Exhibit 10.42

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (the “Termination Agreement”) is made and entered
into as of June 30, 2010 (the “Effective Date”) among Nighthawk Radiology
Holdings, Inc., a Delaware corporation (“NightHawk”); NightHawk Radiology
Services, LLC, an Idaho limited liability company (“NRS”); Midwest Physicians
Services, LLC, a Minnesota limited liability company (“Support Services
Company”); St. Paul Radiology, P.A., a Minnesota corporation (“SPRPA”); and
Midwest Radiology, LLC, a Minnesota limited liability company (“MWR”).

RECITALS

WHEREAS, NightHawk is currently the parent company of NRS and Support Services
Company;

WHEREAS, SPRPA and MWR are under common control and are affiliated entities;

WHEREAS, certain parties to this Termination Agreement have entered into the
following agreements (including any and all amendments and addendums thereto)
with certain other parties to this Termination Agreement (the “Original
Agreements”) as follows:

 

  a. Administrative Support Services Agreement between Midwest Physicians
Services, LLC and St. Paul Radiology, P.A. dated July 16, 2007, as amended
October 3, 2007 and April 18, 2008 along with the Addendum and Acknowledgement
dated as of June 30, 2010 (the “SPR Addendum”);

 

  b. Administrative Support Services Agreement between Midwest Physicians
Services, LLC and Midwest Radiology, LLC dated July 16, 2007, as amended
October 3, 2007 and as further amended on September 1, 2009 along with the
Addendum and Acknowledgement dated as of June 30, 2010 (the “MWR Addendum”);

 

  c. Professional Services Agreement between NightHawk Radiology Services, LLC
and St. Paul Radiology, P.A. dated July 16, 2007, along with the addendum dated
April 17, 2009 along with the Addendum and Acknowledgement dated as of June 30,
2010 (the “NRS Addendum”); and

 

  d. Data License Agreement among Midwest Radiology, LLC, St. Paul Radiology,
P.A. and Midwest Physicians Services, LLC dated July 16, 2007.

WHEREAS, subject to the terms hereof, NightHawk, SPRPA and their affiliates have
agreed to terminate the Original Agreements, as set forth and for the
consideration set forth herein.

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NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Treatment of the Original Agreements.

A. Termination. Except as set forth in Section 1.B., the parties hereto agree
that the Original Agreements are hereby terminated, effective as of the
Effective Date and all rights and obligations in the Original Agreements shall
cease as of the Effective Date. Without limiting the generality of the
foregoing, and except as set forth in Section 1.B., each party irrevocably
agrees that the Original Agreements are of no further force and effect and any
and all rights, liabilities, obligations, promises, conditions, covenants,
agreements, representations, warranties, and all other provisions of the
Original Agreements are fully and irrevocably extinguished and of no force and
effect. If any party hereto shall claim, now or at any time in the future, any
default, breach, tort, or any other alleged wrongful conduct, regardless of how
denominated or described, the parties hereto agree that none of the provisions
in any of the Original Agreements shall be used in any manner whatsoever, in
whole or in part, as a measure of or as any evidence in determining, damages,
accounting, lost profits, restitution, or any other remedy for any such breach,
default, tort, wrongful conduct, or any other claim.

B. Limited Survival. Notwithstanding Section 1.A., the specific provisions of
the Original Agreements set forth on Exhibit A shall survive the termination of
the Original Agreements.

2. Payment. As consideration for the termination of the Original Agreements,
SPRPA and MWR shall pay NightHawk an aggregate of Twenty-One Million Five
Hundred Thousand Dollars ($21,500,000) (the “Termination Fee”) as follows:

A. Initial Cash Payment. On the Effective Date, MWR shall pay NightHawk Seven
Million Five Hundred Thousand Dollars ($7,500,000) by wire transfer pursuant to
wire instructions heretofore provided to MWR;

B. Promissory Note. On the Effective Date, SPRPA shall execute and deliver to
NightHawk a promissory note in the original principal amount of Fourteen Million
Dollars ($14,000,000) (the “Promissory Note”), which Promissory Note shall
provide for the following payments:

(i) Beginning on August 16, 2010, and on the 15th day of each month thereafter
(or, if such date is not a business day, the immediately following business day)
for 48 months, SPRPA will make monthly payments of Two Hundred Fifty Thousand
Dollars ($250,000) (each a “Monthly Payment”). The parties acknowledge that the
aggregate of all of the Monthly Payments will be equal to Twelve Million Dollars
($12,000,000).

(ii) In addition to the Monthly Payments, SPRPA will pay to NightHawk Two
Million Dollars ($2,000,000) on or prior to March 31, 2011 in one or more
installments. For the avoidance of doubt it is acknowledged that such payment(s)
shall be in addition to, not in lieu of, the Monthly Payments, and on or prior
to March 31, 2011, SPRPA shall have paid NightHawk no less than Four Million
Dollars ($4,000,000).

 

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C. Cancellation of Warrant. On the Effective Date, SPRPA shall surrender for
cancellation that warrant to purchase 300,000 shares of common stock of
NightHawk, issued by NightHawk to SPRPA on July 16, 2007.

3. Assignment of Non-Competes. On the Effective Date, NightHawk shall execute
and deliver the Assignment of the Noncompetition Agreements of even date
herewith.

4. Investment Representations. NightHawk hereby represents and warrants to SPRPA
that it is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended. NightHawk
acknowledges and agrees that it has: (a) made its own inquiry and investigation
into SPRPA and (b) it has been furnished with or given access to such
information as it requested about SPRPA and used such access to its
satisfaction.

5. Governing Law. This Termination Agreement shall be governed by and construed
in accordance with the internal laws of the State of Minnesota, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction and venue of any court within Hennepin County, Minnesota, in
connection with any matter based upon or arising out of this Agreement, and
agrees that process may be served upon them in any manner authorized by the laws
of the State of Minnesota for such persons and waives and covenants not to
assert or plead any objection which they might otherwise have to such
jurisdiction, venue and such process.

6. No Representations. In connection with the execution and delivery of this
Agreement and the performance of obligations hereunder, no party has relied upon
any representations, warranties or statements made by any other party hereto
which are not specifically set forth in this Termination Agreement.

7. Severability. In the event that any provision, or any portion thereof,
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Termination Agreement shall continue in full force
and effect without said provision or portion of said provision.

8. Entire Agreement. This Termination Agreement and the provisions of the
Original Agreements set forth in Section 1.B. which are expressly stated to
survive represent the entire agreement and understanding among the parties
concerning the subject matter herein and supersede and replace any and all prior
agreements and understandings among the parties concerning such subject matter.

9. Termination Stands. Under no circumstances shall this Termination Agreement
be invalidated, rescinded, or modified, in whole or in part, by virtue of a
claim that the surviving terms of the Original Agreements as set forth in
Section 1.B. or any other agreement between the parties has been breached. Each
party agrees to refrain from advancing any claim in violation of this paragraph.

 

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10. No Oral Modification. This Termination Agreement may only be amended in a
writing signed by a duly authorized representative of each party.

11. Assignability. Any party may assign this Termination Agreement without the
consent of the other parties hereto.

12. Counterparts. This Termination Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.

13. Headings. The headings in this Termination Agreement are for convenience of
reference only, will not be deemed to be a part of this Termination Agreement
and will not be referred to in connection with the construction or
interpretation of this Termination Agreement.

14. Execution and Delivery. A facsimile, electronic copy or other reproduction
of this Termination Agreement may be executed by one or more parties hereto, and
an executed copy of this Termination Agreement may be delivered by one or more
parties hereto by facsimile or similar electronic transmission device pursuant
to which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Termination Agreement as well as any facsimile,
telecopy or other reproduction hereof.

(Signature page follows)

 

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IN WITNESS WHEREOF, the parties set forth below have caused this Termination
Agreement to be signed as of the date first written above.

 

NIGHTHAWK RADIOLOGY HOLDINGS, INC.,

a Delaware corporation

   

NIGHTHAWK RADIOLOGY SERVICES, LLC.,

an Idaho limited liability company

By    /s/ Paul E. Cartee     By   /s/ Paul E. Cartee   Paul E. Cartee       Paul
E. Cartee   Senior Vice President and General Counsel       Senior Vice
President and General Counsel

MIDWEST RADIOLOGY, LLC

a Minnesota limited liability company

   

MIDWEST PHYSICIANS SERVICES, LLC,

a Minnesota limited liability company

By    /s/ Michael T. Madison     By   /s/ Paul E. Cartee   Michael T. Madison  
    Paul E. Cartee   Chief Manager       President, Secretary and Chief Manager

ST. PAUL RADIOLOGY, P.A.

a Minnesota corporation

    By    /s/ Michael T. Madison       Michael T. Madison         Chief
Executive Officer      

[SIGNATURE PAGE TO TERMINATION AGREEMENT]

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Exhibit A

Surviving Terms of the Original Agreements

 

a. Administrative Support Services Agreement between Midwest Physicians
Services, LLC and St. Paul Radiology, P.A. dated July 16, 2007, as amended
October 3, 2007 and April 18, 2008 along with the Addendum and Acknowledgement
dated as of June 30, 2010 (the “SPRPA Addendum”):

Article VI (Confidentiality) shall survive indefinitely.

The payment terms set forth in the SPRPA Addendum shall survive until paid in
full.

 

b. Administrative Support Services Agreement between Midwest Physicians
Services, LLC and Midwest Radiology, LLC dated July 16, 2007, as amended
October 3, 2007 and as further amended on September 1, 2009 along with the
Addendum and Acknowledgement dated as of June 30, 2010 (the “MWR Addendum”):

Article VI (Confidentiality) shall survive indefinitely.

The payment terms set forth in the MWR Addendum shall survive until paid in
full.

 

c. Professional Services Agreement between NightHawk Radiology Services, LLC and
St. Paul Radiology, P.A. dated July 16, 2007, as amended by the Addendum to
Professional Services Agreement dated April 17, 2009 along with the Addendum and
Acknowledgement dated as of June 30, 2010 (the “NRS Addendum”).

Section 10 (Maintenance of Films and Patient Records) and Section 15
(Confidentiality) shall survive indefinitely.

The payment terms set forth in the NRS Addendum shall survive until paid in
full.

 

d. Data License Agreement among Midwest Radiology, LLC, St. Paul Radiology, P.A.
and Midwest Physicians Services, LLC dated July 16, 2007.

Section 2.3 (Obligations on Termination) shall survive indefinitely.