Exhibit 10.18


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Employment
Agreement”) is dated as of December 31, 2008 and is between UNIVERSAL HOSPITAL SERVICES, INC., a
Delaware corporation (the “Company”), and Rex Clevenger (the “Executive”).  This
Employment Agreement amends and restates the employment agreement between the
Executive and the Company dated May 31, 2007, as amended by letter dated July 27,
2007.


 


The Company wishes to continue to employ the
Executive, and the Executive wishes to remain employed with the Company, on the
terms and conditions set forth in this Employment Agreement.  This Employment Agreement replaces any
existing employment agreement between the Executive, on the one hand, and Company
or any of its subsidiaries or predecessor entities, on the other hand, and the
parties acknowledge that the Executive has no remaining rights, obligations or
entitlements under any such agreement, other than (i) any rights or
entitlements of the Executive to indemnification or coverage under any
directors and officers indemnity insurance, and (ii) with respect to any
equity owned by Executive or options or other awards granted to the Executive.


 


Accordingly, the Company and the Executive agree as follows:


 


1.             Position;
Duties.  The Company agrees to employ
the Executive, and the Executive agrees to serve and accept employment, for the
Term (as defined below) as Executive Vice President and Chief Financial Officer
of the Company, subject to the direction and control of the Chief Executive
Officer and the Board of Directors (the “Board”) of UHS Holdco, Inc.,
the parent of the Company (“Parent”), and, in connection therewith, to
reside in the Minneapolis, Minnesota area, to oversee and direct the development
and execution of the financial operations of the Company and to perform such
other duties as the Chief Executive Officer and Board may from time to time
reasonably direct.  The Executive’s place
of employment will be in the Minneapolis, Minnesota area.  The Executive shall have all of the
authorities, duties and responsibilities commensurate with his position.  During the Term, the Executive agrees to
devote substantially all of his time, energy, experience and talents during
regular business hours, and as otherwise reasonably necessary, to such
employment, and not to engage in any other business activities of a material
nature, as an employee, director, consultant or in any similar capacity,
whether or not the Executive receives any compensation therefor, without the
prior written consent of the Board, provided,
that the Executive shall be entitled to engage in such other business
activities as do not unreasonably conflict with the Executive’s duties and
responsibilities to the Company pursuant to this Employment Agreement upon
notice to and consent by the Company, which consent will not be unreasonably
withheld.  The Executive will not be
given duties inconsistent with his executive position.


 


2.             Term
of Employment Agreement.  The term of
the Executive’s employment hereunder began as of May 31, 2007, and will
end as of the close of business on the third anniversary of the date hereof
subject to earlier termination pursuant to the terms hereof (including the
Renewal Term, as defined in the next sentence, the “Term”).  Following the initial Term, this Employment
Agreement will automatically be renewed for successive one-year terms


 

















 


unless notice of termination is given by either party upon not less
than sixty (60) days’ written notice prior to the date on which such renewal
would otherwise occur.  In the event that
the Executive’s employment is not renewed by the Company in accordance with
this Section 2 upon the expiration of the Term or any Renewal Term, the
Executive’s employment shall terminate as of the date of such expiration, and
such termination shall be deemed a termination without “Cause” for purposes of
this Employment Agreement.


 


3.             Compensation
and Benefits.


 


(a)           Base
Salary.  The Executive’s base salary
as of May 31, 2007 is a rate of $313,800, payable in equal bi-weekly
installments.  The Board will review the
Executive’s base salary annually and make such increases as it deems
appropriate.  Any decrease may only be
made in connection with an across-the-board reduction (of approximately the same
percentage but no more than five percent (5%) of the then-base salary) in
executive compensation to executive employees imposed by the Board in response
to materially negative financial results or other materially adverse
circumstances affecting the Company. 
Necessary withholding taxes, FICA contributions and the like will be
deducted from the Executive’s base salary.


 


(b)           Bonus.  In addition to the Executive’s base salary,
the Executive will be entitled to receive a target bonus of 75% of base salary under
the Company’s Executive Bonus Plan based on the Company’s achievement of the
annual EBITDA target established by the Board (or any compensation committee
thereof) for each calendar year (each an “EBITDA Target”), paid in the calendar year following the
calendar year in which it is earned, on the same basis as other executives of
the Company, as such plan has been described to the Executive and may be
amended from time to time by the Board (or any compensation committee thereof).  The EBITDA Target for any calendar year will
be subject to adjustment by the Board (or any compensation committee thereof),
in good faith, to reflect any acquisitions, dispositions and material changes
to capital spending made after the date hereof.


 


(c)           Options.  As soon as practicable following May 31,
2007, the Executive shall be granted options to purchase Parent’s common stock,
$.01 par value per share, under Parent’s stock option plan that has been
approved by the Board.


 


(d)           Other.  The Executive will be entitled to such
health, life, disability, pension, sick leave and other benefits as are
generally made available by the Company to its executive employees.  The Executive will also accrue five weeks
paid vacation during each year during the Term, in accordance with and subject
to the Company’s vacation policy.


 


4.             Termination.


 


(a)           Death.  This Employment Agreement will automatically
terminate upon the Executive’s death.  In
the event of such termination, the Company will pay to the Executive’s legal
representatives the sum of (i) 100% of the Executive’s annual base salary
(as in effect on the Date of Termination (as defined below), (ii) $11,350,
and (iii) any earned but unpaid bonus for a calendar year ending prior to
the Date of Termination.  Such amount
shall be paid to Executive’s estate in a single lump sum payment on the 61st day following the Date of Termination.  Additionally, upon any termination hereunder,
the Executive’s estate shall be


 


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entitled to receive any accrued but unpaid salary and unused vacation
pay through the Date of Termination in accordance with Section 3(a) of
this Agreement and the terms of the Company’s vacation plan or policy then in
effect, and any accrued vested benefits through any benefit plan, program or
arrangement of the Company at the times specified therein (collectively, the “Accrued
Obligations”).


 


(b)           Disability.  If during the Term the Executive becomes
physically or mentally disabled whether totally or partially, either permanently
or so that the Executive has been unable substantially and competently to
perform his duties hereunder for one hundred eighty (180) days during any
twelve-month period during the Term (a “Disability”), the Company may terminate the Executive’s
employment hereunder by written notice to the Executive.  In the event of such termination, the Company
will pay to the Executive or his legal representative the sum of (i) 100%
of the Executive’s annual base salary (as in effect on the Date of
Termination), (ii) $11,350 and (iii) any earned but unpaid bonus for
a calendar year ending prior to the Date of Termination.  Such amounts under clauses (i), (ii) and
(iii) above shall, subject to Section 16 hereof, be paid to the
Executive or his legal representative in a single lump sum payment on the 61st day following the Date of Termination.  Additionally, the Executive or his legal
representative shall be entitled to receive the Accrued Obligations at the time
specified therefor in Section 4(a).


 


(c)           Cause.  The Executive’s employment hereunder may be
terminated at any time by the Company for Cause (as defined herein) by written
notice to the Executive.  In the event of
such termination, all of the Executive’s rights to any payments (other than the
Accrued Obligations which shall be paid at the time specified therfor in Section 4(a))
will cease immediately.  The Company will
have “Cause” for
termination of the Executive’s employment hereunder if any of the following has
occurred:


 


(i)            the commission by
the Executive of a felony for which he is convicted; or


 


(ii)           the material breach
by the Executive of his agreements or obligations under this Employment
Agreement, if such breach is described in a written notice to the Executive
referring to this Section 4(c)(ii), and such breach is not capable of being
cured or has not been cured within thirty (30) days after receipt of such
notice.


 


(d)           Without
Cause.  The Executive’s employment
hereunder may be terminated at any time by the Company without Cause by written
notice to the Executive.  In the event of
such termination, the Company shall pay, subject to Section 4(j), to the
Executive the sum of (i) 175% of the Executive’s annual base salary (as in
effect on the Date of Termination), (ii) $11,350 and (iii) any earned but
unpaid bonus for a calendar year ending prior to the Date of Termination.  Such amounts under clauses (i), (ii) and
(iii) above shall be paid to the Executive or his legal representative in a
single lump sum payment on the 61st day following the Date of Termination.  Additionally, the Company will pay to the
Executive a pro rata bonus for the calendar year in which such termination
occurs (based on the number of days elapsed in such calendar year prior to the
Date of Termination), at the time during the next calendar year that the
Company pays bonuses to other senior executives for the calendar year in
question, to the extent such bonus


 


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would be payable based on the actual results of the Company, as
calculated in accordance with Section 3(b) above (the “Pro-Rata
Bonus”).  Additionally, the Executive
shall be entitled to receive the Accrued Obligations at the time specified
therefor in Section 4(a).


 


(e)           Resignation
Without Good Reason.  The Executive
may terminate the Executive’s employment hereunder upon sixty (60) days’ prior
written notice to the Company, without Good Reason (as defined herein).  In the event of such termination, all of the
Executive’s rights to any payments (other than the Accrued Obligations which
shall be paid at the time specified therefore in Section 4(a)) will cease
upon the Date of Termination.


 


(f)            Resignation
For Good Reason.  The Executive may
terminate the Executive’s employment hereunder at any time upon thirty (30)
days’ written notice to the Company, for Good Reason.  In the event of such termination, the Company
shall pay, subject to Section 4(j), to the Executive the sum of (i) 175%
of the Executive’s annual base salary (as in effect on the Date of
Termination), (ii) $11,350 and (iii) any earned but unpaid bonus for
a calendar year ending prior to the date of such termination.  Such amounts under clauses (i), (ii) and
(iii) above shall, subject to Section 16 hereof, be paid to the
Executive or his legal representative in a single lump sum payment on the 61st day following the Date of Termination.  The Executive shall be entitled to receive
the Accrued Obligations and the Pro Rata Bonus, if any, at time specified
therefor in Sections 4(a) and 4(d), respectively.


 


The Executive will have “Good Reason” for
termination of the Executive’s employment hereunder if, other than for Cause,
any of the following has occurred:


 


(i)            the Executive’s
base salary or the percentage of base salary to which the Executive may be
entitled as the result of the Company reaching the annual EBITDA targets as
provided in Section 3(b) of this Employment Agreement has been
reduced, other than in connection with an across-the-board reduction (of
approximately the same percentage but no more than five (5%) of the then base
salary) in executive compensation to executive employees imposed by the Board
in response to materially negative financial results or other materially
adverse circumstances affecting the Company;


 


(ii)           the Board (or any
compensation committee thereof) establishes an unachievable and commercially
unreasonable annual EBITDA target that the Company must achieve in order for
the Executive to receive a bonus under Section 3(b) of this
Employment Agreement and the Executive provides written notice of his objection
to the Board (or such compensation committee) within ten (10) business
days after such target has been established and communicated in writing to the
Executive stating that the Executive believes such target to be unachievable
and commercially unreasonable;


 


(iii)          the Company has
required the Executive to relocate outside the greater Minneapolis, Minnesota
area or has relocated the corporate headquarters of the Company outside the
greater Minneapolis, Minnesota area or has removed or relocated outside the
greater Minneapolis area, a material number of employees


 


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or senior
management of the Company in each case, without the Executive’s written
consent;


 


(iv)          any diminution in
title, or any material diminution in responsibilities, duties or authorities,
without the Executive’s written consent; or


 


(v)           the Company has
breached this Employment Agreement in any material respect if such breach is
described in a written notice to the Company referring to this Section 4(c)(ii),
and such breach is not capable of being cured or has not been cured within
thirty (30) days after receipt of such notice.


 


(g)           Change
of Control.  If the Executive is
terminated without Cause or resigns for Good Reason at any time within six (6) months
prior to, or twenty- four (24) months following, a Change of Control, then,
notwithstanding Sections 4(d) and 4(f) and in lieu of amounts
provided under Sections 4(d) and 4(f), the Company shall pay the Executive
the sum of (i) 262.5% of the Executive’s annual base salary (as in effect
on the Date of Termination), (ii) $11,350, and (iii) any earned but
unpaid bonus for a calendar year ending prior to the Date of Termination.  Such amounts under clauses (i), (ii) and
(iii) above shall, subject to Section 16 hereof, be paid to the
Executive or his legal representative in a single lump sum payment on the 61st day following the Date of Termination except
that in the event the Executive’s employment terminates within six (6) months
prior to a Change in Control due to termination by the Company without Cause or
due to termination by the Executive for Good Reason, then on the Date of
Termination, the Executive shall be entitled to receive payment in accordance
with the terms of Section 4(d), and within thirty (30) days following a
Change in Control, the Executive shall receive a single lump sum payment in an
amount equal to the difference between the amount paid in accordance with Section 4(d) and
the amount to be paid in accordance with this Section 4(g).  Additionally, the Executive shall be entitled
to receive the Accrued Obligations and the Pro-Rata Bonus, if any, at the time
specified therefor in Sections 4(a) and 4(d), respectively.


 


For purposes of this Section 4(g), “Change of
Control” shall mean (i) when any “person” (as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934), other than the Company, Bear
Stearns Merchant Manager III (Cayman), L.P. (on November 1, 2008, Bear Stearns
Merchant Banking, which was affiliated with Bear, Stearns & Co. Inc.,
spun out into an independent firm and changed its name to “Irving Place Capital”),
or its affiliates, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary, or any corporation
owned, directly or indirectly, by the stockholders of the Company, in
substantially the same proportions as their ownership of stock of the Company,
acquires, in a single transaction or a series of transactions (whether by a
merger, consolidation, reorganization or otherwise), (A) “beneficial
ownership” (as defined in Rule 13d-3 under the Securities Exchange Act of
1934) of securities representing more than 50% of the combined voting power of
the Company (or, prior to a public offering, more than 50% of the Company’s
outstanding shares of Common Stock), or (B) substantially all or
all of the assets of the Company and its Subsidiaries on a consolidated basis
or (ii) a merger, consolidation, reorganization or similar transaction of
the Company with a “person” (as defined above) if, following such transaction,
the holders of a majority of the Company’s outstanding voting securities in the
aggregate immediately prior to such transaction do not own at least a majority
of the outstanding voting securities in the aggregate of the surviving
corporation immediately after such transaction.


 


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For purposes of this Section 4(g),
“Subsidiary” shall mean any corporation in an unbroken chain of
corporations beginning with the Company if, at the time of a Change of Control,
each of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.  In the event of any merger, consolidation,
reorganization or similar transaction with, into or involving another
corporation or other entity, such entity shall be a “person” for purposes of
this Section 4(g).


 


(h)           Date
and Effect of Termination.  The date
of termination of the Executive’s employment hereunder pursuant to this Section 4
will be, (i) in the case of Section 4(a), the date of the Executive’s
death, (ii) in the case of Sections 4(b), (c) or (d), the date
specified as the Executive’s last day of employment in the Company’s notice to
the Executive of such termination, (iii) in the case of Section 4(e) or
4(f), the date specified in the Executive’s notice to the Company of such
termination, or (iv) in the case of Section 4(g), the date specified
in the Executive’s notice to the Company for resignation for Good Reason or the
Company’s notice to the Executive for termination without Cause (in each case,
the “Date of Termination”).  Upon any termination of the Executive’s
employment hereunder pursuant to this Section 4, the Executive will not be
entitled to, and hereby irrevocably waives, any further payments or benefits of
any nature pursuant to this Employment Agreement, or as a result of such
termination, except as specifically provided for in this Employment Agreement,
the Stockholders Agreement between Parent and certain of the equityholders of
Parent (the “Stockholders Agreement”) or in any stock option plans adopted by Parent.  Notwithstanding the foregoing, upon any
termination of the Executive’s employment hereunder, the Executive shall
continue to be entitled to (i) the rights to indemnification pursuant to
the Company’s charter or by laws or any written agreement between the Executive
and the Company and (ii) rights with respect to any directors and officers
insurance policy of the Company.


 


(i)            Terminations
Not a Breach.  The termination of the
Executive’s employment pursuant to this Section 4 shall not constitute a
breach of this Employment Agreement by the party responsible for the
termination, and the rights and responsibilities of the parties under this
Employment Agreement as a result of such termination shall be as described in
this Section 4.


 


(j)            Release.  The Executive agrees that the Executive shall
be entitled to the payments and services provided for in this Section 4
(other than the Accrued Obligations), if any, if and only if the Executive has
executed and delivered the Release attached as Annex A within
forty-five (45) days of the Date of Termination and fifteen (15) days have
elapsed since such execution without any revocation thereof by the Executive.


 


(k)           Withholding.  All amounts payable to the Executive as
compensation hereunder shall be subject to all customary withholding, payroll
and other taxes.  The Company shall be
entitled to deduct or withhold from any amounts payable to the Executive any
federal, state, local or foreign withholding taxes, excise tax, or employment
taxes imposed with respect to the Executive’s compensation or other payments or
the Executive’s ownership interest in the Company (including, without
limitation, wages, bonuses, dividends, the receipt or exercise of equity
options and/or the receipt or vesting of restricted equity).


 


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5.             Acknowledgment.  The Executive agrees and acknowledges that in
the course of rendering services to the Company and its clients and customers,
the Executive will have access to and become acquainted with confidential
information about the professional, business and financial affairs of the
Company and its affiliates.  The
Executive acknowledges that the Company is engaged and will be engaged in a
highly competitive business, and the success of the Company in the marketplace
depends upon its good will and reputation for quality and dependability.  The Executive recognizes that in order to
guard the legitimate interests of the Company and its affiliates, it is
necessary for the Company to protect all confidential information.  The existence of any claim or cause of action
by the Executive against the Company shall not constitute and shall not be
asserted as a defense to the enforcement by the Company of Section 6.  The Executive further agrees that the
Executive’s obligations under Section 6 shall be absolute and
unconditional.


 


6.             Confidentiality.  The Executive agrees that during and at all
times after the Term, the Executive will keep secret all confidential matters
and materials of the Company (including its subsidiaries and affiliates),
including, without limitation, know- how, trade secrets, real estate plans and
practices, individual office results, customer lists, pricing policies,
operational methods, any information relating to the Company (including any of
its subsidiaries and affiliates) products, processes, customers and services
and other business and financial affairs of the Company (collectively, the “Confidential
Information”), to which the Executive had or may have access and will not
disclose such Confidential Information to any person other than (i) the
Company, its respective authorized employees and such other persons to whom the
Executive has been instructed to make disclosure by the Board, (ii) as
appropriate (as determined by the Executive in good faith) to perform his
duties hereunder, or (iii) in compliance with legal process or regulatory
requirements.  “Confidential Information”
will not include any information which is in the public domain during or after
the Term, provided such information is not in the public domain as a consequence
of disclosure by the Executive in violation of this Employment Agreement.


 


7.             Non-Compete,
Non-Solicitation.


 


(a)           In
further consideration of the compensation to be paid to the Executive
hereunder, the Executive acknowledges that, during the course of his employment
with the Company and its subsidiaries, he shall become familiar with the
Company’s trade secrets and with other Confidential Information concerning the
Company and its subsidiaries (and their respective predecessor companies) and
that his services have been and shall be of special, unique and extraordinary
value to the Company and its subsidiaries, and therefor, the Executive agrees
that during the Term and thereafter until the end of the first anniversary of
the Date of Termination, he shall not directly or indirectly own any interest
in, manage, control, participate in, consult with, render services for, or in
any manner engage in any Competing Business (as defined below) in the United
States; provided, that the foregoing shall not prohibit the
Executive from owning stock as a passive investor in any publicly traded
corporation so long as the Executive’s ownership in such corporation, directly
or indirectly, is less than 2% of the voting stock of such corporation.  For purposes of this paragraph, “Competing
Business” means any business activity involving the outsourcing or rental
of movable medical equipment and related services to the health care industry.


 


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(b)           During
the Term and thereafter until the end of the second anniversary of the Date of
Termination, the Executive shall not directly or indirectly through another
person or entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was
an employee of the Company or any Subsidiary at any time within the one year
period before Employee’s termination from employment or (iii) induce or
attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any Subsidiary to cease doing
business with the Company or such Subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any Subsidiary, except with the prior written consent of the
Board, which consent will be given at the sole discretion of the Board.


 


8.             Intellectual
Property, Inventions and Patents. 
The Executive acknowledges that all discoveries, concepts, ideas,
inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports, patent applications, copyrightable work and mask
work (whether or not including any confidential information) and all
registrations or applications related thereto, all other proprietary
information and all similar or related information (whether or not patentable)
which relate to the Company’s or any of its Subsidiaries’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by the Executive (whether above or
jointly with others) while employed by the Company or its predecessors and its
Subsidiaries (“Work Product”), belong to the Company or such
Subsidiary.  The Executive shall promptly
disclose such Work Product to the Board and, at the Company’s expense, perform
all actions reasonably requested by the Board (whether during or after the
Term) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).


 


9.             Modification.  The Executive agrees and acknowledges that
the duration and scope of the covenants described in Sections 6, 7 and 8 are
fair, reasonable and necessary in order to protect the goodwill and other
legitimate interests of the Company and its subsidiaries, that adequate
consideration has been received by the Executive for such obligations, and that
these obligations do not prevent the Executive from earning a livelihood.  If, however, for any reason any court of
competent jurisdiction determines that any restriction contained in Section 6,
7 or 8 are not reasonable, that consideration is inadequate or that the
Executive has been prevented unlawfully from earning a livelihood, such
restriction will be interpreted, modified or rewritten to include as much of
the duration, scope and geographic area identified in Section 6, 7 or 8 as
will render such restrictions valid and enforceable.


 


10.           Equitable
Relief.  The Executive acknowledges
that the Company will suffer irreparable harm as a result of a breach of this
Employment Agreement by the Executive for which an adequate monetary remedy
does not exist and a remedy at law may prove to be inadequate.  Accordingly, in the event of any actual or
threatened breach by the Executive of any provision of this Employment
Agreement, the Company will, in addition to any other remedies permitted by
law, be entitled to obtain remedies in equity, including without limitation
specific performance, injunctive relief, a temporary restraining order and/or a
permanent injunction in any court of competent jurisdiction, to prevent or
otherwise restrain any such breach without the 


 


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necessity of proving damages, posting a bond or other
security.  Such relief will be in
addition to and not in substitution of any other remedies available to the
Company.  The existence of any claim or
cause of action by the Executive against the Company or any of its
subsidiaries, whether predicated on this Employment Agreement or otherwise,
will not constitute a defense to the enforcement by the Company of this Employment
Agreement.  The Executive agrees not to
defend on the basis that there is an adequate remedy at law.


 


11.           Representations.  The Executive hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Employment Agreement by the Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which the Executive is a party or by which he is
bound, (ii) the Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this
Employment Agreement by the Company, this Employment Agreement shall be the valid
and binding obligation of the Executive, enforceable in accordance with its
terms.  THE EXECUTIVE HEREBY ACKNOWLEDGES
AND REPRESENTS THAT HE HAS CONSULTED WITH INDEPENDENT LEGAL COUNSEL REGARDING
HIS RIGHTS AND OBLIGATIONS UNDER THIS EMPLOYMENT AGREEMENT AND THE TERMS OF THE
RELEASE ATTACHED AS ANNEX A AND THAT HE FULLY UNDERSTANDS THE TERMS AND
CONDITIONS CONTAINED HEREIN AND THEREIN.


 


12.           Survival.  This Employment Agreement survives and
continues in full force in accordance with its terms notwithstanding the
expiration or termination of the Term.


 


13.           Cooperation.  During the Term and thereafter, the Executive
shall reasonably cooperate with the Company and its Subsidiaries in any
internal investigation or administrative, regulatory or judicial proceeding as
reasonably requested by the Company (including, without limitation, being
available to the Company upon reasonable notice for interviews and factual
investigations, appearing at the Company’s request to give testimony without
requiring service of a subpoena or other legal process, making available to the
Company all pertinent information requested by the Company and all relevant
documents requested by the Company which are or may come into the Executive’s
possession, all at times and on schedules that are reasonably consistent with
the Executive’s other activities and commitments, with due regard for such
activities and commitments).  In the
event the Company requires the Executive’s cooperation in accordance with this
section after the termination of the Term, the Company shall reimburse the
Executive for all of his reasonable costs and expenses incurred, in connection
therewith, including legal fees, plus pay the Executive a reasonable amount per
day for his time spent and such payments shall be made by Company on a monthly
basis, but in no event later than March 15th of
the calendar year following the calendar year to which such amounts
relate.  The Company shall indemnify the
Executive and hold him harmless from any claim, loss or damage as a result of
his cooperation hereunder.


 


14.           Life
Insurance.  The Company may, at its
discretion and at any time after the execution of this Employment Agreement,
apply for and procure, as owner and for its own benefit, and at its own
expense, insurance on the Executive’s life, in such amount and in such form or
forms as the Company may determine.  The
Executive will have no right or interest 


 


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whatsoever in such policy or policies, but the
Executive agrees that the Executive will, at the request of the Company, submit
himself to such medical examinations, supply such information and execute and
deliver such documents as may be required by the insurance company or companies
to which the Company or any such subsidiary has applied for such insurance.


 


15.           No Mitigation.  The
Executive shall be under no obligation to seek other employment or otherwise
mitigate the obligations of the Company under this Agreement upon termination
of this Agreement, and any payments or benefits paid by the Company hereunder
shall not be offset by any
remuneration or benefits received from a subsequent employer.


 


16.           Section 409A.


 


(a)           Compliance.  It is the intention of the parties to this
Employment Agreement that no payment or entitlement pursuant to this Employment
Agreement will give rise to any adverse tax consequences to the Executive under
Section 409A of the Code.  The
Employment Agreement shall be interpreted to that end and, consistent with that
objective and notwithstanding any provision herein to the contrary, the Company
and the Executive shall, to the extent necessary to comply with Section 409A
of the Code, agree to act reasonably and in good faith to mutually reform the
provisions of this Employment Agreement to avoid the application of or excise
tax under Section 409A of the Code. 
To this end, the parties agree that the severance benefits payable under
this Employment Agreement will be paid only upon a “separation from service”
(within the meaning of Section 409A of the Code) that occurs coincident
with or following the Date of Termination. 
Notwithstanding any other provision herein, if the Executive is a
“specified employee”, as defined in, and pursuant to, Prop. Reg. Section 1.409A
1(i) or any successor regulation, on the Date of Termination, any payment
provided hereunder that is designated as being “subject to Section 16”
shall be made to the Executive no earlier than the date which is six months
from the Date of Termination; provided, that such payment may be made
earlier in the event of the Executive’s death. 
If any payment to the Executive is delayed pursuant to clause (i) of
the foregoing sentence, such payment instead shall be made on the first
business day following the expiration of the six month period referred to in
the prior sentence or the date of the Executive’s death, as applicable.


 


(b)           Payment
Period.  Whenever a payment under
this Agreement specifies a payment period with reference to a number of days
(e.g., “payment shall be made within ninety (90) days following the Date of
Termination), the actual date of payment within the specified period shall be
within the sole discretion of the Company.


 


(c)           Reimbursement.  With regard to any provision herein that
provides for reimbursement of costs and expenses or in-kind benefits, except as
permitted by Section 409A of the Code, (i) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another
benefit, (ii) the amount of expenses eligible for reimbursement, of
in-kind benefits, provided during any taxable year shall not affect the
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year, provided that the foregoing clause (ii) shall not be
violated without regard to expenses reimbursed under any arrangement covered by
Section 105(b) of the Code solely because such expenses are subject
to a limit related to the period the arrangement is in effect and (iii) such
payments shall be made on 


 


10

















 


or before the last day of the Executive’s taxable year
following the taxable year in which the expense occurred.


 


(d)           Installments.  If under this Agreement, an amount is to be
paid in two or more installments, for purposes of Section 409A of the Code,
each installment shall be treated as a separate payment.


 


17.           Attorney
Fees.  The Company shall pay the
Executive’s reasonable legal fees and out-of-pocket expenses of one counsel
incurred in connection with the negotiation and drafting of this Employment
Agreement and any equity award agreements, and other reasonable legal fees and
out-of-pocket expenses of one counsel related to the sale of the Company
consummated on or about May 31, 2007, subject, in each case, to and within
ten (10) days after his written request for such payment accompanied by
reasonably satisfactory evidence that such fees and expenses were actually
incurred in connection therewith.  If a
court of competent jurisdiction determines that this Employment Agreement was
breached by the Company, the Executive shall be entitled to recover any and all
out-of-pocket costs and expenses, including reasonable legal fees, incurred in
enforcing this Employment Agreement against the Company, subject to and within
ten (10) days after his request for reimbursement accompanied by
reasonably satisfactory evidence that the costs and expenses were incurred in
connection therewith.  The Executive
shall submit a written request for payment or reimbursement within sixty (60)
days of incurring the expense.


 


18.           Indemnification.  The Company shall indemnify the Executive
(including, for the avoidance of doubt, advancement of legal expenses) to the
fullest extent permitted by applicable law in the event he was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, or in the event a claim or demand for information
is made or threatened to be made against him, in each case by reason of the
fact that he is or was a director, officer, employee, fiduciary or agent of the
Company or, at the request of the Company, any other entity or benefit plan
(except with respect to the Executive’s fraud, gross negligence, or willful
misconduct).  Such obligation shall
continue after any termination of employment or directorship with regard to
actions or inactions prior thereto, and shall survive the termination of this
Agreement.  The Executive shall be
covered by the Company’s directors and officers insurance policy upon terms and
conditions no less favorable than the terms provided by the Company to any
member of the Board or other senior executive of the Company.


 


19.           Successors;
Assigns; Amendment; Notice.  This
Employment Agreement will be binding upon and will inure to the benefit of the
Company and will not be assigned by the Company without the Executive’s prior
written consent.  This Employment
Agreement will be binding upon the Executive and will inure to the benefit of
the Executive’s heirs, executors, administrators and legal representatives, but
will not be assignable by the Executive. 
This Employment Agreement may be amended or altered only by the written
agreement of the Company and the Executive. 
All notices or other communications permitted or required under this
Employment Agreement will be in writing and will be deemed to have been duly
given if delivered by hand, by facsimile transmission to the Company (if
confirmed) or mailed (certified or registered mail, postage prepaid, return
receipt requested) to the Executive or the Company at the last known address of
the party, or such other address as will be furnished in writing by like notice
by the Executive or the Company to the other; provided, that any notice to the
Company 


 


11

















 


hereunder shall also be delivered to UHS Holdco, Inc.,
c/o Irving Place Capital, 277 Park Avenue, 39th Floor, New York, NY 10172,
Attention: Robert Juneja.


 


20.           Entire
Agreement.  This Employment Agreement
embodies the entire agreement and understanding between the Executive and the
Company with respect to the subject matter hereof and supersedes all such prior
agreements and understandings (including the Employment Agreement, dated June 2004,
by and between the Company and the Executive), except as otherwise specifically
provided herein.


 


21.           Severability.  If any term, provision, covenant or
restriction of this Employment Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Employment Agreement will remain
in full force and effect and will in no way be affected, impaired or
invalidated.


 


22.           Governing
Law; Jurisdiction.  This Employment
Agreement will be governed by and construed and enforced in accordance with the
laws of the state of Minnesota applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws
thereof.  Each of the parties agrees that
any legal action or proceeding with respect to this Employment Agreement shall
be brought in the federal or state courts in the State of Minnesota (provided
that any action that can be brought in either the federal or state courts shall
be brought in the federal courts) and, by execution and delivery of this
Employment Agreement, each party hereto hereby irrevocably submits itself in
respect of its property, generally and unconditionally, to the exclusive
jurisdiction of the aforesaid court in any legal action or proceeding arising
out of this Employment Agreement.  Each
of the parties hereto hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Employment Agreement
brought in the court referred to in the preceding sentence.


 


23.           Counterparts.  This Employment Agreement may be executed in
two or more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument, and all signatures
need not appear on any one counterpart.


 


24.           Headings.  All headings in this Employment Agreement are
for purposes of reference only and will not be construed to limit or affect the
substance of this Employment Agreement.


 


*   *  
*   *   *


 


12

















 


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


 


 


	
   

  	
  UNIVERSAL HOSPITAL
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Rex Clevenger

  



 


 


	
   

  	
  Reviewed
  by

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
  Legal
  Department

  
	
   

  	
  on
  behalf of

  
	
   

  	
  UHS

  



 

















 


Annex A


 


RELEASE


 


	
   

  	
  I, Rex Clevenger, in consideration of and subject to
  the performance by Universal Hospital Services, Inc., a Delaware

  
	
  corporation (together with its subsidiaries, the “Company”),
  of its material obligations under the Employment Agreement, dated as of
  December 31, 2008 (the “Agreement”), do hereby release and
  forever discharge as of the date hereof the Company and all present and
  former directors, officers, agents, representatives, executives, successors
  and assigns of the Company and its direct or indirect owners (collectively,
  the “Released Parties”) to the extent provided below.

  
	
   

  	
   

  
	
  1.

  	
  Except as provided in paragraph 2 below, I knowingly
  and voluntarily release and forever discharge the Released Parties from any
  and all claims, controversies, actions, causes of action, cross-claims,
  counter-claims, demands, debts, compensatory damages, liquidated damages,
  punitive or exemplary damages, other damages, claims for costs and attorneys’
  fees, or liabilities of any nature whatsoever in law and in equity, both past
  and present (through the date hereof) and whether known or unknown,
  suspected, or claimed against any of the Released Parties which I, or any of
  my heirs, executors, administrators or assigns, may have, which arise out of
  or are connected with my employment with, or my separation from, the Company
  (including, but not limited to, any allegation, claim or violation, arising
  under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
  Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
  amended (including the Older Workers Benefit Protection Act); the Equal Pay
  Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family
  and Medical Leave Act of 1993; the Civil Rights Act of 1866, as amended; the
  Worker Adjustment Retraining and Notification Act; the Employee Retirement
  Income Security Act of 1974; any applicable Executive Order Programs; the
  Fair Labor Standards Act; or their state or local counterparts; or under any
  other federal, state or local civil or human rights law, or under any other
  local, state, or federal law, regulation or ordinance; or under any public
  policy, contract or tort, or under common law; or arising under any policies,
  practices or procedures of the Company; or any claim for wrongful discharge,
  breach of contract, infliction of emotional distress, defamation; or any
  claim for costs, fees, or other expenses, including attorneys’ fees incurred
  in these matters), (all of the foregoing collectively referred to herein as
  the “Claims”).

  
	
   

  	
   

  
	
  2.

  	
  I agree that this Release does not waive or release
  any rights or claims that I may have under: the Age Discrimination in
  Employment Act of 1967 which arise after the date I execute this Release;
  claims for benefits under any employee benefit plan maintained by the
  Company; rights and entitlements under the Company’s equity plans and related
  award agreements; claims for indemnification and coverage under any directors
  and officers insurance policy; or claims or claims for unemployment or
  worker’s compensation as provided by law.

  



 


A-1

















 


	
  3.

  	
  I acknowledge and intend that this Release shall be
  effective as a bar and shall serve as a complete defense to each and every
  one of the Claims and that it shall be given full force and effect according
  to each and all of its express terms and provisions, including those relating
  to unknown and unsuspected Claims (notwithstanding any state statute that
  expressly limits the effectiveness of a release of unknown, unsuspected and
  unanticipated Claims), if any, as well as those relating to any other Claims
  hereinabove mentioned or implied.

  
	
   

  	
   

  
	
  4.

  	
  I represent that I have not made any assignment or
  transfer of any Claim. I agree that neither this Release, nor the furnishing
  of the consideration for this Release, shall be deemed or construed at any
  time to be an admission by the Company or any Released Party of any improper
  or unlawful conduct. I agree that this Release is confidential and agree not
  to disclose any information regarding the terms of this Release, except to my
  immediate family and any tax, legal or other counsel I have consulted
  regarding the meaning or effect hereof or as required by law, and I will
  instruct each of the foregoing not to disclose the same to anyone.

  
	
   

  	
   

  
	
  5.

  	
  Each provision of this Release shall be interpreted
  in such manner as to be effective and valid under applicable law and any
  provision of this Release held to be invalid, illegal or unenforceable in any
  respect shall be severable. This Release cannot be amended except in a
  writing duly executed by the Company and me.

  



 


*    
*     *    *    
*


 


A-2

















 


I UNDERSTAND THAT
I HAVE FIFTEEN (15) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED.


 


 


	
  DATE:

  	
   

  	
   

  	
  UNIVERSAL
  HOSPITAL SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rex Clevenger