Exhibit 10.36


 


EMPLOYMENT AGREEMENT
dated as of October 24, 2005 (as amended, modified or supplemented from time to
time, this “Agreement”), among C.  CHRISTIAN WINKLE (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
desires to employ the Executive, and the Executive desires to be employed by
the Company, on the terms and conditions contained herein.


 


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 fifth
anniversary of the Effective Date, subject to automatic annual extensions for
successive periods of one year each as of the fifth 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 the Chief Executive Officer
of the Company and the Parent, reporting to the Board of Directors of the
Company (the “Board of Directors”) and the Parent, as applicable, and
(b) shall manage the Company’s and the Parent’s affairs, consistent with the
Executive’s position as Chief Executive Officer, provided  that,
in all cases the Executive shall be subject to the oversight and supervision of
the Board of Directors in the performance of his duties, (c) shall be nominated
for election to the Board of Directors of each of the Company and the Parent, (d)
upon the request of the Board of Directors, shall serve as an officer and/or
director of any of the Company’s subsidiaries and/or other affiliates, and (e)
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.  Subject
to Section 8.e, 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, 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
$500,000.00 per annum, subject to annual review by the Board of Directors for
possible increases, but it shall not be reduced below its then current level
prior to such review (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 Board of Directors and set forth
in writing by the Company and provided to the Executive no later than 90 days
after the beginning of the fiscal year for which the Annual Bonus is to be
earned.  If 100% of the Bonus Objectives
shall be satisfied by the Executive, such Annual Bonus shall be equal to at
least 80% of the Base Salary (the “Target Annual Bonus”).  The Annual Bonus will be reduced or increased
ratably if less than or more than 100%, as applicable, of such Bonus Objectives
shall be satisfied by the Executive. 
Notwithstanding the foregoing, the Annual Bonus for 2006 will be not
less than 40% of the Base Salary.  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.  The Annual Bonus for any fiscal year, if any,
will be payable no later than 2-1/2 months following the last day of the
relevant fiscal year.


 


c.            2005
Bonus.  The Executive shall be
entitled to receive a one-time prorated 2005 bonus in the amount of $90,000,
payable to the Executive no later than January 15, 2006, so long as the
Executive is continually employed hereunder from the Effective Date through
December 31, 2005.  No other bonus shall
be payable to the Executive for any period prior to December 31, 2005.


 


d.            Stock
Options.  As of the Effective Date, the
Executive shall be entitled to receive from the Parent options (the “Options”)
to purchase 6,500,000 shares of the Parent’s common stock, par value $0.001 per
share (the “Common Stock”).  The Parent
and the Executive shall execute definitive documentation with respect to the
grant of the Options (the “Option Documents”) not later than sixty (60)
days after the Effective Date (or such later date as the Parent and the
Executive shall agree upon mutually acceptable Option Documents).  The Option Documents shall provide that the
Options shall vest as follows: (a) 1/12 of the Options shall vest ratably on
each of the dates that is six months, 12 months, 18 months, 24 months, 30
months and 36 months from and after the Effective Date (each of the foregoing
six dates, a “Time Vesting Date”); and (b) 1/6 of the Options shall vest
upon the Parent’s annual realization of certain “EBITDA” targets (to be defined
and mutually agreed upon in the Option Documents),


 


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as shall be set forth in the Option Documents, as measured on each of
December 31, 2006, December 31, 2007 and December 31, 2008; provided,
that, in the event of any termination of the Executive without Cause or any
resignation by the Executive for Good Reason, (i) the portion of the Options
scheduled to so vest upon the Time Vesting Date next succeeding the date of
termination or resignation shall vest on the date of such termination or resignation
and (ii) the portion of the Options eligible for EBITDA-based vesting pursuant
to the preceding clause (b) in the calendar year of such termination or resignation
shall vest as of the date of such termination or resignation; provided, further,
that all of the unvested Options shall vest upon the occurrence of a Sale of
the Company (to be defined in the Option Documents as defined in the
Stockholders’ Agreement, and to include any transaction that would be “Sale of
the Company” if “MedQuest, Inc.” were substituted for “MQ Associates, Inc.” in
such definition).  The Options shall be
subject to the terms of the Parent’s 2003 Stock Option Plan.  The exercise price of the Options will be equal
to $0.65 per share.


 


Except as set forth above, upon the termination of the Executive’s
employment with the Company for any reason, any unvested Options will cease to
vest on the date of such termination, and vested Options will be exercisable
for variable periods depending on the reason for such termination, as will be
set forth in further detail in the Option Documents; provided, however,
that in the event that the Executive’s employment is terminated by the Company
without Cause or by the Executive for Good Reason, or the Executive dies or
becomes subject to a Disability during the Employment Period, the Executive (or
his legal representative in the event of death or Disability) shall have not
less than three months following the termination of the Employment Period to
exercise the vested portion of the Options. 
Except as set forth in the preceding sentence, the Options will have a
term of 10 years.  The Option Documents
shall provide that in connection with an exercise of Options upon, or in
contemplation of, any Sale of the Company (as previously defined herein), the
Executive shall be entitled to satisfy the amount of required tax withholding
in cash, or at the Executive’s election, by the Executive electing to reduce
the number of shares of Common Stock that he receives upon exercise of the
Options by a number of shares of Common Stock with a value, to be determined
based upon the implied price per share of Common Stock to be paid in connection
with the Sale of the Company, equal to the amount of the required tax
withholding.


 


Any shares of Common Stock received by the Executive upon exercise of
the Options, and any other shares of capital stock of the Parent held at any
time by the Executive, howsoever received, shall be subject to, and the
Executive covenants and agrees to be bound by the terms of (including, without
limitation, Sections 2.5 and 2.6 thereof), and to execute and
deliver a joinder agreement with respect to, 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”),
as modified, solely between the Parent and the Executive, by Section 4.e
below, as a “Management Stockholder” thereunder.


 


e.            Certain
Provisions Relating to the Stockholders’ Agreement.  Notwithstanding anything herein or in the
Stockholders’ Agreement (including Section 6.1 thereof) to the contrary,
the following modifications to the respective provisions of the Stockholders’
Agreement shall apply as between the Parent and the Executive only with respect
to the Stockholders’ Agreement:


 


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(i)               The
Executive acknowledges and agrees that Section 2.5 of the Stockholders’
Agreement shall apply to the Executive and the Options from and after the
Effective Date, with the Executive being a “Stockholder” and the Options being “Stockholder
Shares,” (in each case as defined therein), and that the Executive shall not
have any rights under Section 2.5(d) and Section 2.7 of the
Stockholders’ Agreement;


 


(ii)              The
following definition of “Fair Market Value” shall apply to the Executive (and
any and all of the Executive’s Stockholder Shares (as defined in the
Stockholders’ Agreement)):


 


                   “‘Fair
Market Value’ shall mean, with respect to any Stockholder Share, as of any
date of determination, an amount equal to the quotient obtained by dividing
(i)(x) the product of (a) 7.0 and (b) TTM EBITDA less (y) the aggregate
indebtedness for money borrowed, net of cash and cash equivalents, of MQ
Associates, Inc. on a consolidated basis at the time of such determination, by
(ii) the number of outstanding shares of capital stock of MQ Associates, Inc. determined
on a fully-diluted basis after giving effect to the exercise or exchange of all
Common Stock Equivalents;


 


(iii)             The
repurchase rights of the Parent or its designee described in Section 2.6
of the Stockholders’ Agreement shall expire on the date that is 180 days after
the termination of the Employment Period; provided, however, that (x) if
such repurchase by the Parent on the date of such termination or the period of
180 days thereafter 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, then such 180 day
period shall commence on the first day following the date on which such
repurchase would not result in such a violation or default, and (y) if the
repurchase shall occur on a date after the 180th day following the
termination of the Employment Period because of the potential violations and/or
defaults described in the foregoing subclause (x), then notwithstanding Section
2.6(a) of the Stockholders’ Agreement, Fair Market Value of the relevant Stockholder
Shares shall be determined as of the last day of the calendar month ending on,
or immediately before, the date of the consummation of the repurchase;


 


(iv)             
From and after the Effective Date, Section 2.6 of the Stockholders’
Agreement shall not be amended in any manner that materially adversely affects
the Executive’s rights thereunder without the Executive’s written consent;


 


(v)              The
definition of “Cause” under the Stockholders’ Agreement shall be the definition
of Cause set forth herein, solely as related to the Executive thereunder; and


 


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(vi)             The
parties hereto acknowledge that the Executive shall not be required to
reimburse the Employer Parties for any expenses incurred by such Employer
Parties under Section 2.6(e) of the Stockholders’ Agreement.


 


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 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 weeks of
unused vacation for which the Executive shall be compensated if the Executive’s
employment is terminated, unless such termination is for Cause, in which case
no such compensation shall be paid.


 


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


 


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and its affiliates that causes material harm to the Parent or its
affiliates, or which continues after the Board of Directors notifies the
Executive in writing of the failure, (ii) gross negligence or willful
misconduct by the Executive in the performance of his duties, or failure by the
Executive to follow the instructions of the Board of Directors, which failure
shall not be cured by the Executive within ten days following written notice by
the Company to the Executive of such failure, (iii) 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. 
Notwithstanding the foregoing, termination of the Employment Period
shall not be deemed to be by the Company for Cause unless the Company provides
written notice to the Executive not later than thirty (30) business days after
the effective date of the termination of the Employment Period, which notice
identifies the termination as for “Cause” and sets forth a reason or reasons
therefor.


 


b.            Termination
by the Executive.  The Employment
Period may be terminated by the Executive by written notice to the Board of
Directors without Good Reason at least 90 days prior to such termination and
with Good Reason at least 7 days prior to such termination, such termination to
be effective on the date specified in such notice.  “Good Reason” means the material
breach by the Company of this Agreement (including without limitation, any
demotion of the Executive, a material change in the Executive’s duties that is
inconsistent with the terms of this Agreement, or a reduction in the Executive’s
Base Salary or Target Annual Bonus opportunity), which material breach (if
susceptible to cure) is not cured by the Company within ten days following the
written notice by the Executive to the Company of such breach, it being agreed
that the failure to pay any Annual Bonus with respect to any fiscal year
pursuant to the last sentence of Section 4.b shall not constitute Good
Reason hereunder so long as such Annual Bonus shall be paid no later than 20
days following the delivery of the opinion of the Parent’s accountants with
respect to the audited consolidated financial statements of the Parent and its
subsidiaries for such fiscal year.  In
addition, 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 will be deemed to be a material breach of this Agreement by the
Company and shall not require that the Executive so relocate to claim breach; provided,
however, that if the Executive consents to such relocation, or actually
relocates, the Executive may not thereafter claim it to be a material breach.


 


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


 


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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 Company 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 Section 4(d) hereof) 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.


 


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 twenty-four (24) 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
4(d) hereof) or, within 180 days thereafter, the Termination Benefits set forth
in clause (i) 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


 


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promptly as practicable.  Any such delay in making such payments shall
not be deemed to be a violation of this Agreement.  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 Company 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 Board of Directors.


 


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 Bonus
Objectives shall be 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, the continuing right with respect to the Options as
provided herein and under the terms of the Option Documents, 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


 


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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
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.            Except
as provided in the Employment Agreement dated January 1, 2005 between the
Executive and SavaSeniorCare LLC and the consulting agreement appended thereto
(the “Sava Agreement”), 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 use or disclosure of
information or 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 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
materially interfere with the Executive’s performance of his obligations and
duties hereunder and the Executive shall advise and update the Board (including
providing copies of notices, agreements and other relevant documentation) from
time to time and as requested by the Board 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


 


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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 $450 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 Board of Directors and without
additional compensation or consideration, any business prospects, contracts or
other business opportunities that the Executive may discover, find, 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


 


10

















 


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 business relationship.  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 two (2) years 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 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, 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 six (6) months after such individual’s employment
relationship with such Employer Party has been terminated


 


11

















 


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.


 


e.            During
the Employment Period, upon receipt of the prior written permission of the
Board of Directors, the Executive may also serve as a director of additional
companies that are not affiliates of the Company (“Other Companies”) so
long as (i) such board service does not interfere with the performance of the
Executive’s duties hereunder and (ii) such Other Companies are not engaged in
competition with the Company or any of its affiliates.  Notwithstanding the foregoing, the Executive
shall not perform or provide any further consulting or other services, or make
or allow to be made any additional commitment of the Executive’s time, to any
Other Company.


 


9.              Non-Disparagement.  From the Effective Date through the date that
is the third 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.


 


10.            Certain
Restrictions on Transfers; Fees in Connection with Certain Sales of Common
Stock.


 


a.            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


 


12

















 


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.


 


b.            The
Company shall indemnify and hold the Executive harmless from and against that
portion, if any, of the expenses allocated to the Executive pursuant to Section
2.5(c)(iv) of the Stockholders’ Agreement in connection with an Approved
Sale (as defined in the Stockholders’ Agreement) in excess of the actual
proceeds received by the Executive in connection with such Approved Sale.


 


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: Board of Directors


 


with a copy to:


 


MedQuest, Inc.


4300 North Point Parkway


Alpharetta, GA 30022


Fax: (678) 992-7538


Attention: General Counsel


 


13

















 


with a further copy to:


 


O’Melveny and Myers LLP


7 Times Square


New York, New York 10036


Fax: (212) 408-2420


Attention: Ilan S. Nissan


 


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


 


14

















 


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 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. 
In the event of a breach by the Executive of the provisions of this
Agreement, each of the Parent or the Company is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all amounts at any time held by any Employer Party on behalf of
the Executive and all indebtedness or obligations at any time owing by any of
the Parent or the Company to the Executive against any and all of the
obligations of the Executive now or hereafter existing, with the exception of
any equity ownership interest of the Executive in the Parent, which shall not
be offset in any manner.


 


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


 


15

















 


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.


 


*      
*        *


 


16

















 


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


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  MEDQUEST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald C. Tomasso

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Tomasso

  
	
   

  	
   

  	
  Title: Interim Chairman and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  MQ ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donald C. Tomasso

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Tomasso

  
	
   

  	
   

  	
  Title: Interim Chairman and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /S/ C. Christian Winkle

  	
   

  
	
   

  	
   

  	
  C. Christian Winkle

  



 


 


[Signature page to Employment Agmnt]


 


17

















 


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

  



 


18

















 


Exhibit A


 


Form of General Release


 


In consideration of the payments and benefits set forth in your
Employment Agreement dated as of October 24, 2005 (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


 


19

















 


(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:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  C. Christian Winkle

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				



 


20