Exhibit 10.38


 


AMENDED AND RESTATED EMPLOYMENT AGREEMENT
dated as of January 1, 2006 (as amended, modified or supplemented from
time to time, this “Agreement”), among TODD W. LATZ
(the “Executive”), MEDQUEST, INC.,
a Delaware corporation (the “Company”), and MQ
ASSOCIATES, INC., a Delaware corporation and parent entity of
the Company (the “Parent”).


 


WHEREAS, the Company
and Executive are parties to an Employment Agreement dated December 14,
2004 (the “Original Employment Agreement”) and desire to continue the
employment of Executive as a senior executive of the Company, and Executive has
agreed to continue such employment, on the terms and conditions set forth in
this Agreement;


 


WHEREAS, the Parent,
the Company and Executive desire to amend and restate the Original Employment
Agreement in its entirety by entering into this Agreement;


 


NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, the
parties agree as follows:


 


1.                                         Employment.
The Company hereby employs the Executive and the Executive accepts such
employment upon the terms and conditions hereinafter set forth.


 


2.                                         Term of
Employment. Subject to earlier termination pursuant to the provisions of Section 6,
the term of the Executive’s employment pursuant to this Agreement shall
commence on and as of the date hereof (the “Effective Date”) and shall
terminate on the third anniversary of the Effective Date, subject to automatic
annual extensions for successive periods of one year each as of the third
anniversary of the Effective Date and each anniversary thereafter, unless
either party gives written notice of nonrenewal to the other at least 60 days
before the term would otherwise terminate (such period, the “Employment
Period”).


 


3.                                         Duties;
Extent of Service. During the Employment Period, the Executive (a) shall
serve as a senior executive officer of the Company and the Parent with the
title and position of General Counsel, reporting to the Chief Executive
Officer, and (b) shall have supervisory responsibility in such capacity
over matters as may be specified from time to time by the Chief Executive
Officer, consistent with the Executive’s position and general area of
experience and skills, provided, that
in all cases the Executive shall be subject to the oversight and supervision of
the Chief Executive Officer in the performance of his duties, (c) upon the
request of the Chief Executive Officer, shall serve as an officer and/or
director of any of the Company’s subsidiaries and/or other affiliates, and (d) shall
render all services reasonably incident to the foregoing. The Executive hereby
accepts such employment, agrees to serve in the capacities indicated, and
agrees to use the Executive’s best efforts in, and shall devote the Executive’s
full working time, attention, skill and energies to the advancement of the
interests of the Company, the Parent and their subsidiaries and to the
performance of the Executive’s duties


 

















 


and responsibilities hereunder. The Executive shall not during the
Employment Period be engaged in any other business activity that, in the
reasonable judgment of the Board of Directors of the Parent and/or the Company
(the “Board of Directors”), would conflict with the ability of the Executive to
perform his duties under this Agreement, whether or not such activity is
pursued for gain, profit or other pecuniary advantage.


 


4.                                         Salary and
Bonus.


 


a.                                     Base Salary.                               During
the Employment Period, the Company shall pay the Executive total base
compensation at the rate of $250,000.00 per annum, subject to increase from time
to time at the discretion of the Chief Executive Officer or the Board of
Directors (as in effect from time to time, the “Base Salary”). Such Base
Salary shall be subject to withholding under applicable law, shall be pro rated
for partial years and shall be payable in periodic installments not less
frequently than monthly in accordance with the Company’s usual practice for
senior executive officers of the Company as in effect from time to time.


 


b.                                    Annual Bonus.
During the Employment Period, in addition to the Base Salary, the Executive
shall be eligible to receive an annual bonus (the “Annual Bonus”) from
the Company, based upon the achievement of certain annual objectives (the “Bonus
Objectives”) to be mutually agreed upon by the Executive and the Chief
Executive Officer. If 100% of the Bonus Objectives shall be satisfied by the
Executive, such Annual Bonus shall be equal to 50% of the Base Salary (the “Target
Annual Bonus”). The Annual Bonus will be reduced ratably if less than 100%
of such Bonus Objectives shall be satisfied by the Executive and the Executive
will have an opportunity, based solely on the discretion of the Chief Executive
Officer, to earn an Annual Bonus in excess of the Target Annual Bonus taking
into account personal performance, bonus awards made to other members of the
Company’s senior management team and Company performance. The Annual Bonus
calculated with respect to any fiscal year will be earned and accrued, to the
extent the Bonus Objectives shall be achieved, if the Executive is an employee
of the Company on the last day of such fiscal year.


 


c.                                     Equity. The
Company shall recommend to the Board of Directors that the Executive
participate in the Company’s stock option or other equity interest plans in
effect from time to time, with grants, exercise prices, vesting and other
provisions that are commensurate with the Executive’s position and
responsibilities and the grants provided to other members of senior management.


 


5.                                         Benefits.


 


a.                                     Effective from and
after the first day of the month following the 30th day of the
Employment Period, or such earlier date as may be permitted pursuant to
the terms of the applicable plans or policies, and throughout the remainder of
the Employment Period, the Executive shall be entitled to participate in any
and all medical, dental, vision care, short and long term disability, life
insurance, and accidental death and disability plans, retirement arrangements
and automobile allowance programs as in effect from time to time for senior
executive officers of the Company generally and approved by the Board of
Directors. Such participation shall be subject to (i) the terms of the
applicable plan documents (including, as applicable, provisions granting
discretion to the Board of Directors or any administrative or other


 


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committee provided for therein or contemplated thereby) and (ii) generally
applicable policies of the Company.


 


b.                                    During the
Employment Period, to the extent permitted by law, the Executive shall be
entitled to four (4) weeks paid vacation during each twelve (12) month
period worked, commencing on the Effective Date; provided, however,
that the Executive shall be entitled to accumulate not more than eight (8) weeks
of unused vacation for which the Executive shall be compensated if the
Executive’s employment is terminated.


 


c.                                     The Company shall
promptly reimburse Executive for all reasonable business expenses incurred by
Executive during the Employment Period in accordance with the Company’s practices
for senior executive officers of the Company as in effect from time to time.


 


d.                                    Compliance with the
provisions of this Section 5 shall in no way create or be deemed to
create any obligation, express or implied, on the part of the Parent or
any of its affiliates with respect to the continuation of any particular
benefit or other plan or arrangement maintained by them or their affiliates as
of or prior to the date hereof or the creation and maintenance of any
particular benefit or other plan or arrangement at any time after the date
hereof.


 


6.                                         Termination
and Termination Benefits; Effect of Termination. Notwithstanding the
provisions of Sections 2 or 3, the Executive’s employment
under this Agreement shall terminate under the following circumstances:


 


a.                                     Termination by
the Company for Cause. The Employment Period may be terminated by the
Company for Cause without further liability on the part of the Company or
any of its affiliates upon written notice to the Executive, such termination to
be effective on the date specified in such notice. “Cause” means (i) a
failure by the Executive to observe policies of the Parent and its affiliates
generally applicable to executives of the Parent and its affiliates that causes
material harm to the Parent or its affiliates, (ii) gross negligence or
willful misconduct by the Executive in the performance of his duties, (iii) failure
by the Executive to substantially perform the duties contemplated by Section 3
hereof, which failure is not remedied within ten (10) days after a written
notice of such failure is delivered to the Executive by the Company, or (iv) the
commission by the Executive of any act of fraud, theft or financial dishonesty
with respect to the Company, the Parent or any of its or their affiliates, (iv) the
Executive’s indictment, conviction of, or pleading no contest or nolo
contendere to, any felony or a lesser crime involving dishonesty or (v) the
material breach by the Executive of this Agreement (including, without
limitation, the failure to perform his duties hereunder in accordance with
Section 3 hereof other than absences due to illness, injury,
vacations or holidays), or any other material agreement or contract between or
among the Executive, the Company, the Parent or any of its or their affiliates,
which breach (if susceptible to cure) is not cured by the Executive within ten
days following written notice by the Company to the Executive of such breach.


 


b.                                    Termination by
the Executive. The Employment Period may be terminated by the
Executive by written notice to the Chief Executive Officer without Good


 


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Reason at least 90 days prior to such termination and with Good Reason
at least 30 days prior to such termination, such termination to be effective on
the date specified in such notice. “Good Reason” means (i) a
reduction in the Executive’s Base Salary, (ii) a material reduction in the
Executive’s duties or reporting relationships provided in this Agreement, (iii) a
material breach of this Agreement by the Company, or (iv) any requirement
that the Executive relocate his principal place of business to a location more
than 50 miles from the Company’s headquarters as of the date hereof; provided,
however, that if the Executive consents to such relocation, or actually
relocates, such relocation requirement shall not constitute Good Reason.


 


c.                                     Termination by
the Company Without Cause. The Employment Period under this Agreement may be
terminated by the Company without further liability on the part of the Company
or any of its affiliates without Cause upon written notice to the Executive,
such termination to be effective as of the date of such notice.


 


d.                                    Certain
Termination Benefits. Unless otherwise specifically provided in this
Agreement, all of the Company’s obligations under this Agreement shall
terminate on the date of termination of the Employment Period. Notwithstanding
the foregoing, in the event of termination of the Executive’s employment with
the Company by the Executive for Good Reason or by the Company without Cause
(including a termination without Cause as contemplated by the last paragraph of
Section 8.a), the Company shall provide to Executive the following
termination benefits (“Termination Benefits”):


 


(i)                                   continuation
of the Executive’s Base Salary at the rate then in effect pursuant to Section 4.a;


 


(ii)                                an
amount equal to the product of (A) that portion, expressed as a
percentage, of the year-to-date Bonus Objectives realized by the Executive as
of the date of such termination and (B) the product of (x) the quotient
obtained by dividing (I) the number of calendar days elapsed from the beginning
of the respective calendar year to the date of such termination by (II) 365 and
(y) the Target Annual Bonus with respect to the year of termination for which
the Executive is eligible, which amount shall be paid to the Executive at the
frequency and in the manner provided for payments pursuant to clause (i) above;
provided, however, that in the event that such termination
without Cause or for Good Reason shall be effective on the date of the
consummation of a Sale of the Company (as defined in that certain Stockholders’
Agreement, dated as of August 15, 2002, as amended from time to time,
among the Parent and the stockholders party thereto (the “Stockholders’
Agreement”)) or, within 180 days thereafter, such amount shall be payable
on the effective date of such termination; and


 


(iii)                             continuation
of group health, dental, and disability plan benefits as described in Section 5.a
of this Agreement, with the cost for such benefits shared in the same relative
proportion by the Company and the Executive as in effect on the date of
termination.


 


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The Termination Benefits set forth in clauses (i) and (iii) above
shall continue, so long as the Executive is in compliance with the Executive’s
continuing obligations under this Agreement, until twelve (12) months after the
date of termination; provided, however, that in the event that
such termination without Cause or for Good Reason shall be effective on the
date of the consummation of a Sale of the Company (as defined in Section 6(d)(ii) hereof)
or, within 180 days thereafter, the Termination Benefits set forth in clause (i) shall
be in an amount equal to two times Executive’s Base Salary and shall be payable
on the effective date of such termination. The Company and the Executive agree
that the Termination Benefits paid by the Company to the Executive under this Section 6.d
shall be contingent upon the Executive’s delivery of a general release of any
and all claims (other than those arising under this Section 6.d and
Section 6.f) upon termination of employment in the form attached
hereto as Exhibit A (with such changes as may be necessitated
by any change in law after the date hereof to obtain the full benefits
thereunder), it being understood that no Termination Benefits shall be provided
unless and until the Executive executes and delivers such release and such
release shall not be revoked. Notwithstanding
anything contained herein to the contrary, any payment required to be made
pursuant to clause (ii) above that would result in a violation of,
or a default under, any agreement governing any indebtedness for borrowed money
of the Parent or any of its affiliates, shall not be made so long as such agreement would prohibit such payment
or such payment would result in a violation or default thereunder; provided,
however, that the Parent shall use its good faith efforts to negotiate
with the lenders under any such agreement to permit the payment of such amounts
as promptly as practicable. Any such delay in making such payments shall not be
deemed to be a violation of this Agreement so long as the Employment Period
and/or termination date shall be extended until such time as such payments are
made; provided, however, that any compensation that Executive
shall receive from the Company during such extension of the Employment Period
and/or termination date shall be offset against, and in no event shall be
greater than, the aggregate amount of the aforementioned delayed payments. The
Executive shall not be required to mitigate the amount of any payment provided
for in this Section 6 by seeking other employment or otherwise, and
the amount of any payment or benefit provided for in this Section 6
shall not be reduced by any compensation earned by the Executive as the result
of employment by another employer or by retirement benefits.


 


e.                                     Death or
Disability. The Executive’s employment and all obligations of the Company
hereunder shall terminate upon the death or Disability of the Executive, other
than the obligation to pay the greater of (A) the product of (x) the
aggregate amount of the Annual Bonus the Executive received in the preceding
calendar year and (y) that portion, expressed as a percentage, of the Bonus
Objectives for the calendar year of termination realized by the Executive as of
the date of such termination and (B) the prorated bonus amount as
calculated pursuant to Section 6.d(ii). “Disability” means a
condition under which the Executive is unable due to illness or injury to perform the
essential functions of the Executive’s then existing position or positions
under this Agreement for a continuous six-month period with reasonable
accommodation, as determined in the sole discretion of the Chief Executive
Officer.


 


f.                                       Continuing
Obligations. Notwithstanding termination of the Employment Period or any
other provision hereof, the Company shall remain obligated to pay (without
duplication of any payment hereunder) all earned (to the date of such
termination of the Employment Period) but unpaid Base Salary, the earned and
accrued Annual Bonus for any completed fiscal year as of the date of
termination of the Employment Period (to the extent the


 


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Bonus Objectives shall have been achieved) as set forth in this Section 6,
benefits, payments, or rights to which the Executive remains entitled after the
termination of the Employment Period pursuant to the terms of any agreement,
plan, program or policy, and reimbursement for business expenses incurred to
the date of termination of the Employment Period that are reimbursable in
accordance with the terms of this Agreement. Notwithstanding termination of
this Agreement as provided in this Section 6 or any other
termination of the Executive’s employment with the Company, the Executive’s
obligations under Section 7 and Section 8 hereof shall
survive any termination of the Executive’s employment with the Company at any
time and for any reason.


 


g.                                    Effect of
Termination.                             Effective
immediately upon termination of the Employment Period, regardless of reason,
and without the necessity of any further action on the part of the
Executive, the Company or any other person, the Executive’s service (i) on
any and all boards of directors, boards of managers or similar governing bodies
of any of the Parent and any of its subsidiaries, (ii) as an officer of
the Parent and any of its subsidiaries and (iii) as an employee of the
Parent and any of its subsidiaries shall, in each case, be terminated and the
Executive shall be deemed to have resigned from any and all such positions then
held by the Executive.


 


7.                                         Confidentiality;
Proprietary Rights.


 


a.                                     In the course of
performing services hereunder on behalf of the Parent, the Company (including
all predecessors and successors of each of the Parent and the Company) and its
and their affiliates (the Parent and its subsidiaries collectively, the “Employer
Parties”), the Executive from time to time will have access to Confidential
Information (as defined below). The Executive agrees (a) to hold the
Confidential Information in strict confidence, (b) not to disclose the
Confidential Information to any person (other than in the ordinary course of
the regular business of the Employer Parties), and (c) not to use,
directly or indirectly, any of the Confidential Information for any purpose
other than on behalf of the Employer Parties. All documents, records, data,
apparatus, equipment and other physical property, whether or not pertaining to
Confidential Information, that are furnished to the Executive by any Employer
Party or are produced by the Executive in connection with the Executive’s
employment will be and remain the sole property of the applicable Employer
Party. Upon the termination of the Employment Period for any reason and as and
when otherwise requested by any Employer Party, all Confidential Information
(including, without limitation, all data, memoranda, customer lists, notes,
programs and other papers and items, and reproductions thereof relating to the
foregoing matters) in the Executive’s possession or control shall be
immediately returned to the Company.


 


b.                                    The Executive
hereby confirms that the Executive is not bound by the terms of any agreement
with any previous employer or other party that restricts in any way the
Executive’s engagement in any business. The Executive represents to the Company
that the Executive’s execution of this Agreement, the Executive’s employment
with the Company and the performance of the Executive’s proposed duties for the
Employer Parties will not violate any obligations the Executive may have
to any such previous employer or other party. In the Executive’s work for the
Employer Parties, the Executive will not disclose or make use of any
information in violation of any agreements with or rights of any such previous
employer or other party, and the Executive will not bring to the premises of
the Employer Parties any copies or


 


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other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party. The Executive
represents and warrants that he is not a party to any consulting or advisory
agreement with any third party (including a previous employer) that would
interfere with the Executive’s performance of his obligations and duties
hereunder and the Executive shall advise and update the Chief Executive Officer
(including providing copies of notices, agreements and other relevant documentation)
from time to time and as requested by the Chief Executive Officer of any
matters or developments relating to his relationship with any previous
employer.


 


c.                                     During and after
the Employment Period, the Executive shall reasonably cooperate with the
Employer Parties in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of
any Employer Party or any of their respective affiliates that relate to events
or occurrences that transpired while the Executive was employed by the Company.
The Executive’s reasonable cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Employer Parties or any of their respective affiliates at mutually
convenient times. During and after the Employment Period, the Executive also
shall reasonably cooperate with the Employer Parties in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Company. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred in
connection with the Executive’s performance of obligations pursuant to this Section 7.c,
and in the event the Executive’s performance of obligations under this Section 7.c
requires more than 20 hours of the Executive’s time, the Company will pay the
Executive an hourly rate of $250 per hour for his time, beginning only as of
such 21st hour.


 


d.                                    The Executive
recognizes that the Employer Parties and their respective affiliates possess a
proprietary interest in all of the information described in Section 7.a
and have the exclusive right and privilege to use, protect by copyright, patent
or trademark, or otherwise exploit the processes, ideas and concepts described
therein to the exclusion of the Executive, except as otherwise agreed between
the Company and the Executive in writing. The Executive expressly agrees that
any products, inventions or discoveries made by the Executive or the Executive’s
agents or affiliates in the course of the Executive’s employment, including any
of the foregoing that is based on or arises out of the information described in
Section 7.a, shall be the property of and inure to the exclusive
benefit of the Company. The Executive further agrees that any and all products,
inventions, or discoveries developed by the Executive (whether or not able to
be protected by copyright, patent or trademark) during the course of his
employment, or involving the use of the time, materials or other resources of
the Employer Parties or any of their respective affiliates, shall be promptly
disclosed to the Company and shall become the exclusive property of the
Company, and the Executive shall execute and deliver any and all documents
necessary or appropriate to implement the foregoing.


 


e.                                     During the
Employment Period, the Executive will offer or otherwise make known or
available to the Company, as directed by the Chief Executive Officer or Board
of Directors and without additional compensation or consideration, any business
prospects, contracts or other business opportunities that the Executive may discover,
find,


 


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develop or otherwise have available to the Executive in the Company’s
general industry and further agrees that any such prospects, contacts or other
business opportunities shall be the property of the Company (or other
appropriate Employer Party, as applicable).


 


f.                                       The Executive
acknowledges that the provisions of this Section 7 and the
following Section 8 are an integral part of the Executive’s
employment arrangements with the Company.


 


g.                                    For purposes of
this Agreement, the term “Confidential Information” shall mean:
information belonging to any Employer Party that is of value to any Employer
Party or with respect to which any Employer Party has rights in the course of
conducting its respective business and the disclosure of which could result in
a competitive or other disadvantage to any Employer Party. Confidential
Information includes information, whether or not patentable or copyrightable,
in written, oral, electronic or other tangible or intangible forms, stored in
any medium, including, by way of example and without limitation, trade secrets,
ideas, concepts, designs, configurations, specifications, drawings, blueprints,
diagrams, models, prototypes, samples, flow charts, processes, techniques,
formulas, software, improvements, inventions, data, know-how, discoveries,
copyrightable materials, marketing plans and strategies, sales and financial
reports and forecasts, studies, reports, records, books, contracts,
instruments, surveys, computer disks, diskettes, tapes, computer programs and
business plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) that have been discussed or
considered by the management of any Employer Party. Confidential Information
includes information developed by the Executive in the course of the Executive’s
employment by the Company, as well as other information to which the Executive may have
access in connection with the Executive’s employment. Confidential Information
also includes the confidential information of others with which any Employer
Party has a binding confidentiality agreement. Notwithstanding the foregoing, Confidential
Information does not include information in the public domain, unless due to
breach of the Executive’s duties under Section 7.a.


 


8.                                         Non-Competition;
Non-Solicitation; Other Boards.


 


a.                                     The Executive
acknowledges that, in the course of his employment with the Company and/or its
affiliates and their predecessors, he will become familiar with the Company’s
and its affiliates’ and their predecessors’ trade secrets and with other
confidential information concerning the Company, its affiliates and their
respective predecessors and that his services will be of special, unique and
extraordinary value to the Company and its affiliates. Therefore, the Executive
agrees that, during the Employment Period and for one (1) year thereafter
(the “Non-Compete Period”), he shall not directly or indirectly own, manage,
control, participate in, consult with, render services for, or in any manner
engage in or represent any business competing with the Business of the Company
or its affiliates within any Restricted Territory. “Business” means the
management and/or operation of outpatient diagnostic imaging centers. “Restricted
Territory” means the states and/or other territories set forth on Schedule I;
provided, that, not less than annually, the Company and the Executive
shall update Schedule I to (i) add to Schedule I
any states or other territories in which the Company or its affiliates is then
conducting its Business and (ii) delete from Schedule I any
states or other territories in which the Company or its affiliates is no longer
conducting its Business; provided, further, that, in the


 


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event that the Company and the Executive fail to agree on any such
update, the then-existing Schedule I (as may have been
previously amended) shall govern.


 


Notwithstanding the foregoing, if the
Executive’s employment is terminated as a result of a scheduled expiration of
the Employment Period or a nonrenewal as provided in Section 2, or
if the Company fails to provide the post-termination benefits pursuant to Section 6.d,
the Executive shall not be bound by the non-competition and non-solicitation
restrictions in this Section 8, except to the extent that the
Company notifies the Executive in writing on or prior to the date of such
scheduled expiration or nonrenewal that the Company has elected to treat such
scheduled expiration or nonrenewal as a Termination without Cause.


 


b.                                    Nothing herein
shall prohibit the Executive from being a passive owner of not more than 2% of
the outstanding stock of any class of a corporation that is publicly
traded, so long as the Executive has no active participation in the business of
such corporation.


 


c.                                     During the
Non-Compete Period, the Executive shall not directly, or indirectly through
another person or entity, (i) induce or attempt to induce any employee of
any Employer Party to leave the employ of such Employer Party, or in any way
interfere with the relationship between such Employer Party, on the one hand,
and any employee thereof, on the other hand, (ii) hire any person who was
an employee of any Employer Party until sixty (60) days after such individual’s
employment relationship with such Employer Party has been terminated or (iii) induce
or attempt to induce any customer, supplier, licensee or other business
relation of any Employer Party to cease doing business with such Employer
Party, or in any way interfere with the relationship between any such customer,
supplier, licensee or business relation, on the one hand, and such Employer
Party, on the other hand.


 


d.                                    The Executive
understands that the foregoing restrictions may limit his ability to earn
a livelihood in a business similar to the business of the Employer Parties, but
he nevertheless believes that he will receive sufficient consideration and
other benefits as an employee of the Company and the Parent and as otherwise
provided hereunder to clearly justify such restrictions (including any
restrictions imposed in the future by any amendment to Schedule I
mutually agreed upon by the Company and the Executive) which, in any event
(given his education, skills and ability), the Executive does not believe would
prevent him from otherwise earning a living. The Executive has carefully
considered the nature and extent of the restrictions placed upon him by this
Agreement, and hereby acknowledges and agrees that the same are reasonable in
time and territory (including as such territory as may hereafter be
amended by mutual agreement of the Company and the Executive) and do not confer
a benefit upon any Employer Party disproportionate to the detriment of the
Executive.


 


9.                                         Non-Disparagement.
From the Effective Date through the date that is the second anniversary of the
date of the termination of the Employment Period, the Executive agrees that he
will not make, or cause to be made, any statement, observation, or opinion, or
communicate any information (whether oral or written), to any person other than
a member of the Board of Directors, that disparages any Employer Party or is
likely in any way to harm the business or the reputation of any Employer Party,
or any of their respective former, present, or future directors, officers,
stockholders or employees.


 


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10.                                   Certain
Restrictions on Transfers; Fees in Connection with Certain Sales of Common
Stock. If the Parent at any time shall register an offering and sale of
shares of Common Stock under the Securities Act of 1933, as amended (or any
successor statute thereto) (the “Securities Act”), in an underwritten
offering (i) pursuant to an initial public offering or (ii) pursuant
to any other registration under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms
thereto), if requested by the managing underwriter(s) and provided that the
directors and officers of the Parent are so restricted, the Executive shall not
sell, make any short sale of, grant any option for the purchase of, or
otherwise dispose of any capital stock of the Parent (other than (A) any
shares of Common Stock held by, or issuable to, the Executive that are included
in such registration or (B) a Permitted Transfer (as defined in the
Stockholders’ Agreement)) without the prior written consent of the Parent for a
period as shall be determined by the managing underwriters, which period cannot
begin more than seven (7) days prior to the effectiveness of such
registration statement and cannot last more than ninety (90) days (180 days in
the case of the Parent’s or the Company’s initial public offering) after the
effective date of such registration statement.


 


11.                                   Parties in
Interest; Certain Remedies. It is specifically understood and agreed that
this Agreement is intended to confer a benefit, directly and indirectly, on the
Parent, the Company and their direct and indirect subsidiaries and affiliates,
and that any breach of the provisions of this Agreement by the Executive will
result in irreparable injury to the Parent, the Company and their subsidiaries
and affiliates, that the remedy at law alone will be an inadequate remedy for
such breach and that, in addition to any other remedy it may have, the
Parent, the Company or their subsidiaries and affiliates shall be entitled to
enforce the specific performance of this Agreement by the Executive through
both temporary and permanent injunctive relief without the necessity of posting
a bond or proving actual damages, but without limitation of their right to
damages and any and all other remedies available to them, it being understood
that injunctive relief is in addition to, and not in lieu of, such other
remedies.


 


12.                                   Notices. All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if faxed (with transmission
acknowledgment received), delivered personally or by nationally recognized
overnight courier (providing proof of delivery) or mailed by certified or
registered mail (return receipt requested) as follows:


 


To the Company or the Parent:


 


MedQuest, Inc.


4300 North Point Parkway


Alpharetta, GA 30022


Fax: (770) 734-9652


Attention: Chief Executive Officer


 


with a copy
to:


 


MedQuest, Inc.


4300 North Point Parkway


Alpharetta, GA 30022


 


10

















 


Fax: (770) 734-9652


Attention: Chief Financial Officer


 


To Executive:


 


c/o MedQuest, Inc.


4300 North Point Parkway


Alpharetta, GA 30022


Fax: (770) 734-9652,


 


or to such other address or fax number of which any party may notify
the other parties as provided above. Notices shall be effective as of the date
of such delivery, mailing or fax.


 


13.                                   Scope of
Agreement. The parties acknowledge that the time, scope, geographic area
(including as such geographic area may be amended pursuant to Section 8)
and other provisions of Section 8 hereof have been specifically
negotiated by sophisticated parties and agree that all such provisions are
reasonable under the circumstances of the transactions contemplated hereby, and
are given as an integral and essential part of the transactions
contemplated hereby. The Executive has independently consulted with counsel and
has been advised in all respects concerning the reasonableness and propriety of
the covenants contained herein, with specific regard to the business to be
conducted by the Parent, the Company and their subsidiaries and affiliates, and
represents that this Agreement is intended to be, and shall be, fully
enforceable and effective in accordance with its terms.


 


14.                                   Severability.
In the event that any covenant contained in this Agreement shall be determined
by any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time or over too great a geographical area
or by reason of its being too extensive in any other respect, it shall be
interpreted to extend only over the maximum period of time for which it may be
enforceable and/or over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action. The existence of
any claim or cause of action that the Executive may have against the
Parent, the Company or any of their subsidiaries or affiliates shall not
constitute a defense or bar to the enforcement of any of the provisions of this
Agreement.


 


15.                                   No Amendment of
Certain Indemnification Provisions. The Employer Parties shall not amend or
modify their respective certificates of incorporation to reduce the breadth of
indemnification available thereunder for directors of the Employer Parties from
that in effect as of the date hereof. If an Employer Party shall enter into
indemnification agreements with its directors or officers providing
indemnification related to their positions as directors or officers, as
applicable, the Executive shall be entitled to enter into the same indemnification
agreement as the Employer Party shall enter into with such other directors or
officers, as applicable.


 


16.                                   Miscellaneous.
This Agreement shall be governed by and construed under the laws of the State
of Georgia, without consideration of its choice of law provisions, and shall
not be amended, modified or discharged in whole or in part except by an
agreement in writing


 


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signed by both of the parties hereto. The failure of either of the
parties to require the performance of a term or obligation or to exercise any
right under this Agreement or the waiver of any breach hereunder shall not
prevent subsequent enforcement of such term or obligation or exercise of such
right or the enforcement at any time of any other right hereunder or be deemed
a waiver of any subsequent breach of the provision so breached, or of any other
breach hereunder. This Agreement shall inure to the benefit of, and be binding
upon and assignable to, successors of the Employer Parties by way of merger,
consolidation or sale and may not be assigned by the Executive. This
Agreement supersedes and terminates all prior understandings and agreements
between the parties (or their predecessors) relating to the subject matter
hereof. For purposes of this Agreement, the term “person” shall be
construed broadly and shall include an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization or a
governmental authority (or any department, agency or political subdivision
thereof); a “subsidiary” of a person means any corporation more than 50
percent of whose outstanding voting securities, or any partnership, joint
venture or other entity more than 50 percent of whose total equity interest, is
directly or indirectly owned by such person; and an “affiliate” of a
person shall mean, with respect to a person or entity, any person or entity
which directly or indirectly controls, is controlled by, or is under common
control with such person or entity.


 


17.                                   Arbitration. Except
with respect to matters as to which injunctive relief may be sought
pursuant to Section 11 hereof, all disputes relating to the
Executive’s employment by the Company or the Parent or pursuant to this
Agreement shall be submitted to arbitration in Atlanta, Georgia and shall be
subject to the commercial arbitration rules of the American Arbitration
Association then in effect. Each of the Company, the Parent and the Executive
shall bear its or his own costs and expenses related to such arbitration; provided,
that, notwithstanding the foregoing, the Company shall pay that portion of the
Executive’s reasonable expenses relating to such dispute equal to the
percentage of claims, based on dollar amounts (out of the aggregate of such
claims adjudicated) (if at all) under which the Executive shall have prevailed
in the arbitration, as finally determined by the arbitrator, who shall
specifically be asked to render a decision on such point.


 


18.                                   Parachute Payment.
Notwithstanding any other provision of this Agreement or any other agreement,
if the aggregate payments and benefits payable to the Executive under this
Agreement and under any other plan, program, arrangement, or agreement of the
Parent or an affiliate would result in a “parachute payment” (within the
meaning of Section 280G of the Internal Revenue Code), then the payments
and benefits under this Agreement, or any other agreement, arrangement, program
or plan will be reduced to the minimum extent necessary to cause no such
parachute payment to occur, but such reduction will be made only if the
aggregate payments and benefits as so reduced would result in the Executive
retaining a larger after-tax (taking into account all income, employment and
excise taxes applicable to the Executive) amount than if no such reduction were
made. If such reduction is to be made, the Executive shall select which
payments and benefits will be reduced.


 


*       *       
*


 


12

















 


IN WITNESS WHEREOF,
the parties have executed this Employment Agreement as of the date first set
forth above.


 


	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
  MEDQUEST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ C. Christian Winkle

  	
   

  
	
   

  	
   

  	
  Name:  C. Christian Winkle

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  MQ ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ C. Christian Winkle

  	
   

  
	
   

  	
   

  	
  Name:  C. Christian Winkle

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /S/ Todd W. Latz

  	
   

  
	
   

  	
   

  	
  Todd W. Latz

  
					



 

















 


Schedule I


 


Restricted
Territory


 


1.                                       Georgia


2.                                       North
Carolina


3.                                       South
Carolina


4.                                       Arizona


5.                                       Florida


6.                                       Missouri


7.                                       Alabama


8.                                       Tennessee


9.                                       Virginia


10.                                 Texas


11.                                 Wisconsin


12.                                 New
Mexico


13.                                 Illinois


 

















 


Exhibit A


 


Form of General Release


 


In consideration of the
payments and benefits set forth in your Employment Agreement dated as of                       ,
2006 (as may be amended from time to time, the “Employment Agreement”)
with each of MQ ASSOCIATES, INC. and MEDQUEST, INC. (collectively, the “Companies”),
you voluntarily, knowingly and willingly release and forever discharge the
Companies, their subsidiaries, affiliates and parents, together with each of
those entities’ respective officers, directors, shareholders, employees,
agents, fiduciaries and administrators (collectively, the “Releasees”)
from any and all claims and rights of any nature whatsoever that you now have
or in the future may have against them solely arising from, or relating
to, your relationship with the Companies. This release includes, but is not
limited to, any rights or claims relating in any way to your employment
relationship with the Companies or any of the other Releasees or the
termination thereof, any contract claims (express or implied, written or oral),
or any rights or claims under any statute, including, without limitation, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Older Workers’ Benefit Protection Act, the Rehabilitation Act of 1973
(including Section 504 thereof), the Family Medical Leave Act,
Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C.
§ 1981), the Civil Rights Act of 1991, the Equal Pay Act, the Fair Labor
Standards Act, the National Labor Relations Act, the Worker Adjustment and
Retraining Notification Act, the Employee Retirement Income Security Act of
1974, all as amended, Georgia state law and any other federal, state or local
law. This release specifically includes, but is not limited to, any claims
based upon the right to the payment of wages, bonuses, vacation, pension benefits,
401(k) plan benefits, stock benefits or any other employee benefits (unless
expressly provided to be payable after the date hereof pursuant to the
Employment Agreement), or any other rights arising under federal, state or
local laws prohibiting discrimination and/or harassment on the basis of race,
color, age, religion, sex, national origin, mental or physical disability,
military status, harassment or any other basis prohibited by law.


 


By signing and returning this General Release, you acknowledge that
you:


 


(a)  have had at least twenty-one (21) days to review and consider
its terms;


 


(b)  have carefully read and fully understand the terms of this
General Release;


 


(c)  are entering into this General Release voluntarily and
knowing that you are releasing claims that you have or may have against
the Company, including any claims under the Age Discrimination in Employment
Act;


 


(d) have had a reasonable opportunity to seek advice from an
attorney of your choosing prior to signing this General Release;


 


(e) release all claims that arise up to and including the date of
execution of this General Release in return for the consideration specified in
the Employment Agreement, to which you otherwise would not have been entitled;
and


 

















 


(f) have been advised to consult an attorney before executing this
General Release.


 


You further represent that you
have not filed against the Companies or any of the other Releasees any
complaints, charges or lawsuits with any governmental agency or any court prior
to the date of this General Release.


 


You
understand that you may revoke this General Release in writing by so
notifying the General Counsel of MQ Associates, Inc., in
writing, at MedQuest, Inc., 4300 North Point Parkway, Alpharetta, GA 30022
(fax: (678) 992-7538) within
seven (7) days of executing this
General Release. You understand that if you revoke this General Release you
will not be entitled to any benefits as set forth in Section 6.d of
your Employment Agreement.


 


	
  Read, Accepted and Agreed to:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Todd W. Latz

  
	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  
				



 


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