN NO EVENT SHALL PHILIPS' LIABILITY TO MEDQUIST EXCEED A SUM EQUAL TO THE TOTAL LICENSE FEES PAID BY MEDQUIST TO PHILIPS HEREUNDER DURING A 12 MONTH PERIOD IMMEDIATELY PROCEEDING THE DATE THAT PHILIPS IS NOTIFIED IN WRITING BY MEDQUIST OF SUCH CLAIM. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, PHILIPS WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE OF WHATEVER KIND (INCLUDING, IN PARTICULAR, ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF TURNOVER OR PROFITS) SUFFERED BY MEDQUIST OR ANY OTHER PERSON AS A RESULT OF THE INFRINGEMENT OF ANY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT. 4.1 MedQuist agrees to indemnify, defend and hold harmless Philips against any suit or proceeding brought against Philips incident to any infringement or claimed infringement of any patent, copyright or other intellectual property right arising out of (i) compliance with any MedQuist furnished specification or designs; (ii) unauthorized modification of the Licensed Product or any part thereof by MedQuist; (iii) use of the Licensed Product by MedQuist in connection or combination with software or hardware not provided by Philips under this agreement, where the claim arises by the combination with the other software or hardware with which the Licensed Product is combined; (iv) the use of the Licensed Product by MedQuist in a 30

manner other than as recommended in the Documentation; or (v) the use of any non-current release of the Licensed Product by MedQuist where the current release avoids said infringement, and has been made available to MedQuist along with written notice that the current release avoids a potential issue of infringement. Subject to the limitations contained in Section 4 of this Schedule C, MedQuist shall pay all settlements and damages awarded as a final judgment by a court of competent jurisdiction, provided MedQuist is promptly notified by Philips in writing of any such claim and, at MedQuist's expense is given full and exclusive control of said suit, and all reasonable requested assistance from Philips. 4.2 THE FOREGOING STATES MEDQUIST'S ENTIRE LIABILITY TO PHILIPS FOR INFRINGEMENT OF COPYRIGHTS, PATENTS OR OTHER PROPRIETARY RIGHTS. IN NO EVENT WILL MEDQUIST'S LIABILITY TO PHILIPS EXCEED A SUM EQUAL TO THE LICENSE FEES AND PURCHASE PRICES INVOICED TO MEDQUIST BY PHILIPS HEREUNDER DURING A 12 MONTH PERIOD IMMEDIATELY PRECEDING THE DATE MEDQUIST IS NOTIFIED IN WRITING BY PHILIPS OF SUCH A CLAIM . EXCEPT AS SPECIFICALLY PROVIDED HEREIN, MEDQUIST WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE OF WHATEVER KIND (INCLUDING, IN PARTICULAR, ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF TURNOVER OR PROFIT) SUFFERED BY PHILIPS OR ANY OTHER PERSON AS A RESULT OF THE INFRINGEMENT OF ANY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT. 5. Limited Product Warranty. 31

5.1 Philips represents, undertakes and warrants to MedQuist that the Licensed Product will perform substantially in conformance with the documentation accompanying such Licensed Product for a period of ninety (90) days from the date of shipment and acceptance of the Licensed Product and documentation by MedQuist. Philips does not, however, warrant that (a) the operation of such Licensed Product will be uninterrupted or error free; (b) the Licensed Product meets certain success rates or performance levels; nor (c) that the Licensed Product will meet the requirements of MedQuist or any third party. If the Licensed Product fails to perform substantially in conformance with the documentation accompanying the Licensed Product during the warranty period set forth herein, then Philips, upon receipt of written complaint to that effect, will undertake all commercial endeavors to

manner other than as recommended in the Documentation; or (v) the use of any non-current release of the Licensed Product by MedQuist where the current release avoids said infringement, and has been made available to MedQuist along with written notice that the current release avoids a potential issue of infringement. Subject to the limitations contained in Section 4 of this Schedule C, MedQuist shall pay all settlements and damages awarded as a final judgment by a court of competent jurisdiction, provided MedQuist is promptly notified by Philips in writing of any such claim and, at MedQuist's expense is given full and exclusive control of said suit, and all reasonable requested assistance from Philips. 4.2 THE FOREGOING STATES MEDQUIST'S ENTIRE LIABILITY TO PHILIPS FOR INFRINGEMENT OF COPYRIGHTS, PATENTS OR OTHER PROPRIETARY RIGHTS. IN NO EVENT WILL MEDQUIST'S LIABILITY TO PHILIPS EXCEED A SUM EQUAL TO THE LICENSE FEES AND PURCHASE PRICES INVOICED TO MEDQUIST BY PHILIPS HEREUNDER DURING A 12 MONTH PERIOD IMMEDIATELY PRECEDING THE DATE MEDQUIST IS NOTIFIED IN WRITING BY PHILIPS OF SUCH A CLAIM . EXCEPT AS SPECIFICALLY PROVIDED HEREIN, MEDQUIST WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE OF WHATEVER KIND (INCLUDING, IN PARTICULAR, ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF TURNOVER OR PROFIT) SUFFERED BY PHILIPS OR ANY OTHER PERSON AS A RESULT OF THE INFRINGEMENT OF ANY PATENT, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT. 5. Limited Product Warranty. 31

5.1 Philips represents, undertakes and warrants to MedQuist that the Licensed Product will perform substantially in conformance with the documentation accompanying such Licensed Product for a period of ninety (90) days from the date of shipment and acceptance of the Licensed Product and documentation by MedQuist. Philips does not, however, warrant that (a) the operation of such Licensed Product will be uninterrupted or error free; (b) the Licensed Product meets certain success rates or performance levels; nor (c) that the Licensed Product will meet the requirements of MedQuist or any third party. If the Licensed Product fails to perform substantially in conformance with the documentation accompanying the Licensed Product during the warranty period set forth herein, then Philips, upon receipt of written complaint to that effect, will undertake all commercial endeavors to correct that non-conformity in accordance with good software engineering practices, or, if unable to do so, will replace the nonconforming Licensed Product with a functionally equivalent Licensed Product. 5.2 In order to obtain service under the terms of the warranty provided in Section 5.1 hereof, before the expiration of the appropriate warranty period, MedQuist must notify Philips in writing of the defective or non-conforming item. Philips reserves the right to charge MedQuist for any and all costs incurred by Philips in connection with allegedly defective warranty claims hereunder that Philips reasonably determines not to be non-conforming or defective as described above and under such circumstances MedQuist will pay Philips such costs promptly after its receipt of an invoice therefor. 5.3 The warranty provided in Section 5.1 hereof shall not apply if failure of the Licensed Product covered by such warranty to perform substantially in conformance with the documentation accompanying the Licensed Product has resulted from accident, abuse, modification, misapplication, improper use or faulty equipment. 32

5.4 EXCEPT FOR THE LIMITED WARRANTY SPECIFIED IN 5.1 THROUGH 5.3 HEREOF, THE LICENSED PRODUCT AND SERVICES ARE PROVIDED "AS IS". FURTHERMORE, THE WARRANTIES AND REMEDIES PROVIDED BY SECTIONS 5.1 THROUGH 5.3 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, AND PHILIPS MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, ORAL OR WRITTEN. IN ADDITION PHILIPS DISCLAIMS ANY IMPLIED WARRANTIES OF INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PHILIPS SHALL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT

5.1 Philips represents, undertakes and warrants to MedQuist that the Licensed Product will perform substantially in conformance with the documentation accompanying such Licensed Product for a period of ninety (90) days from the date of shipment and acceptance of the Licensed Product and documentation by MedQuist. Philips does not, however, warrant that (a) the operation of such Licensed Product will be uninterrupted or error free; (b) the Licensed Product meets certain success rates or performance levels; nor (c) that the Licensed Product will meet the requirements of MedQuist or any third party. If the Licensed Product fails to perform substantially in conformance with the documentation accompanying the Licensed Product during the warranty period set forth herein, then Philips, upon receipt of written complaint to that effect, will undertake all commercial endeavors to correct that non-conformity in accordance with good software engineering practices, or, if unable to do so, will replace the nonconforming Licensed Product with a functionally equivalent Licensed Product. 5.2 In order to obtain service under the terms of the warranty provided in Section 5.1 hereof, before the expiration of the appropriate warranty period, MedQuist must notify Philips in writing of the defective or non-conforming item. Philips reserves the right to charge MedQuist for any and all costs incurred by Philips in connection with allegedly defective warranty claims hereunder that Philips reasonably determines not to be non-conforming or defective as described above and under such circumstances MedQuist will pay Philips such costs promptly after its receipt of an invoice therefor. 5.3 The warranty provided in Section 5.1 hereof shall not apply if failure of the Licensed Product covered by such warranty to perform substantially in conformance with the documentation accompanying the Licensed Product has resulted from accident, abuse, modification, misapplication, improper use or faulty equipment. 32

5.4 EXCEPT FOR THE LIMITED WARRANTY SPECIFIED IN 5.1 THROUGH 5.3 HEREOF, THE LICENSED PRODUCT AND SERVICES ARE PROVIDED "AS IS". FURTHERMORE, THE WARRANTIES AND REMEDIES PROVIDED BY SECTIONS 5.1 THROUGH 5.3 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, AND PHILIPS MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, ORAL OR WRITTEN. IN ADDITION PHILIPS DISCLAIMS ANY IMPLIED WARRANTIES OF INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PHILIPS SHALL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED PROFITS OR BENEFITS. NO PHILIPS AUTHORIZED REPRESENTATIVE, AGENT OR EMPLOYEE IS AUTHORIZED TO MAKE ANY MODIFICATIONS, EXTENSION OR ADDITION TO THE WARRANTIES PROVIDED IN SECTIONS 5.1 THROUGH 5.3. PHILIPS MAKES NO WARRANTY AS TO (A) DEFECTS IN LICENSED PRODUCT OTHER THAN THOSE WHICH MATERIALLY AFFECT PERFORMANCE IN ACCORDANCE WITH THE APPLICABLE PRINTED PRODUCT DOCUMENTATION MENTIONED ABOVE, AND (B) AS TO DEFECTS THAT APPEAR IN THE LICENSED PRODUCT USED IN VIOLATION OF THE LICENSE GRANTED HEREIN. 33

SCHEDULE "D" Pricing and Fees Initial Sign-up fee (15 man years, as described hereinafter) 15 x 150k US$ = 2.25 M US$ payable: 500k$ on 20 September 2000 500k$ on 20 December 2000 500k$ on 20 March 2001 250k$ on 20 June 2001 250k$ on 20 September 2001 250k$ on 20 December 2001

5.4 EXCEPT FOR THE LIMITED WARRANTY SPECIFIED IN 5.1 THROUGH 5.3 HEREOF, THE LICENSED PRODUCT AND SERVICES ARE PROVIDED "AS IS". FURTHERMORE, THE WARRANTIES AND REMEDIES PROVIDED BY SECTIONS 5.1 THROUGH 5.3 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, AND PHILIPS MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, ORAL OR WRITTEN. IN ADDITION PHILIPS DISCLAIMS ANY IMPLIED WARRANTIES OF INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PHILIPS SHALL NOT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED PROFITS OR BENEFITS. NO PHILIPS AUTHORIZED REPRESENTATIVE, AGENT OR EMPLOYEE IS AUTHORIZED TO MAKE ANY MODIFICATIONS, EXTENSION OR ADDITION TO THE WARRANTIES PROVIDED IN SECTIONS 5.1 THROUGH 5.3. PHILIPS MAKES NO WARRANTY AS TO (A) DEFECTS IN LICENSED PRODUCT OTHER THAN THOSE WHICH MATERIALLY AFFECT PERFORMANCE IN ACCORDANCE WITH THE APPLICABLE PRINTED PRODUCT DOCUMENTATION MENTIONED ABOVE, AND (B) AS TO DEFECTS THAT APPEAR IN THE LICENSED PRODUCT USED IN VIOLATION OF THE LICENSE GRANTED HEREIN. 33

SCHEDULE "D" Pricing and Fees Initial Sign-up fee (15 man years, as described hereinafter) 15 x 150k US$ = 2.25 M US$ payable: 500k$ on 20 September 2000 500k$ on 20 December 2000 500k$ on 20 March 2001 250k$ on 20 June 2001 250k$ on 20 September 2001 250k$ on 20 December 2001 2/nd/ and 3/rd/ level Support
2000: 0 2001: 1 person at 200k US$ / year 2002: 2 persons at 400k US$ / year 2003 (and onwards)-3 persons at 600k US$ / year

Support payable per Quarter, no later than by the middle of the second month License Fees License Fees are based on a per use basis following the formula below. Note: PAYROLL lines are the lines that serve as basis to pay the transcriptionists (Payroll-Line is 65 black/white characters) 34
--------------------------------------------------------------------------------------------------------Year Year 2001 Year 2002 Year 2003 Year 2004 Yea 2000 and --------------------------------------------------------------------------------------------------------Estimated Penetration of SR

SCHEDULE "D" Pricing and Fees Initial Sign-up fee (15 man years, as described hereinafter) 15 x 150k US$ = 2.25 M US$ payable: 500k$ on 20 September 2000 500k$ on 20 December 2000 500k$ on 20 March 2001 250k$ on 20 June 2001 250k$ on 20 September 2001 250k$ on 20 December 2001 2/nd/ and 3/rd/ level Support
2000: 0 2001: 1 person at 200k US$ / year 2002: 2 persons at 400k US$ / year 2003 (and onwards)-3 persons at 600k US$ / year

Support payable per Quarter, no later than by the middle of the second month License Fees License Fees are based on a per use basis following the formula below. Note: PAYROLL lines are the lines that serve as basis to pay the transcriptionists (Payroll-Line is 65 black/white characters) 34
--------------------------------------------------------------------------------------------------------Year Year 2001 Year 2002 Year 2003 Year 2004 Yea 2000 and --------------------------------------------------------------------------------------------------------Estimated Penetration of SR applied as a percentage of 0% 4 % 13 % 25 % 45 % Pay-roll lines (A) --------------------------------------------------------------------------------------------------------Cost per Pay-roll line via Speech * 500 Million Payroll Lines via Speech Recognition in a year at 0,012 US$ per Line Recognition from (a new count starts each year as from Jan. 1st) MedQuist to PSP (equals revenue to PSP) and for each Payroll Line via Speech Recognition in such year ** 500 Million Lines --------------------------------------------------------------------------------------------------------Guaranteed License 0% 75% of Estimated 75% of Estimated 50% of Estimated 25% of Estimate fees Penetration (A) Penetration (A) Penetration (A) Penetration (A) x Total Volume x Total Volume x Total Volume x Total Volume in Pay-roll in Pay-roll in Pay-roll in Pay-roll lines (both via lines (both via lines (both via lines (both via Speech Speech Speech Speech Recognition and Recognition and Recognition and Recognition and directly to directly to directly to directly to transcriptionist) transcriptionist) transcriptionist) transcriptionis in Year 2001 x in Year 2002 x in Year 2003 x in Year 2004 x Cost per line Cost per line Cost per line Cost per line formula (B) formula (B) formula (B) formula (B) ---------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------Year Year 2001 Year 2002 Year 2003 Year 2004 Yea 2000 and --------------------------------------------------------------------------------------------------------Estimated Penetration of SR applied as a percentage of 0% 4 % 13 % 25 % 45 % Pay-roll lines (A) --------------------------------------------------------------------------------------------------------Cost per Pay-roll line via Speech * 500 Million Payroll Lines via Speech Recognition in a year at 0,012 US$ per Line Recognition from (a new count starts each year as from Jan. 1st) MedQuist to PSP (equals revenue to PSP) and for each Payroll Line via Speech Recognition in such year ** 500 Million Lines --------------------------------------------------------------------------------------------------------Guaranteed License 0% 75% of Estimated 75% of Estimated 50% of Estimated 25% of Estimate fees Penetration (A) Penetration (A) Penetration (A) Penetration (A) x Total Volume x Total Volume x Total Volume x Total Volume in Pay-roll in Pay-roll in Pay-roll in Pay-roll lines (both via lines (both via lines (both via lines (both via Speech Speech Speech Speech Recognition and Recognition and Recognition and Recognition and directly to directly to directly to directly to transcriptionist) transcriptionist) transcriptionist) transcriptionis in Year 2001 x in Year 2002 x in Year 2003 x in Year 2004 x Cost per line Cost per line Cost per line Cost per line formula (B) formula (B) formula (B) formula (B) ---------------------------------------------------------------------------------------------------------

* less than ** more than Payable in advance per Q based on estimations ALL CHARGES FOR ADDITIONAL SERVICES ( e.g. development, consultancy, training etc) will be on commercial Terms &Conditions to be negotiated in good faith 15 Man years of pre-committed payment at Philips' internal, fully loaded cost basis. 35

This payment is for three kind of services: 1) Development / Project Management / Consultancy for a MedQuist optimized Correction Editor. The current Correction Editor of Philips has been developed for European circumstances and may well need to be adapted to the speed and customs (habits) of MedQuist transcriptionists who are used to using short-hand codes. (E.g. 1) if stopped at a mis-recognized word by just typing over this word, the original word disappears, preventing the correctionist from first having to delete this word, or 2) if stopped at a certain word and a period is pressed on the keyboard then this period will follow this word and the next word will be capitalized; etc.). Philips will be actively involved in the design and specification phase, and undertake the development and testing of the modifications. The jointly to be agreed specifications will serve as the input for the jointly to be agreed project plan. In the project plan also the acceptance criteria must be defined. No later than June 2000 Josef Reisinger, product manager Professional Dictation will come to MedQuist to start the Specification Process. Philips will employ new and existing resources to this Project on a dedicated basis.

This payment is for three kind of services: 1) Development / Project Management / Consultancy for a MedQuist optimized Correction Editor. The current Correction Editor of Philips has been developed for European circumstances and may well need to be adapted to the speed and customs (habits) of MedQuist transcriptionists who are used to using short-hand codes. (E.g. 1) if stopped at a mis-recognized word by just typing over this word, the original word disappears, preventing the correctionist from first having to delete this word, or 2) if stopped at a certain word and a period is pressed on the keyboard then this period will follow this word and the next word will be capitalized; etc.). Philips will be actively involved in the design and specification phase, and undertake the development and testing of the modifications. The jointly to be agreed specifications will serve as the input for the jointly to be agreed project plan. In the project plan also the acceptance criteria must be defined. No later than June 2000 Josef Reisinger, product manager Professional Dictation will come to MedQuist to start the Specification Process. Philips will employ new and existing resources to this Project on a dedicated basis. 2) Consultancy Development / Project Management / Consultancy for Integration of SR into MedQuist IT infrastructure. Although this activity is under responsibility of MedQuist, a close (technical) co-operation is needed to make sure sound- and text-files are flowing from one database to the other. Also some customizations/adaptations are expected on the Speech Recognition system to accommodate the MedQuist system. No later than June 2000 , Dieter Hoi, Development Project Leader SpeechMagic and Josef Reisinger will come to MedQuist to start planning the integration process. 3) Start-up services. In addition to the normal 2/nd/ and 3/rd/ line support Philips will provide technical expertise on site during startup time to minimize down-time risks. The best person(s) for this will be identified later. 36

The 15 man-year is a minimum commitment to Philips to be invoked before December 2001. The commitment is on so called fully loaded cost basis. When resources are needed after or in addition to the 15 man-years having been spent (a monthly report on spent time will be provided to MedQuist) or after December 2001, whichever comes first, the cost for these additional services will be on Commercial Terms and Conditions to be negotiated. 37

Schedule E SUPPORT 1. Philips offers to MedQuist Support as described in this Schedule E. Philips agrees to make available Support for a period of one year from the date of discontinuation of a certain release of the Licensed Product. In case Philips opts not to continue offering such Support services, MedQuist will receive access to the source code for

The 15 man-year is a minimum commitment to Philips to be invoked before December 2001. The commitment is on so called fully loaded cost basis. When resources are needed after or in addition to the 15 man-years having been spent (a monthly report on spent time will be provided to MedQuist) or after December 2001, whichever comes first, the cost for these additional services will be on Commercial Terms and Conditions to be negotiated. 37

Schedule E SUPPORT 1. Philips offers to MedQuist Support as described in this Schedule E. Philips agrees to make available Support for a period of one year from the date of discontinuation of a certain release of the Licensed Product. In case Philips opts not to continue offering such Support services, MedQuist will receive access to the source code for internal error correction purposes. Support shall include the following: (a) Supply of routine Patches, Maintenance Releases and Documentation updates and - corrections; (b) Problem diagnosis and resolution including Level 2 and Level 3 Support. 2. MedQuist can only obtain Support services by payment of a quarterly fee described in Schedule D. 3. If MedQuist has paid for Support services pursuant to Schedule D: (a) Upon receiving notice from the appointed MedQuist internal Level 1 Support unit of a Problem, Philips shall verbally acknowledge receipt of such notice, and confirm the same by fax or e-mail within 24 hours thereafter. Such acknowledgment shall contain a unique number identifying the particular problem for tracking purposes. Philips shall provide MedQuist with a status of any Patch, bug or error logged for MedQuist provided that MedQuist identifies the particular Problem by the tracking number assigned to it by Philips. Each Problem logged for MedQuist shall remain open until closure notification is agreed to by MedQuist. 38

(b) Philips shall provide prompt written notice to MedQuist of all defects, malfunctions, Patches, bugs, viruses, and/or other anomalies in the Licensed Products which become known to Philips, in case Philips believes that such conditions are likely to result in actual or potential degradation of the functionality or performance of the Licensed Products. (c) Philips shall make all reasonable efforts to provide a Patch for the Licensed Product(s) according to the following "restoration time" schedule: (1) Severity 1 - within four (4) normal Business hours of receipt of notice of existence of a Problem by the appointed MedQuist internal Level 1 Support unit. (2) Severity 2 - within one (1) business day of receipt of notice of existence of Problem by the appointed MedQuist internal Level 1 Support unit. (3) Severity 3 and Severity 4 - if not a Minor Release, within twenty (20) working days of acknowledging the receipt of the Problem the appointed MedQuist internal Level 1 Support unit and thereafter in all other instances resolved in a Major Release of the supported Licensed Product. (d) In the event Philips does not respond to a verifiable MedQuist reported Problem within the time schedule and guidelines, as provided for in this Schedule E or if MedQuist in MedQuist's good faith determination, believes the progress of Philips in attempting to resolve the Problem or in responding to the information request is not being made in accordance with Philips's Problem plan, then MedQuist may escalate the Problem to a higher severity level.

Schedule E SUPPORT 1. Philips offers to MedQuist Support as described in this Schedule E. Philips agrees to make available Support for a period of one year from the date of discontinuation of a certain release of the Licensed Product. In case Philips opts not to continue offering such Support services, MedQuist will receive access to the source code for internal error correction purposes. Support shall include the following: (a) Supply of routine Patches, Maintenance Releases and Documentation updates and - corrections; (b) Problem diagnosis and resolution including Level 2 and Level 3 Support. 2. MedQuist can only obtain Support services by payment of a quarterly fee described in Schedule D. 3. If MedQuist has paid for Support services pursuant to Schedule D: (a) Upon receiving notice from the appointed MedQuist internal Level 1 Support unit of a Problem, Philips shall verbally acknowledge receipt of such notice, and confirm the same by fax or e-mail within 24 hours thereafter. Such acknowledgment shall contain a unique number identifying the particular problem for tracking purposes. Philips shall provide MedQuist with a status of any Patch, bug or error logged for MedQuist provided that MedQuist identifies the particular Problem by the tracking number assigned to it by Philips. Each Problem logged for MedQuist shall remain open until closure notification is agreed to by MedQuist. 38

(b) Philips shall provide prompt written notice to MedQuist of all defects, malfunctions, Patches, bugs, viruses, and/or other anomalies in the Licensed Products which become known to Philips, in case Philips believes that such conditions are likely to result in actual or potential degradation of the functionality or performance of the Licensed Products. (c) Philips shall make all reasonable efforts to provide a Patch for the Licensed Product(s) according to the following "restoration time" schedule: (1) Severity 1 - within four (4) normal Business hours of receipt of notice of existence of a Problem by the appointed MedQuist internal Level 1 Support unit. (2) Severity 2 - within one (1) business day of receipt of notice of existence of Problem by the appointed MedQuist internal Level 1 Support unit. (3) Severity 3 and Severity 4 - if not a Minor Release, within twenty (20) working days of acknowledging the receipt of the Problem the appointed MedQuist internal Level 1 Support unit and thereafter in all other instances resolved in a Major Release of the supported Licensed Product. (d) In the event Philips does not respond to a verifiable MedQuist reported Problem within the time schedule and guidelines, as provided for in this Schedule E or if MedQuist in MedQuist's good faith determination, believes the progress of Philips in attempting to resolve the Problem or in responding to the information request is not being made in accordance with Philips's Problem plan, then MedQuist may escalate the Problem to a higher severity level. 39

5 Upon MedQuist's request and subject to availability, Philips shall furnish qualified personnel for on-site assistance to MedQuist to resolve Problems. In such event, MedQuist shall pay Philips at its then current time and materials rates, which shall be consistent with customary and reasonable industry rates therefor, for the time of such personnel and reimburse Philips for reasonable travel and living expenses of such personnel incurred in

(b) Philips shall provide prompt written notice to MedQuist of all defects, malfunctions, Patches, bugs, viruses, and/or other anomalies in the Licensed Products which become known to Philips, in case Philips believes that such conditions are likely to result in actual or potential degradation of the functionality or performance of the Licensed Products. (c) Philips shall make all reasonable efforts to provide a Patch for the Licensed Product(s) according to the following "restoration time" schedule: (1) Severity 1 - within four (4) normal Business hours of receipt of notice of existence of a Problem by the appointed MedQuist internal Level 1 Support unit. (2) Severity 2 - within one (1) business day of receipt of notice of existence of Problem by the appointed MedQuist internal Level 1 Support unit. (3) Severity 3 and Severity 4 - if not a Minor Release, within twenty (20) working days of acknowledging the receipt of the Problem the appointed MedQuist internal Level 1 Support unit and thereafter in all other instances resolved in a Major Release of the supported Licensed Product. (d) In the event Philips does not respond to a verifiable MedQuist reported Problem within the time schedule and guidelines, as provided for in this Schedule E or if MedQuist in MedQuist's good faith determination, believes the progress of Philips in attempting to resolve the Problem or in responding to the information request is not being made in accordance with Philips's Problem plan, then MedQuist may escalate the Problem to a higher severity level. 39

5 Upon MedQuist's request and subject to availability, Philips shall furnish qualified personnel for on-site assistance to MedQuist to resolve Problems. In such event, MedQuist shall pay Philips at its then current time and materials rates, which shall be consistent with customary and reasonable industry rates therefor, for the time of such personnel and reimburse Philips for reasonable travel and living expenses of such personnel incurred in rendering such assistance. 6. Severity: (a) "Severity 1" shall mean a Problem which critically impacts MedQuist's ability to continue its business in the ordinary course. (b) "Severity 2" shall mean a Problem where a major function of the supported Licensed Product is unusable and significantly impacts MedQuist's ability to do business but MedQuist's can continue to perform its business as necessary. (c) "Severity 3" shall mean a Problem which does not seriously impact MedQuist's business. (e) "Severity 4" shall mean a Problem not covered above, including supported Licensed Product enhancement requests. MedQuist will ensure that escalation to Level 2 Support is only being received by Philips from the appointed MedQuist internal Level 1 Support unit. Level 2 Support will only communicate to such appointed MedQuist internal Level 1 Support unit. 40

Exhibit (d)(1)(Q) GOVERNANCE AGREEMENT

5 Upon MedQuist's request and subject to availability, Philips shall furnish qualified personnel for on-site assistance to MedQuist to resolve Problems. In such event, MedQuist shall pay Philips at its then current time and materials rates, which shall be consistent with customary and reasonable industry rates therefor, for the time of such personnel and reimburse Philips for reasonable travel and living expenses of such personnel incurred in rendering such assistance. 6. Severity: (a) "Severity 1" shall mean a Problem which critically impacts MedQuist's ability to continue its business in the ordinary course. (b) "Severity 2" shall mean a Problem where a major function of the supported Licensed Product is unusable and significantly impacts MedQuist's ability to do business but MedQuist's can continue to perform its business as necessary. (c) "Severity 3" shall mean a Problem which does not seriously impact MedQuist's business. (e) "Severity 4" shall mean a Problem not covered above, including supported Licensed Product enhancement requests. MedQuist will ensure that escalation to Level 2 Support is only being received by Philips from the appointed MedQuist internal Level 1 Support unit. Level 2 Support will only communicate to such appointed MedQuist internal Level 1 Support unit. 40

Exhibit (d)(1)(Q) GOVERNANCE AGREEMENT Among MEDQUIST INC. and KONINKLIJKE PHILIPS ELECTRONICS N.V. Dated as of May 22, 2000

TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................... Section 1.01. Definitions......................................................................... ARTICLE II Section Section Section PURCHASES 2.01. 2.02. 2.03. AND SALES OF EQUITY SECURITIES...................................................... Purchases of Equity Securities...................................................... Transfer of Common Stock............................................................ Co-Sale Right.......................................................................

ARTICLE III CORPORATE GOVERNANCE......................................................................... Section 3.01. Composition of the Board of Directors............................................... Section 3.02. Election and Removal of Directors................................................... Section 3.03. Solicitation and Voting of Shares................................................... Section 3.04. Committees.......................................................................... Section 3.05. Certificate of Incorporation and By-Laws............................................ ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................ Section 4.01. Representations of Purchaser and the Company........................................ Section 4.02. Required Filings and Consents.......................................................

Exhibit (d)(1)(Q) GOVERNANCE AGREEMENT Among MEDQUIST INC. and KONINKLIJKE PHILIPS ELECTRONICS N.V. Dated as of May 22, 2000

TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................... Section 1.01. Definitions......................................................................... ARTICLE II Section Section Section PURCHASES 2.01. 2.02. 2.03. AND SALES OF EQUITY SECURITIES...................................................... Purchases of Equity Securities...................................................... Transfer of Common Stock............................................................ Co-Sale Right.......................................................................

ARTICLE III CORPORATE GOVERNANCE......................................................................... Section 3.01. Composition of the Board of Directors............................................... Section 3.02. Election and Removal of Directors................................................... Section 3.03. Solicitation and Voting of Shares................................................... Section 3.04. Committees.......................................................................... Section 3.05. Certificate of Incorporation and By-Laws............................................ ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................ Section 4.01. Representations of Purchaser and the Company........................................ Section 4.02. Required Filings and Consents....................................................... ARTICLE V DIRECTORS AND OFFICERS LIABILITY INSURANCE..................................................... Section 5.01. Insurance........................................................................... ARTICLE VI Section Section Section Section Section Section Section Section Section Section MISCELLANEOUS................................................................................. 6.01. Notices............................................................................. 6.02. Amendments; No Waivers.............................................................. 6.03. Severability........................................................................ 6.04. Entire Agreement; Assignment........................................................ 6.05. Parties in Interest................................................................. 6.06. Governing Law and Venue; Waiver of Jury Trial; Specific Performance................. 6.07. Headings............................................................................ 6.08. Counterparts; Facsimile............................................................. 6.09. Effective Time; Termination......................................................... 6.10. Combinations or Divisions of Equity Securities......................................

-i-

GOVERNANCE AGREEMENT GOVERNANCE AGREEMENT (this "Agreement"), dated as of May 22, 2000, between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser"), and MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, Purchaser and the Company have entered into a Tender Offer Agreement dated as of May 22, 2000 (the "Tender Offer Agreement") pursuant to which Purchaser will commence a tender offer for 22,250,327 shares of the Company's common stock, no par value (the "Common Stock"), at a price of $51.00 per share in cash net to the Seller, subject to the terms and conditions set forth in the Tender Offer Agreement (the "Tender Offer"); and

TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................................... Section 1.01. Definitions......................................................................... ARTICLE II Section Section Section PURCHASES 2.01. 2.02. 2.03. AND SALES OF EQUITY SECURITIES...................................................... Purchases of Equity Securities...................................................... Transfer of Common Stock............................................................ Co-Sale Right.......................................................................

ARTICLE III CORPORATE GOVERNANCE......................................................................... Section 3.01. Composition of the Board of Directors............................................... Section 3.02. Election and Removal of Directors................................................... Section 3.03. Solicitation and Voting of Shares................................................... Section 3.04. Committees.......................................................................... Section 3.05. Certificate of Incorporation and By-Laws............................................ ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................ Section 4.01. Representations of Purchaser and the Company........................................ Section 4.02. Required Filings and Consents....................................................... ARTICLE V DIRECTORS AND OFFICERS LIABILITY INSURANCE..................................................... Section 5.01. Insurance........................................................................... ARTICLE VI Section Section Section Section Section Section Section Section Section Section MISCELLANEOUS................................................................................. 6.01. Notices............................................................................. 6.02. Amendments; No Waivers.............................................................. 6.03. Severability........................................................................ 6.04. Entire Agreement; Assignment........................................................ 6.05. Parties in Interest................................................................. 6.06. Governing Law and Venue; Waiver of Jury Trial; Specific Performance................. 6.07. Headings............................................................................ 6.08. Counterparts; Facsimile............................................................. 6.09. Effective Time; Termination......................................................... 6.10. Combinations or Divisions of Equity Securities......................................

-i-

GOVERNANCE AGREEMENT GOVERNANCE AGREEMENT (this "Agreement"), dated as of May 22, 2000, between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser"), and MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, Purchaser and the Company have entered into a Tender Offer Agreement dated as of May 22, 2000 (the "Tender Offer Agreement") pursuant to which Purchaser will commence a tender offer for 22,250,327 shares of the Company's common stock, no par value (the "Common Stock"), at a price of $51.00 per share in cash net to the Seller, subject to the terms and conditions set forth in the Tender Offer Agreement (the "Tender Offer"); and WHEREAS, Purchaser and the Company desire to establish in this Agreement certain terms and conditions concerning the corporate governance of the Company and certain terms and conditions concerning the acquisition and disposition of securities of the Company by Purchaser and its Affiliates and Associates (each as defined in Section 1.01 below); and WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested that Purchaser enter into this Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, Purchaser and the Company hereby agree as follows: ARTICLE I DEFINITIONS

GOVERNANCE AGREEMENT GOVERNANCE AGREEMENT (this "Agreement"), dated as of May 22, 2000, between Koninklijke Philips Electronics N.V., a corporation organized under the laws of The Netherlands ("Purchaser"), and MedQuist Inc., a New Jersey corporation (the "Company"). WHEREAS, Purchaser and the Company have entered into a Tender Offer Agreement dated as of May 22, 2000 (the "Tender Offer Agreement") pursuant to which Purchaser will commence a tender offer for 22,250,327 shares of the Company's common stock, no par value (the "Common Stock"), at a price of $51.00 per share in cash net to the Seller, subject to the terms and conditions set forth in the Tender Offer Agreement (the "Tender Offer"); and WHEREAS, Purchaser and the Company desire to establish in this Agreement certain terms and conditions concerning the corporate governance of the Company and certain terms and conditions concerning the acquisition and disposition of securities of the Company by Purchaser and its Affiliates and Associates (each as defined in Section 1.01 below); and WHEREAS, to induce the Company to enter into the Tender Offer Agreement, the Company has requested that Purchaser enter into this Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, Purchaser and the Company hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms have the following meanings: (a) "Affiliate" has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. (b) "Associate" has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. (c) "Beneficial owner" and to "beneficially own" has the same meaning as in Rule 13d-3 promulgated under the Exchange Act. (d) "Board of Directors" means the entire Board of Directors of the Company, as constituted from time to time. (e) "Director" means a member of the Board of Directors. (f) "Equity Security" means any (i) Voting Stock, (ii) securities of the Company convertible into or exchangeable for Voting Stock, and (iii) options, rights, warrants and similar securities issued by the Company to purchase Voting Stock.

(g) "Exchange Act" means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as amended. (h) "Independent Director" means a director of the Company (i) who is not and has never been an officer or employee of the Company, any Affiliate or Associate of the Company, or an entity that derived 5% or more of its revenues or earnings in its most recent fiscal year from transactions involving the Company or any Affiliate or Associate of the Company, (ii) who is not and has never been an officer, employee or director of Purchaser, any Affiliate or Associate of Purchaser, or an entity that derived more than 5% of its revenues or earnings in its most recent fiscal year from transactions involving Purchaser or any Affiliate or Associate of Purchaser and (iii) who was nominated for such position by the Nominating Committee in accordance with Section 3.04(a)(i). The initial Independent Directors shall be John H. Underwood, Richard H. Stowe and A. Fred Ruttenberg.

(g) "Exchange Act" means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as amended. (h) "Independent Director" means a director of the Company (i) who is not and has never been an officer or employee of the Company, any Affiliate or Associate of the Company, or an entity that derived 5% or more of its revenues or earnings in its most recent fiscal year from transactions involving the Company or any Affiliate or Associate of the Company, (ii) who is not and has never been an officer, employee or director of Purchaser, any Affiliate or Associate of Purchaser, or an entity that derived more than 5% of its revenues or earnings in its most recent fiscal year from transactions involving Purchaser or any Affiliate or Associate of Purchaser and (iii) who was nominated for such position by the Nominating Committee in accordance with Section 3.04(a)(i). The initial Independent Directors shall be John H. Underwood, Richard H. Stowe and A. Fred Ruttenberg. (i) "Officer" has the same meaning as in Rule 16a-1(f) promulgated under the Exchange Act. (j) "SEC" means the United States Securities and Exchange Commission. (k) "Securities Act" means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as amended. (l) "Subsidiary" has the same meaning as in Rule 12b-2 promulgated under the Exchange Act. (m) "Voting Stock" means shares of capital stock of the Company (including the Common Stock) having the right to vote generally in any election of Directors. ARTICLE II PURCHASES AND SALES OF EQUITY SECURITIES Section 2.01. Purchases of Equity Securities. (a) Until the third anniversary of the Effective Time, Purchaser shall not, directly or indirectly through one or more of its Affiliates or Associates, purchase or otherwise acquire, or propose or offer to purchase or acquire, or otherwise become the beneficial owner, individually or as a member of a "group" (as defined for purposes of Section 13d of the Exchange Act), of any Equity Securities, whether by merger, consolidation, recapitalization, tender or exchange offer, market purchase, privately negotiated purchase, or otherwise, if, immediately after such transaction, Purchaser and its Affiliates or Associates would, directly or indirectly, beneficially own in excess of 75% of the then outstanding shares of Voting Stock; provided, however, that after the first anniversary of the Effective Time, subject to the receipt of the approval of the Supervisory Committee (as defined below), Purchaser or any of its Affiliates or Associates may acquire, in one transaction or in a series of related transactions, all, but not -2-

less than all, of the Equity Securities of the Company which are not then, directly or indirectly, beneficially owned by Purchaser or one or more of its Affiliates or Associates. (b) Notwithstanding the foregoing, Purchaser shall not be deemed to be in violation of this Section 2.01 if Purchaser, or its Affiliates or Associates in the aggregate, inadvertently becomes the direct or indirect beneficial owner of more than 75% of the then outstanding shares of Voting Stock and, as soon as commercially practicable, divests itself or themselves of a sufficient amount of the Equity Securities so that it or they are no longer the beneficial owner of more than 75% of the then outstanding shares of Voting Stock. Section 2.02. Transfer of Common Stock. (a) Until the first anniversary of the Effective Time, Purchaser will not, and will not permit any of its Subsidiaries to, directly or indirectly, sell, transfer or otherwise dispose of any Equity Securities beneficially owned, directly or

less than all, of the Equity Securities of the Company which are not then, directly or indirectly, beneficially owned by Purchaser or one or more of its Affiliates or Associates. (b) Notwithstanding the foregoing, Purchaser shall not be deemed to be in violation of this Section 2.01 if Purchaser, or its Affiliates or Associates in the aggregate, inadvertently becomes the direct or indirect beneficial owner of more than 75% of the then outstanding shares of Voting Stock and, as soon as commercially practicable, divests itself or themselves of a sufficient amount of the Equity Securities so that it or they are no longer the beneficial owner of more than 75% of the then outstanding shares of Voting Stock. Section 2.02. Transfer of Common Stock. (a) Until the first anniversary of the Effective Time, Purchaser will not, and will not permit any of its Subsidiaries to, directly or indirectly, sell, transfer or otherwise dispose of any Equity Securities beneficially owned, directly or indirectly, by Purchaser or its Subsidiaries except to Purchaser or to any Subsidiary of Purchaser. Until the first anniversary of the Effective Time, Purchaser will not sell, transfer or otherwise dispose of any of the capital stock (or any options or warrants to purchase capital stock or securities convertible or exchangeable for capital stock (collectively, "Derivative Equity Securities")) of any Subsidiary of Purchaser that owns Equity Securities if, as a result of such sale, transfer or other disposition, such Subsidiary would no longer be a Subsidiary, unless Purchaser shall have first caused any such Equity Securities to be transferred to another Subsidiary of Purchaser. Notwithstanding anything to the contrary contained in Section 2.02(a), Purchaser may sell, transfer or assign Equity Securities, or the capital stock or Derivative Equity Securities of its Subsidiaries, or permit any of its Subsidiaries which beneficially own Equity Securities to sell, transfer or assign such Equity Securities, so long as after giving affect to any such sales, transfers or assignments of Equity Securities, Purchaser and its Subsidiaries, beneficially own at least 60% of the then outstanding shares of Voting Stock. (b) Subject to the provisions of Section 2.03, after the first anniversary of the Effective Time, Purchaser and its Subsidiaries may sell, transfer or otherwise dispose of any of the Equity Securities beneficially owned to any person or entity. (c) Until the third anniversary of the Effective Time, each certificate evidencing outstanding Equity Securities that is beneficially owned by Purchaser or its Affiliates or Associates shall be stamped or otherwise imprinted with a legend substantially in the following form: "THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF MAY 22, 2000, A COPY OF WHICH IS AVAILABLE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE -3-

BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS HAVE BEEN COMPLIED WITH." (d) Any Affiliate or Associate of Purchaser that is a purported purchaser, transferee or other recipient of Equity Securities permitted pursuant to this Article II (other than in open-market purchases) shall, as a condition precedent to its receipt and ownership of any such Equity Securities, execute an agreement pursuant to which it becomes legally bound by this Agreement and the restrictions contained herein. (e) Proposed transfers of Equity Securities that are not in compliance with this Article II shall be of no force or effect and the Company shall not be required to recognize any such transfer or purported transfer. Section 2.03. Co-Sale Right. (a) During the period beginning on the first anniversary of the Effective Time and ending on the third anniversary of the Effective Time, Purchaser shall not enter into or consummate any transaction (or series of related transactions) involving the sale or transfer of Equity Securities (or the sale or transfer of capital stock or

BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS HAVE BEEN COMPLIED WITH." (d) Any Affiliate or Associate of Purchaser that is a purported purchaser, transferee or other recipient of Equity Securities permitted pursuant to this Article II (other than in open-market purchases) shall, as a condition precedent to its receipt and ownership of any such Equity Securities, execute an agreement pursuant to which it becomes legally bound by this Agreement and the restrictions contained herein. (e) Proposed transfers of Equity Securities that are not in compliance with this Article II shall be of no force or effect and the Company shall not be required to recognize any such transfer or purported transfer. Section 2.03. Co-Sale Right. (a) During the period beginning on the first anniversary of the Effective Time and ending on the third anniversary of the Effective Time, Purchaser shall not enter into or consummate any transaction (or series of related transactions) involving the sale or transfer of Equity Securities (or the sale or transfer of capital stock or Derivative Equity Securities of any Subsidiary which beneficially owns Equity Securities) that would result in (i) any person other than the Purchaser or any Affiliate or Associate of Purchaser beneficially owning in excess of 10% of the outstanding Voting Stock (a "Third Party Purchaser") and (ii) Purchaser and its Affiliates and Associates beneficially owning less than a majority of the then outstanding Voting Stock, unless: (i) the Third-Party Purchaser contemporaneously therewith offers to acquire, or acquires, on the same terms and conditions as are applicable to Purchaser, its Affiliates or Associates, 100% of the Voting Stock beneficially owned by persons or entities other than Purchaser, its Affiliates or Associates, or (ii) the Third-Party Purchaser offers to purchase, on the same terms and conditions as are applicable to the Purchaser, its Affiliates or Associates, pursuant to a tender or exchange offer made in accordance with applicable law, including Section 14(d)(1) and Regulation 14D of the Exchange Act, all or a specified percentage of the outstanding shares of Voting Stock; it being understood that in such event, Purchaser agrees that neither it, nor any of its Affiliates or Associates will sell to the Third Party Purchaser, its Affiliates or Associates, any shares of Voting Stock beneficially owned by it other than pursuant to such contemplated tender or exchange offer. ARTICLE III CORPORATE GOVERNANCE Section 3.01. Composition of the Board of Directors. -4-

(a) The Company shall take any and all action necessary (including by securing the resignation of persons who were Directors prior to the Effective Time) so that promptly following the Effective Time, the Board of Directors shall consist of eleven Directors, of which (i) one Director shall be the Chief Executive Officer of the Company and one Director shall be another Officer of the Company designated by the Chief Executive Officer of the Company (together, the "Management Directors"), (ii) six Directors shall be designated by Purchaser, all of whom may be directors, officers, employees, Affiliates or Associates of Purchaser (the "Purchaser Directors"), and (iii) three Directors shall be Independent Directors. From and after the time the Board of Directors has been reconstituted in accordance with the preceding sentence, the Board of Directors shall consist of eleven Directors, of which (i) two Directors shall be Management Directors, (ii) in accordance with subsection (b) below, six or fewer Directors shall be Purchaser Directors, and (iii) in accordance with subsection (c) below, three or more shall be Independent Directors; provided, however, the Board of Directors shall be empowered in its discretion to increase or decrease, from time to time, the number of Directors so long as (x) there shall be at least two Management Directors and three Independent Directors, and (y) the relative percentage of Management Directors, Independent Directors and Purchaser Directors shall be maintained, in all material respects, as in effect immediately prior to any such increase or decrease; and, provided, further, that if the Board of Directors changes the number of Directors constituting the entire Board of Directors, then the number of Directors and the percentages set forth in subsection (b) below shall be appropriately adjusted,

(a) The Company shall take any and all action necessary (including by securing the resignation of persons who were Directors prior to the Effective Time) so that promptly following the Effective Time, the Board of Directors shall consist of eleven Directors, of which (i) one Director shall be the Chief Executive Officer of the Company and one Director shall be another Officer of the Company designated by the Chief Executive Officer of the Company (together, the "Management Directors"), (ii) six Directors shall be designated by Purchaser, all of whom may be directors, officers, employees, Affiliates or Associates of Purchaser (the "Purchaser Directors"), and (iii) three Directors shall be Independent Directors. From and after the time the Board of Directors has been reconstituted in accordance with the preceding sentence, the Board of Directors shall consist of eleven Directors, of which (i) two Directors shall be Management Directors, (ii) in accordance with subsection (b) below, six or fewer Directors shall be Purchaser Directors, and (iii) in accordance with subsection (c) below, three or more shall be Independent Directors; provided, however, the Board of Directors shall be empowered in its discretion to increase or decrease, from time to time, the number of Directors so long as (x) there shall be at least two Management Directors and three Independent Directors, and (y) the relative percentage of Management Directors, Independent Directors and Purchaser Directors shall be maintained, in all material respects, as in effect immediately prior to any such increase or decrease; and, provided, further, that if the Board of Directors changes the number of Directors constituting the entire Board of Directors, then the number of Directors and the percentages set forth in subsection (b) below shall be appropriately adjusted, subject to the immediately preceding provisions. (b) Subject to subsection (a) above and subsection (c) below, the parties agree that: (i) until the first date that Purchaser and its Subsidiaries shall not beneficially own, in the aggregate, at least a majority of the outstanding Voting Stock, Purchaser shall have the right to designate six Purchaser Directors; (ii) after the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than a majority but at least 36% of the outstanding Voting Stock, Purchaser shall have the right to nominate four, but not more than four, Purchaser Directors; (iii) after the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than 36% but at least 27% of the outstanding Voting Stock, Purchaser shall have the right to nominate three, but not more than three, Purchaser Directors; (iv) after the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than 27% but at least 18% of the outstanding Voting Stock, Purchaser shall have the right to nominate two, but not more than two, Purchaser Directors; (v) after the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than 18% but at least 5% of the outstanding Voting -5-

Stock, Purchaser shall have the right to nominate one, but not more than one, Purchaser Director; and (vi) After the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than 5% of the outstanding Voting Stock, Purchaser shall have no right to nominate any Directors. (c) In the event that Purchaser shall have the right to designate less than six Directors pursuant to subsection 3.01 (b) above, the Nominating Committee shall nominate that number of additional Independent Directors as is necessary to constitute the entire Board of Directors (as constituted at such time) and Purchaser shall cause such Purchaser Directors to resign promptly so as to permit the additional Independent Directors to be appointed or elected. (d) Purchaser shall have the right to designate any replacement for a Purchaser Director at the termination of such Director's term or upon such Director's death, resignation, retirement, disqualification, removal from office or other cause, and the Chief Executive Officer of the Company shall have the right to designate any replacement for a Management Director at the termination of such Director's term or upon such Director's death, resignation, retirement, disqualification, removal from office or other cause.

Stock, Purchaser shall have the right to nominate one, but not more than one, Purchaser Director; and (vi) After the first date that Purchaser and its Subsidiaries shall beneficially own, in the aggregate, less than 5% of the outstanding Voting Stock, Purchaser shall have no right to nominate any Directors. (c) In the event that Purchaser shall have the right to designate less than six Directors pursuant to subsection 3.01 (b) above, the Nominating Committee shall nominate that number of additional Independent Directors as is necessary to constitute the entire Board of Directors (as constituted at such time) and Purchaser shall cause such Purchaser Directors to resign promptly so as to permit the additional Independent Directors to be appointed or elected. (d) Purchaser shall have the right to designate any replacement for a Purchaser Director at the termination of such Director's term or upon such Director's death, resignation, retirement, disqualification, removal from office or other cause, and the Chief Executive Officer of the Company shall have the right to designate any replacement for a Management Director at the termination of such Director's term or upon such Director's death, resignation, retirement, disqualification, removal from office or other cause. (e) No individual who is an officer, director, partner or principal stockholder of any competitor of the Company or any of its Subsidiaries shall serve as a Director; provided, however, the foregoing shall not apply to officers, directors, partners or principal stockholders of Purchaser, its Affiliates or Associates. (f) The parties hereto acknowledge that no director of the Company shall be deemed to be the deputy of, or otherwise be required to discharge his or her duties as a member of the Board of Directors under the direction of, or with special attention to the interests of, any shareholder of the Company, and each director shall be required to discharge his or her duties to all shareholders of the Company. Section 3.02. Election and Removal of Directors. In connection with the filling of any vacancy on the Board of Directors, however such vacancy shall have resulted, Purchaser shall cause each Purchaser Director to vote in favor of those Directors nominated or designated in accordance with this Article III. Purchaser shall not take any action or permit any Purchaser Director to take any action to remove any Director, other than a Purchaser Director, without cause. Section 3.03. Solicitation and Voting of Shares. (a) The Company shall use commercially reasonable efforts to solicit from the stockholders of the Company eligible to vote for the election of Directors proxies in favor of the nominees designated or nominated in accordance with this Article III. (b) Purchaser shall vote or cause to be voted all of its shares of Voting Stock beneficially owned by it or by any of its Affiliates or Associates (other than shares of Voting -6-

Stock obtained by its Affiliates (other than its Subsidiaries) or Associates in open-market purchases) in favor of nominees designated or nominated in accordance with this Article III. (c) Purchaser shall vote or cause to be voted, whether at a meeting or by execution of a written consent, all of the shares of Voting Stock beneficially owned by it or by any of its Affiliates or Associates in favor of the approval of an increase in the maximum number of shares of the Common Stock which may be issued under the Company's Incentive Stock Option Plan for Officers and Key Employees to 7,130,000 shares. Section 3.04. Committees. (a) Subject to the general oversight and authority of the full Board of Directors, the Board of Directors shall establish and, during the term of this Agreement, empower and maintain the committees of the Board of Directors contemplated by this Section 3.04:

Stock obtained by its Affiliates (other than its Subsidiaries) or Associates in open-market purchases) in favor of nominees designated or nominated in accordance with this Article III. (c) Purchaser shall vote or cause to be voted, whether at a meeting or by execution of a written consent, all of the shares of Voting Stock beneficially owned by it or by any of its Affiliates or Associates in favor of the approval of an increase in the maximum number of shares of the Common Stock which may be issued under the Company's Incentive Stock Option Plan for Officers and Key Employees to 7,130,000 shares. Section 3.04. Committees. (a) Subject to the general oversight and authority of the full Board of Directors, the Board of Directors shall establish and, during the term of this Agreement, empower and maintain the committees of the Board of Directors contemplated by this Section 3.04: (i) a Nominating Committee, responsible, among other things, for the nomination, subject to Section 3.01, of the Independent Directors and consisting solely of two Independent Directors, one Purchaser Director and one Management Director as selected by the Board of Directors from time to time; (ii) a Compensation Committee, responsible, among other things, for the adoption, amendment and administration of all employee benefit plans and arrangements and the compensation of all Officers of the Company, and consisting of two Independent Directors and two Purchaser Directors as selected by the Nominating Committee and the Purchaser, respectively, from time to time; (iii) a Supervisory Committee, responsible, among other things, for (A) the general oversight, administration, amendment and enforcement, on behalf of the Company, of (1) those provisions of the Tender Offer Agreement that survive Purchaser's purchase of shares pursuant to the Tender Offer, (2) this Agreement, and (3) that certain License Agreement dated today's date between an Affiliate of Purchaser and the Company, and (B) the entry into, general oversight, administration, amendment and enforcement, on behalf of the Company, of any other agreements or arrangements between the Company or any of its Subsidiaries, on the one hand, and the Purchaser and any of its Subsidiaries on the other hand, which would be required pursuant to Regulation S-K promulgated by the SEC to be disclosed in a registration statement filed under the Securities Act or in a proxy statement or other report filed under the Exchange Act; and consisting of at least three Independent Directors selected by a majority of the Independent Directors; and (iv) such other committees as the Board of Directors deems necessary or desirable; provided that such committees shall not conflict with, supersede or duplicate the duties or responsibilities of the Committees established pursuant to this Section 3.04. (b) Each Committee established pursuant to this Agreement shall act by the affirmative vote of a majority of its members or by unanimous written consent. -7Section 3.05. Certificate of Incorporation and By-Laws. (a) The Company and Purchaser shall take or cause to be taken all lawful action necessary to ensure at all times that the Company's Certificate of Incorporation and By-Laws are not, at any time, inconsistent with the provisions of this Agreement. (b) The Certificate of Incorporation and By-laws of the Company shall contain provisions no less favorable with respect to indemnification than are set forth in Article X of the By-laws of the Company as in effect on the date hereof, which provisions shall not be amended, repealed or otherwise modified in any manner that would affect adversely the rights thereunder of the directors, officers, employees, fiduciaries or agents of the Company, unless such modification shall be required by law. ARTICLE IV REPRESENTATIONS AND WARRANTIES

Section 3.05. Certificate of Incorporation and By-Laws. (a) The Company and Purchaser shall take or cause to be taken all lawful action necessary to ensure at all times that the Company's Certificate of Incorporation and By-Laws are not, at any time, inconsistent with the provisions of this Agreement. (b) The Certificate of Incorporation and By-laws of the Company shall contain provisions no less favorable with respect to indemnification than are set forth in Article X of the By-laws of the Company as in effect on the date hereof, which provisions shall not be amended, repealed or otherwise modified in any manner that would affect adversely the rights thereunder of the directors, officers, employees, fiduciaries or agents of the Company, unless such modification shall be required by law. ARTICLE IV REPRESENTATIONS AND WARRANTIES Section 4.01. Representations of Purchaser and the Company. Purchaser and the Company represent and warrant, to each other as follows: (a) Authority Relative to This Agreement. It has all necessary power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by it and the consummation by it of this Agreement have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on its part are necessary to authorize this Agreement. This Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (b) No Conflict. The execution and delivery by it of this Agreement do not, and its performance of its obligations under this Agreement will not, (i) conflict with or violate the Certificate of Incorporation or By-Laws (or similar constitutive documents) of it or any of its Subsidiaries, (ii) conflict with or violate any law, rule, regulation, order, judgment or decree applicable to it or to any of its Subsidiaries, or by which any of its property or assets or any of the property or assets of its Subsidiaries is bound or affected, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrances on any of its property or assets or on any of the property or assets of its Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which it or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or any of its property or assets or any of the property or assets of its Subsidiaries is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which could not, individually or in the aggregate, reasonably be expected to have a material adverse -8-

effect on its ability to perform its obligations under this Agreement (a "Material Adverse Effect"). Section 4.02. Required Filings and Consents. This execution and delivery by it of this Agreement does not, and the performance of this Agreement by it will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, state blue sky and takeover laws, and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on it. ARTICLE V DIRECTORS AND OFFICERS LIABILITY INSURANCE

effect on its ability to perform its obligations under this Agreement (a "Material Adverse Effect"). Section 4.02. Required Filings and Consents. This execution and delivery by it of this Agreement does not, and the performance of this Agreement by it will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, state blue sky and takeover laws, and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on it. ARTICLE V DIRECTORS AND OFFICERS LIABILITY INSURANCE Section 5.01. Insurance. The Company hereby agrees that it shall maintain the same directors and officers liability ("D&O Insurance") for the benefit of each Director and officer of the Company, provided, however, that in the event that Purchaser determines that it can provide such D&O Insurance more cost effectively than the Company, Purchaser may do so. ARTICLE VI MISCELLANEOUS Section 6.01. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, overnight courier guaranteeing next business day delivery, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section): if to Purchaser, to: Koninklijke Philips Electronics N.V. Rembrandt Tower Amstelplein 1 1096 HA Amsterdam, The Netherlands Attention: General Secretary Facsimile: (011) 31-20-597-7150 -9-

with a copy to: Sullivan & Cromwell 125 Broad Street New York, NY 10004 Attention: Stephen M. Kotran Facsimile: 212-558-3588 if to the Company, to: MedQuist Inc. Five Greentree Centre, Suite 311 Marlton, New Jersey 08053
Attention: Chief Executive Officer; and Senior Vice President and General Counsel

with a copy to: Sullivan & Cromwell 125 Broad Street New York, NY 10004 Attention: Stephen M. Kotran Facsimile: 212-558-3588 if to the Company, to: MedQuist Inc. Five Greentree Centre, Suite 311 Marlton, New Jersey 08053
Attention: Facsimile: Chief Executive Officer; and Senior Vice President and General Counsel 856-596-3351

with a copy to: Pepper Hamilton LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 Attention: James D. Epstein Facsimile: 215.981.4750 Section 6.02. Amendments; No Waivers. (a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of any amendment, by Purchaser and the Company, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that no such amendment or waiver by the Company shall be effective without the approval of the Supervisory Committee. (b) No failure or delay by any party in exercising any right, power or privilege hereunder, shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. Section 6.03. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the matters contemplated hereby are not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal -10-

or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner. Section 6.04. Entire Agreement; Assignment. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned by operation of law or otherwise without the written consent of the other parties hereto. Section 6.05. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and its successors and assigns, and nothing in this Agreement, express or implied, is intended to or

or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner. Section 6.04. Entire Agreement; Assignment. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof. This Agreement shall not be assigned by operation of law or otherwise without the written consent of the other parties hereto. Section 6.05. Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and its successors and assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Section 6.06. Governing Law and Venue; Waiver of Jury Trial; Specific Performance. (a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW JERSEY WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of the Federal courts of the United States of America located in the State of New Jersey solely in respect of the interpretation and enforcement of the provisions of this Agreement, and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or of any such document, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a Federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 6.01 or in such other manner as may be permitted by law shall be valid and sufficient service thereof. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND (ii) AGREES THAT THE PARTIES SHALL BE ENTITLED TO SPECIFIC PERFORMANCE OF THE TERMS HEREOF WITHOUT THE REQUIREMENT THAT A BOND BE POSTED. EACH -11-

PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAVIERS AND CERTIFICATIONS IN THIS SECTION 6.06. Section 6.07. Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Section 6.08. Counterparts; Facsimile. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAVIERS AND CERTIFICATIONS IN THIS SECTION 6.06. Section 6.07. Headings. The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Section 6.08. Counterparts; Facsimile. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Section 6.09. Effective Time; Termination. This Agreement shall automatically become effective, without any action on the part of any party hereto, upon payment by Purchaser for all shares of Common Stock validly tendered and not withdrawn (subject to the terms and conditions of the Offer (as defined in the Tender Offer Agreement)) pursuant to the Tender Offer Agreement (the "Effective Time"), and shall terminate upon the earlier of (i) the mutual agreement of the parties hereto and (ii) the first date on which Purchaser no longer, directly or indirectly, beneficially owns at least 5% of the Voting Stock; provided, however, the provisions of Section 3.04 shall terminate and be of no further force or effect as of the first date when Purchaser Directors do not constitute a majority of the Board of Directors. Section 6.10. Combinations or Divisions of Equity Securities. In the event that any of the outstanding Equity Securities shall be subdivided into a greater or combined into a lesser number of such securities, whether by stock dividend, stock split, reverse stock split, recapitalization, combination of shares or any similar action, any references to numbers, percentages or calculations thereof in this Agreement shall be proportionately adjusted wherever applicable. -12-

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto on the date first hereinabove written. KONINKLIJKE PHILIPS ELECTRONICS NV
By: /s/ A. Baan ----------------------------Name: A. Baan Title: Executive Vice President Philips Electronics By: /s/ J.H.M. Hommen ----------------------------Name: J.H.M. Hommen Title: Executive Vice President Philips Electronics

MEDQUIST INC.
By: /s/ David A. Cohen ----------------------------Name: David A. Cohen Title: Chairman & CEO

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto on the date first hereinabove written. KONINKLIJKE PHILIPS ELECTRONICS NV
By: /s/ A. Baan ----------------------------Name: A. Baan Title: Executive Vice President Philips Electronics By: /s/ J.H.M. Hommen ----------------------------Name: J.H.M. Hommen Title: Executive Vice President Philips Electronics

MEDQUIST INC.
By: /s/ David A. Cohen ----------------------------Name: David A. Cohen Title: Chairman & CEO

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