<PAGE>
 
                                                                   EXHIBIT 10.11

                              EMPLOYMENT AGREEMENT
                              --------------------


     EMPLOYMENT AGREEMENT (the "Agreement") by and between Medical Resources,
Inc., a Delaware corporation (the "Company"), and Duane C. Montopoli (the
"Executive"), dated as of the 30th day of January, 1998 (the "Effective Date").

                             W I T N E S S E T H:

     1.   Employment Period. Subject to the terms and conditions of
          -----------------
this Agreement, the Company hereby agrees to employ the Executive and the
Executive hereby agrees to remain in the employ of the Company, for the period
commencing on the Effective Date and ending on the date this Agreement is
terminated in accordance with Section 3 (the "Employment Period").

     2.   Terms of Employment. (a) Position and Duties. (i) Commencing on the
          -------------------      -------------------
Effective Date and for the remainder of the Employment Period, the Executive
shall be the President and Chief Executive Officer of the Company and shall
report exclusively to the Company's Board of Directors (the "Board") and shall
have such duties, responsibilities and authority as shall be determined by the
Board, including, without limiting the authority of the Board, the authority to
make personnel decisions with respect to those employees of the Company that
will report, directly or indirectly, to Executive. In the event of the
acquisition of the Company by way of merger, sale of substantially all assets,
stock purchase or any other method, and if the Company either (A) is not the
surviving entity or (B) the Company becomes a subsidiary of the acquiror, then
the Executive shall report exclusively to the board of directors of such
surviving company or such parent. The Company shall cause the Executive to
become a member of the Board as of the Effective Date and to remain a member of
the Board during the Employment Period. The Executive shall be based at the
Company's offices in Hackensack, New Jersey, provided that the Executive shall
perform such duties and responsibilities not involving a permanent transfer of
his base of operations outside of Hackensack, New Jersey at such other places as
shall from time to time be necessary to fulfill his obligations hereunder.

     (ii) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote full time during normal business hours to the business and affairs of the
Company and to use the Executive's best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period the Executive
shall not be engaged in any other business activity whether or not such business
activity is pursued for gain, profit 
<PAGE>
 
or other pecuniary advantage, but this shall not be construed as preventing the
Executive from (A) serving on the board of directors of Chemfab Corporation and
Optima Healthcare, Inc. and (B) investing his personal assets in businesses
which do not compete with the Company in such form or manner as will not require
any services on the part of the Executive in the operation of the affairs of the
companies in which such investments are made and in which his participation is
solely that of an investor, and except that the Executive may purchase
securities in any corporation whose securities are regularly traded provided
that such purchase shall not result in his owning beneficially at any time,
other than through a registered investment company, one percent (1%) or more of
the equity securities of any corporation engaged in a business competitive with
that of the Company.

     (b)   Compensation. (i) Base Salary. During the Employment Period, the
           ------------      -----------
Executive shall receive an annual base salary ("Annual Base Salary") of
$275,000. The Annual Base Salary shall be paid in accordance with the normal
payroll practices of the Company, and may be increased (but not decreased) from
time to time, in the discretion of the Board.

           (ii)   Annual Bonus. In addition to Annual Base Salary, the 
                  ------------
Executive shall be eligible to receive an annual bonus (the "Annual Bonus") for
each calendar year during the Employment Period, provided that the Executive is
                                                 --------
employed on the last day of such calendar year. The target amount of the Annual
Bonus for any year shall be fifty percent (50%) of the Annual Base Salary in
effect for that year. The actual amount of the Annual Bonus for any calendar
year shall be determined by the Board at its discretion and paid no later than
60 days following the end of the calendar year for which the Annual Bonus is
awarded.

           (iii)  Stock Options. The Executive shall be granted, on the 
                  -------------
Effective Date, nonqualified stock options (the "Options") to acquire 600,000
shares of the common stock of the Company, $0.01 par value per share (the
"Common Stock"). The Options shall be divided into two tranches, referred to
herein as "Tranche A" and "Tranche B". Tranche A shall consist of options to
purchase 400,000 shares of Common Stock, at an exercise price per share equal to
the "Fair Market Value" (as defined below) of one share of Common Stock on the
Effective Date. Tranche B shall consist of options to purchase 200,000 shares of
Common Stock, at an exercise price per share equal to $14.50. The Options shall
have a term of ten years from the date of grant. Twenty percent (20%) of the
Tranche A and B Options shall vest and become exercisable on the Effective Date,
and the remaining eighty percent (80%) of each Tranche shall vest and become
exercisable in equal installments on the first, second, third and fourth

                                      -2-
<PAGE>
 
anniversary of the Effective Date; provided, however, that in the event of a
                                   --------  -------
"Change in Control" (as defined in Section 7), any outstanding unvested Options
in each Tranche shall become immediately vested and exercisable. For purposes of
this Agreement, "Fair Market Value" on the Effective Date means the average
between the high and low sale price for the Common Stock reported on the trading
day immediately preceding the Effective Date on which the Common Stock traded in
the National Market System of the National Association of Securities Dealers
Automated Quotation System. The Company will file, as soon as practicable but no
later than five months following the Effective Date, a registration statement in
order to allow Executive to sell any shares of Common Stock acquired through the
exercise of Options, and shall use its reasonable best efforts to keep such
registration effective during the period in which any of the Options remain
outstanding. All terms and conditions relating to the Options shall be set forth
in a stock option agreement to be executed by the Company and the Executive as
soon as practicable following the Effective Date, which shall, among other
things, provide for (A) substantially identical rights to those described in
Section 9 of the Company's 1996 Stock Option Plan (the "Plan"), or any successor
to Section 9 of the Plan, in the event of a "Change in Capitalization" (as
defined in the Plan) and (B) substantially identical rights to those described
in Section 10 of the Plan, or any successor to Section 10 of the Plan.

     (iv) Benefit Plans. During the Employment Period, the Executive and/or the
          -------------
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under employee benefit plans provided by the
Company (including, without limitation, medical, prescription, dental,
disability, salary continuance, group life, accidental death and travel accident
insurance plans and programs, and incentive, savings and retirement plans and
programs) to the extent applicable generally to other senior executives of the
Company. In addition, the Company shall use its best efforts to obtain, pay for
and keep in force during the Employment Period a term life insurance policy for
the benefit of a beneficiary named by the Executive, having death benefits in
the amount of $1,000,000.

     (v)  Insurance. The Company shall maintain such insurance for the
          ---------
protection of the Executive as is appropriate and customary for the officers and
directors of entities engaged in the Company's business. Such insurance shall
cover Executive with respect to his services for the Company and affiliates
thereof (including as a director, if applicable).

     (vi) Expenses. During the Employment Period, the Company shall pay or
          --------
promptly reimburse the Executive for all reasonable business expenses upon
presentation of receipts therefor in accordance with the normal practices of the
Company. 

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<PAGE>
 
In addition, the Company shall reimburse the Executive, upon presentation of
appropriate receipts, for the reasonable expenses incurred by the Executive in
transporting his household belongings to one location in the Hackensack, New
Jersey area from Salem, New Hampshire and North Andover, Massachusetts, and for
the cost of a reasonable and customary real estate commission incurred by the
Executive on the sale of his real property in North Andover, Massachusetts.

     (vii)  Automobile Allowance. During the Employment Period, the Executive
            --------------------
shall be reimbursed for the cost of leasing and insuring an automobile, up to a
maximum of $800.00 per month, increased as of each January 1 in the Employment
Period to reflect increases in the United States Consumer Price Index for All
Urban Consumers.

     (viii) Vacation. During the Employment Period, the Executive shall be
            --------
entitled to four weeks of paid vacation per year.

     (ix)   Temporary Housing. The Company will reimburse Executive for the cost
            -----------------
of renting a temporary home in the Hackensack, New Jersey area, at a total cost
not to exceed $3,500 per month, for the period commencing on the Effective Date
(or such later date on which the Executive first rents such home) and ceasing on
the earlier of (A) the date the Executive closes the sale of his real property
in North Andover, Massachusetts or (B) the six-month anniversary of the
Effective Date (the "Relocation Period"). In addition, the Company shall
reimburse the Executive for the cost of (X) one round-trip coach class airplane
ticket for the Executive from the Hackensack, New Jersey area to Boston,
Massachusetts for each two-weeks of the Relocation Period and (Y) three trips to
the Hackensack, New Jersey area for the Executive's spouse to assist the
Executive in obtaining a permanent residence, including round trip coach class
airfare from Boston, Massachusetts, and reasonable local travel and food
expenses during such trips.

                                      -4-
<PAGE>
 
          3. Termination of Employment. (a) Death or Disability. The Executive's
             -------------------------      -------------------
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Board determines in good faith that the "Disability"
(as defined below) of the Executive has occurred during the Employment Period,
it may terminate the Executive on account of such Disability. For purposes of
this Agreement, "Disability" shall mean the absence of the Executive from the
Executive's duties with the Company on a full-time basis for 90 consecutive
days, or 90 out of 120 consecutive days, as a result of incapacity due to mental
or physical illness which is determined by the Board to prevent the Executive
from performing his duties to the Company.

     (b)  With or Without Cause. The Company may terminate the Executive's
          ---------------------
employment during the Employment Period with or without Cause. For purposes of
this Agreement, "Cause" shall mean: (i) a material breach by the Executive of
the terms of this Agreement, (ii) the conviction of, plea of guilty or no
contest to, a felony or crime involving moral turpitude, or (iii) a failure by
the Executive to follow the reasonable lawful instructions of the Board;
provided that the Executive may be terminated for Cause pursuant to clause (iii)
--------
above only after a written demand for substantial performance is delivered to
the Executive by the Board, which specifically identifies the manner in which
the Board believes that the Executive has not followed the lawful instructions
of the Board, and the Executive fails to cure such noncompliance within thirty
days after receipt of such demand.

     (c)  With or Without Good Reason. The Executive's employment may be
          ---------------------------
terminated by the Executive with or without Good Reason. For purposes of this
Agreement, "Good Reason" shall mean in each case, without the Executive's prior
written consent:

          (i)   the assignment to the Executive of duties materially
inconsistent with the position, authority, duties or responsibilities customary
of the Chief Executive Officer of publicly traded corporations, excluding for
this purpose an action which is remedied by the Company within 30 days after
receipt of notice thereof given by the Executive; or

          (ii)  a material breach by the Company of this Agreement (and without
limitation, any breach by the Company of its obligations pursuant to the first
three sentences of Section 2 hereof shall be a material breach), other than a
breach which is remedied by the Company within 30 days after receipt of notice
thereof given by the Executive; or

          (iii) the approval by the Board of any transaction between the Company
and a director of the Company or an entity 

                                      -5-
<PAGE>
 
affiliated or associated with a director of the Company that would require
disclosure in a proxy statement pursuant to applicable rules and regulations of
the Securities Exchange Commission, where Executive has affirmatively dissented
to such transaction.

     (d)  Notice of Termination. Any termination by the Company or by the
          ---------------------
Executive shall be communicated to the other party by a "Notice of Termination"
(as defined below) to the other party hereto given in accordance with Section
10(e) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) if the "Date of Termination" (as defined Section 3(e)) is
other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such notice).
The failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause, whether or not known at the time, shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

     (e)  Date of Termination. "Date of Termination" means (i) if the
          -------------------
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be (although such Date of
Termination shall retroactively cease to apply if the circumstances providing
the basis of termination for Cause or Good Reason are cured in accordance with
Section 3(b) or 3(c) of this Agreement, respectively); (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, or
by the Executive without Good Reason, the Date of Termination shall be the date
of receipt of the Notice of Termination or any later date specified therein, as
the case may be; and (iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the first date on which the Board makes the determination that
the Executive shall be terminated as a result of his having been absent from his
duties to the extent required by the definition of Disability set forth in
Section 3(a) of this Agreement, as the case may be.

          4. Obligations of the Company Upon Termination. (a) Good Reason; Other
             -------------------------------------------      ------------------
Than for Cause or Disability. If the Executive shall terminate employment for
----------------------------
Good Reason or the

                                      -6-
<PAGE>

 
Company shall terminate the Executive's employment other than for Cause or
Disability:

         (i)   the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the sum of (A) the Executive's
Annual Base Salary through the Date of Termination to the extent not previously
paid ("Accrued Salary"), (B) if such termination occurs following the end of a
calendar year and, prior to or following such termination, an Annual Bonus for
such calendar year is determined by the Board acting in good faith to have been
earned, the amount of such Annual Bonus ("Accrued Bonus"), and (C) if such
termination occurs prior to the end of a calendar year, thereby causing
Executive to be ineligible for an Annual Bonus pursuant to Section 2(b)(ii)
hereof, an amount of bonus determined by the Board acting in good faith to have
been earned for the portion of such calendar year that Executive was employed
("Partial Bonus");

         (ii)  the Company shall continue to pay to the Executive his Annual
Base Salary, in effect as of the Date of Termination, for a period of eighteen
months following the Date of Termination, payable in accordance with the
Company's normal payroll practices; and

         (iii) the Company shall continue to provide to the Executive for a
period of eighteen months following the Date of Termination, benefits under
"employee welfare plans" (as defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended), other than the life insurance policy
referenced in the last sentence of Section 2(b)(iv), at least equal to those
which are provided to the senior executives of the Company during such period;
provided, however, that if the Executive becomes reemployed with another
--------  -------
employer and is eligible to receive any of such benefits under another employer
provided plan at the other employer's cost, other than reasonable and customary
employee contributions (whether or not he actually elects to receive such
benefits), the corresponding benefits described herein shall be terminated;
further, provided, however, that the Company shall not be required to provide
-------  --------  -------
any such benefit if the effect thereof would be to violate the terms of any law,
plan or insurance policy or jeopardize the tax benefit associated with such
benefit to which the Company otherwise would be entitled, but in such event, the
Company shall pay to the Executive, in cash, an amount equal to the cost of
providing such benefit. Any such benefits provided by another employer shall be
promptly reported by the Executive to the Company as the Executive becomes
eligible therefor.

     (b)  Death, Disability, With Cause, Without Good Reason. If the Executive's
          --------------------------------------------------
employment is terminated by reason of the Executive's death, Disability,
termination by the Company with Cause or termination by the Executive without
Good Reason, this

                                      -7-
<PAGE>
 
Agreement shall terminate without further obligations to the Executive or his
legal representatives under this Agreement, other than for payment of Accrued
Salary and, in the case of a termination by reason of death or Disability,
payment of Accrued Bonus and Partial Bonus, which shall be paid to the Executive
or his estate or beneficiary, as applicable, in a lump sum in cash within 30
days following the Date of Termination. If the Executive's employment is
terminated for Cause, nothing in this Agreement shall prevent the Company from
pursuing any other available remedies against the Executive.

          5.  Confidential Information; Nonsolicitation; Noncompetition;
              ---------------------------------------------------------
Nondisparagement. (a) The Executive shall hold in a fiduciary capacity for the
----------------
benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it.

     (b)  The Executive hereby covenants and agrees that for eighteen months
following the termination of the Executive's employment for any reason, the
Executive shall not, directly or indirectly, employ or seek to employ any person
who is at the Date of Termination, or was at any time within the six-month
period preceding the Date of Termination, an employee of the Company or any of
its subsidiaries or affiliates or otherwise cause or induce any employee of the
Company or any of its subsidiaries or affiliates to terminate such employee's
employment with the Company or such subsidiary or affiliate for the employment
of another company.

     (c)  The Executive hereby covenants and agrees that during the Employment
Period and for eighteen months following the termination of the Executive's
employment for any reason, the Executive will not, without the prior written
consent of the Company, engage in "Competition" (as defined below) with the
Company. For purposes of this Agreement, if the Executive takes any of the
following actions he will be engaged in "Competition:" engaging in or carrying
on, directly or indirectly, any enterprise, whether as an advisor, principal,
agent, partner, officer, director, employee, stockholder, associate or
consultant to any person, partnership, corporation or any other business entity,
that is principally engaged in any business in which the

                                      -8-
<PAGE>
 
Company is engaged, or is contemplating becoming engaged, on the Date of
Termination, in any area in which the Company is then engaged, or is then
contemplating being engaged, in such business; provided, however, that
                                               --------  -------
"Competition" will not include (i) the mere ownership of securities in any
enterprise and exercise of rights appurtenant thereto or (ii) participation in
management of any enterprise or business operation thereof other than in
connection with the competitive operation of such enterprise.

     (d)  The Executive hereby covenants and agrees that during the Employment
Period and for eighteen months following the termination of the Executive's
employment for any reason, the Executive will not assist a third party in
preparing or making an unsolicited bid for the Company, engaging in a proxy
contest with the Company, or engaging in any other similar activity.

     (e)  During the Term and for eighteen months following the termination of
the Executive's employment for any reason, the parties hereto each agree not to
make disparaging public statements concerning the other, provided that nothing
herein shall prevent either party hereto from enforcing its rights hereunder;
further, provided that the foregoing shall not prohibit Executive from making
good faith comparative claims regarding the products and services of the Company
and those of an entity by which Executive may be employed following termination
of his employment hereunder, if the making of such claims does not otherwise
violate this Agreement.

     (f)  The Executive acknowledges that a breach of any of the covenants
contained in Section 5(a), (b), (c), (d) or (e) may result in material
irreparable injury to the Company for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injury precisely and
that, in the event of such a breach or threat thereof, the Company shall be
entitled to a temporary restraining order and/or a preliminary or permanent
injunction, restraining the Executive from engaging in such prohibited
activities or such other relief as may be required specifically to enforce any
of the covenants contained therein. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies for such breach or
threatened breach.

     (g)  The restrictions set forth in Section 5(a), (b), (c), (d) and (e) are
considered by the parties hereto to be reasonable for the purposes of protecting
the business of the Company. However, if any such restriction is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it is the intention of the parties that such restriction shall
be interpreted to extend only over

                                      -9-
<PAGE>
 
the maximum period of time, range of activities or geographic area as to which
it may be enforceable.

          6.  Post-Termination Assistance. The Executive agrees that after his
              ---------------------------
employment with the Company has terminated he will provide, upon reasonable
notice, such information and assistance to the Company as may reasonably be
requested by the Company in connection with any audit, governmental
investigation or litigation in which it or any of its affiliates is or may
become a party; provided, however, that (a) the Company agrees to reimburse the
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Executive for any related out-of-pocket expenses, including travel expenses,
and, if the Executive is not then being paid severance pursuant to Section
4(a)(ii), to pay the Executive reasonable compensation for his time based on his
rate of Annual Base Salary at the time of termination and (b) any such
assistance may not unreasonably interfere with the then-current employment of
the Executive.

          7.  Change in Control. For purposes of this Agreement, a "Change in
              -----------------
Control" shall mean:

     (a)  The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more (on a
fully diluted basis) of either (i) the then outstanding shares of Common Stock,
taking into account as outstanding for this purpose such shares issuable upon
the exercise of options or warrants, the conversion of convertible shares or
debt, and the exercise of any similar right to acquire shares (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors or member managers (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Section 7(a), the following
acquisitions shall not constitute a Change in Control: (A) any acquisition by
the Company or any "affiliate" of the Company, within the meaning of 17 C.F.R.
(S) 230.405 (an "Affiliate"), (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Affiliate of
the Company, (C) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of Section 7(c), or (D) any
acquisition by any entity in which the Executive has a direct or indirect equity
interest of greater than five percent; or

     (b)  Individuals who, as of the Effective Date, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
       --------  -------
the 

                                      -10-
<PAGE>
 
Effective Date whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (c)  Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of
the then outstanding shares of common stock or interests and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation or other
entity resulting from such Business Combination (including, without limitation,
a corporation or entity which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, and (ii) no Person (excluding (A) any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate of the Company,
or such corporation resulting from such Business Combination or any Affiliate of
such corporation, or (B) any entity in which the Executive has a direct or
indirect equity interest of greater than five percent or any Affiliate of such
entity) beneficially owns, directly or indirectly, 50% or more (on a fully
diluted basis) of, respectively, the then outstanding shares of common stock or
interests of the corporation or entity resulting from such Business Combination,
taking into account as outstanding for this purpose such common stock or
interests issuable upon the exercise of options or warrants, the conversion of
convertible stock, interests or debt, and the exercise of any similar right to
acquire such common stock or interests, or the combined voting power of the then
outstanding voting securities of such corporation or other entity except to the
extent that such ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors or equivalent
governing body of the corporation or other entity 

                                      -11-
<PAGE>
 
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

     (d)  Approval by the shareholders or equityholders of the Company of a
complete liquidation or dissolution of the Company.

          8. Successors (a) This Agreement is personal to the Executive and
             ----------
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
heirs and personal and legal representatives.

     (b)  This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

          9. Indemnification. (a) Indemnification. Executive shall be
             ---------------      ---------------
indemnified and held harmless by the Company to the fullest extent permitted by
applicable law, as the same exists or may hereafter be amended, against all
expenses, liability and loss (including attorneys' fees, judgments, fines, and
amounts paid or to be paid in any settlement approved in advance by the Company,
such approval not to be unreasonably withheld) (collectively, "Indemnifiable
Expenses") actually incurred or suffered by Executive in connection with any
present or future threatened, pending or contemplated investigation, claim,
action, suit or proceeding, whether civil, criminal, administrative or
investigative, to which Executive is a defendant, is threatened to be made a
defendant, or is or has been identified as a target in connection with any
criminal investigation or proceeding by reason of any action or inaction taken
by Executive, within the scope of Executive's present or former employment by,
or service as a director for, the Company in Executive's capacity as an officer,
employee or director of the Company or any of its subsidiaries or affiliates
(collectively, "Indemnifiable Litigation").

     (b)  Advance Payment of Interim Expenses. The Company agrees to pay
          -----------------------------------
promptly Indemnifiable Expenses incurred by Executive in connection with any
Indemnifiable Litigation in advance of the final disposition thereof, provided
                                                                      --------
that the Company has received an undertaking by or an behalf of Executive, to
the extent required by law, to repay the amount so advanced to the extent that
it is finally adjudicated by court order or judgment from which no further right
of appeal exists that Executive is not entitled to be indemnified by the Company
under this Agreement or otherwise. The advances to be made hereunder shall be
paid by the Company to Executive within ten (10)

                                      -12-
<PAGE>
 
business days following delivery of a written request therefor by Executive to
the Company.

     (c)  Provision of Counsel Where Executive Is Not A Defendant Or Target. The
          -----------------------------------------------------------------
Company shall provide Executive with legal representation, at no cost to the
Executive, in the event that the Executive shall be called upon to provide sworn
testimony in connection with any investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative
(collectively a "Non-Party Proceeding") as to which Executive is not a defendant
or target. The Company may designate one counsel to represent both the Company
and/or one or more directors or officers of the Company. Executive may reject
the counsel designated and require the Company to designate other counsel only
in the event that designated counsel has a disqualifying conflict of interest.
Executive may, at his own expense, retain counsel of his own choosing at any
time.

     (d)  Procedure for Making Demand. Executive shall, as a condition precedent
          ---------------------------
to his rights under this Section 9, give the Company notice in writing as soon
as practicable of any claim or demand made against Executive for which
indemnification or the provision of counsel will or could be sought under this
Section 9. No failure to give such notice shall relieve the Company from any
obligations hereunder, except to the extent, if any, such failure shall
materially and adversely affect and prejudice the Company. Notice to the Company
shall be directed to the Company at the address set forth in Section 10(e)
hereof (or such other address as the Company shall designate in writing to
Executive). In addition, Executive shall give the Company such information and
cooperation as it may reasonably require and as shall be within Executive's
power, unless prohibited by law. Any indemnification or appointment of counsel
provided for hereunder shall be made no later than ten (10) business days after
receipt of the written request of Executive.

     (e)  Failure to Indemnify. (i) If a claim under this Section 9 for
          --------------------
indemnification or appointment of counsel is not paid in full by the Company or
satisfied within ten (10) business days after a written request for payment
thereof has been received by the Company, Executive may, but need not, at any
time thereafter bring an action against the Company and, if successful in whole
or in part, Executive shall also be entitled to be paid all expenses (including
attorneys' fees and expenses) of bringing such action.

          (ii) It shall be a defense to such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action,
suit or proceeding in advance of its final disposition) that Executive has not
met the standard of conduct which make it permissible under applicable law for
the

                                      -13-
<PAGE>
 
Company to indemnify Executive for the amount claimed, but the burden of proving
such defense shall be on the Company and Executive shall be entitled to receive
interim payments of interim expenses pursuant to Section 9(b) hereof unless and
until such defense may be finally adjudicated by court order or judgment from
which no further right of appeal exists. It is the parties' intention that if
the Company contests Executive's right to indemnification, the question of
Executive's right to indemnification shall be for the Court to decide, and
neither the failure of the Company (including the Board, independent legal
counsel or its stockholders) to have made a determination that indemnification
of Executive is proper in the circumstances because Executive has met the
applicable standard of conduct required by applicable law, nor an actual
determination by the Company (including the Board, any committee or subgroup of
the Board, independent legal counsel, or its stockholders) that Executive has
not met such applicable standard of conduct, shall create a presumption that
Executive has or has not met the applicable standard of conduct.

     (f)  Notice to Insurers. At the time of the receipt of a notice of a claim
          ------------------
pursuant to Section 9(c) hereof, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective director and officer liability insurance
policies. The Company shall thereafter take all necessary or desirable action to
cause such insurers to pay, on behalf of the Executive, all amounts payable as a
result of such proceeding in accordance with the terms of such policies.

     (g)  Retention of Counsel. In the event that the Company shall be obligated
          --------------------
to pay Indemnifiable Expenses under Section 9(a) of this Agreement as a result
of any proceeding against Executive, the Company shall be entitled to assume the
defense of such proceeding, with counsel approved by Executive, which approval
shall not be unreasonably withheld, upon the delivery to Executive of written
notice of its election to do so. The Executive may withhold such approval if he
reasonably concludes that there may be a conflict of interest or position on any
significant issue between the Company and the Executive in the conduct of the
defense of such proceeding. After delivery of such notice, approval of such
counsel by Executive and the retention of such counsel by the Company to
represent the Executive, the Company will not be liable to Executive under this
Agreement for any fees of any other counsel subsequently incurred by Executive
with respect to that same proceeding; provided, however, that in the event of a
                                      --------  -------
proceeding brought by shareholders of the Company in the right of the Company,
the Company agrees to retain counsel which is different and separate from the
Company's counsel to represent Executive in such proceeding, subject to the
other terms and conditions of this Section 9(g).

                                      -14-
<PAGE>
 
     (h)  Contract Rights Not Exclusive. The contract rights conferred by this
          -----------------------------
Section 9 shall be in addition to, but not exclusive of, any right which
Executive may have or may hereafter acquire under any statute, provision of the
Company's Certificate of Incorporation or Bylaws, agreement, vote of
shareholders or disinterested directors, or otherwise. Nothing in this Section 9
shall be construed to affect or modify any much right.

     (i)  Attorneys' Fees. In the event that any action is instituted by
          ---------------
Executive under this Agreement to enforce or interpret any of the terms of this
Section 9 and Executive prevails or substantially prevails in such action,
Executive shall be entitled to be paid all court costs and expenses, including
reasonable attorneys' fees, incurred by Executive with respect to such action.
In the event of an action instituted by or in the name of the Company under this
Section 9 to enforce or interpret any terms hereof and Executive prevails or
substantially prevails in such action, Executive shall be entitled to be paid
all court costs and expenses, including attorneys' fees, incurred by Executive
in defense of such action (including with respect to Executive's counterclaims
and cross-claims made in such action).

          10. Miscellaneous. (a) Governing Law. This Agreement shall be governed
              -------------
by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.

     (b)  Captions and Amendments. The captions of this Agreement are not part
          -----------------------
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

     (c)  Stipulation. Executive hereby stipulates to the Company that on the
          -----------
date of this Agreement, neither Executive nor his affiliates has any claim of
any type against the Company, except claims that may arise under this Agreement,
and represents and warrants that this Agreement does not conflict with any other
agreement to which Executive is a party.

     (d)  Construction. The parties have participated jointly in the negotiation
          ------------
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless 

                                      -15-
<PAGE>
 
the context requires otherwise. The word "including" shall mean including
without limitation.

     (e)  Notices. All notices and other communications hereunder shall be in
          -------
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

                           If to the Executive:
                           -------------------

                           Mr. Duane C. Montopoli
                           Medical Resources, Inc.
                           155 State Street
                           Hackensack, New Jersey 07601
                           Tel: 201 488-6230
                           Fax: 201 488-8455

                           With a copy to:

                           Bingham Dana LLP
                           150 Federal Street
                           Boston, Massachusetts 02110
                           Attn: David O. Johanson, Esq.
                           Tel: 617 951-8304
                           Fax: 617 951-8736


                           If to the Company:
                           -----------------

                           Medical Resources, Inc.
                           155 State Street
                           Hackensack, New Jersey 07601
                           Tel: 201 488-6230
                           Fax: 201 488-8455

                           With a copy to:

                           Willkie Farr & Gallagher
                           153 East 53rd Street
                           One Citicorp Center
                           New York, New York 10022
                           Attn: Michael J. Segal, Esq.
                           Tel: 212 821-1514
                           Fax: 212 821-1555

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                                      -16-
<PAGE>
 
     (f)  Legal Fees. The Company agrees to pay as incurred, all legal and
          ----------
professional fees and expenses which the Executive may reasonably incur as a
result of negotiation, preparation and subsequent amendment of, or supplement
to, this Agreement, provided that such amount shall not exceed $15,000 with
respect to the initial negotiation and execution of this Agreement, and shall
not exceed an amount reasonably agreed upon by the Company and the Executive
with respect to any subsequent amendment of this Agreement. In addition, the
Company agrees to pay and be financially responsible for 100% of any and all
reasonable attorneys' and related fees and expenses incurred by Executive in
connection with any dispute associated with the interpretation, enforcement or
defense of Executive's rights under this Agreement, by litigation or otherwise,
provided that, in regard to such dispute, Executive has prevailed or
substantially prevailed with respect to at least one material issue; further,
provided, that this Section 10(f) shall not apply to Section 9 of this Agreement
(to which Section 9(i) applies).

     (g)  Enforceability. The invalidity or unenforceability of any provision of
          --------------
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

     (h)  Withholding. The Company may withhold from any amounts payable under
          -----------
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

     (i)  No Waiver. The Executive's or the Company's failure to insist upon
          ---------
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. No waiver of any provision of
this Agreement by the Company or the Executive shall be effective unless it is
in a writing signed by the party against whom enforcement is sought.

          IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.

                                              DUANE C. MONTOPOLI



                                              ------------------------

                                      -17-
<PAGE>
 
                                              MEDICAL RESOURCES, INC.



                                              By:
                                                 ---------------------------
                                                 Name:  Gary N. Siegler
                                                 Title: Chairman of the Board of
                                                        Directors





                                     -18-