Exhibit 10.2

 

 

 

SECURITIES PURCHASE AGREEMENT

 

DATED AS OF SEPTEMBER 7, 2005

 

BETWEEN

 

MQ ASSOCIATES, INC.

 

AND

 

MQ INVESTMENT HOLDINGS II, LLC

 

 

 

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ARTICLE I

DEFINED TERMS; RULES OF CONSTRUCTION

 

 

 

 

1.1

Defined Terms

 

 

 

 

1.2

Rules of Construction

 

 

 

 

ARTICLE II

PURCHASE AND SALE OF SECURITIES

 

 

 

 

2.1

Authorization of Issuance of Purchased Securities

 

 

 

 

2.2

Sale of Purchased Securities at the Closing

 

 

 

 

2.3

Issuance of Purchased Securities

 

 

 

 

2.4

Purchase Price

 

 

 

 

2.5

Use of Proceeds

 

 

 

 

ARTICLE III

CLOSING

 

 

 

 

3.1

Closing

 

 

 

 

3.2

Closing Deliverables

 

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES ABOUT THE COMPANY

 

 

 

 

4.1

Organization, Etc

 

 

 

 

4.2

Capitalization

 

 

 

 

4.3

Authorization, Etc

 

 

 

 

4.4

Execution; Enforceability

 

 

 

 

4.5

No Conflict; Consents

 

 

 

 

4.6

No Additional Representations

 

 

 

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

 

 

 

5.1

Organization, Etc

 

 

 

 

5.2

Authorization of the Documents

 

 

 

 

5.3

No Conflict; Consents

 

 

 

 

5.4

Litigation

 

 

 

 

5.5

Investment Representations

 

 

 

 

5.6

AWARENESS OF PUBLIC FILINGS; NON-RELIANCE ON FINANCIAL STATEMENTS

 

 

 

 

ARTICLE VI

CONDITIONS TO CLOSING

 

 

 

 

6.1

Conditions to Purchaser’s Obligations

 

 

 

 

6.2

Conditions to the Company’s Obligations

 

 

 

 

ARTICLE VII

COVENANTS OF THE COMPANY AND THE PURCHASER

 

 

 

 

7.1

Repurchase of Purchased Securities

 

 

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7.2

Purchase Price; Dispute Procedures

 

 

 

 

ARTICLE VIII

MISCELLANEOUS

 

 

 

 

8.1

Further Assurances

 

 

 

 

8.2

Specific Performance; Remedies

 

 

 

 

8.3

Successors and Assigns

 

 

 

 

8.4

Entire Agreement

 

 

 

 

8.5

Notices

 

 

 

 

8.6

Amendments, Modifications and Waivers

 

 

 

 

8.7

Governing Law

 

 

 

 

8.8

Third Party Reliance

 

 

 

 

8.9

Submission to Jurisdiction

 

 

 

 

8.10

Information

 

 

 

 

8.11

Severability

 

 

 

 

8.12

Counterparts; Facsimile Signatures

 

 

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EXECUTION VERSION

 

SECURITIES PURCHASE AGREEMENT dated as of September 7, 2005, between MQ
ASSOCIATES, INC., a Delaware corporation (the “Company”) and MQ INVESTMENT
HOLDINGS II, LLC, a Delaware limited liability company (the “Purchaser”).

 

WHEREAS, the Company, indirectly through its wholly-owned subsidiary
MedQuest, Inc., a Delaware corporation (“MedQuest”), is in the business of
providing fixed-site outpatient single and multi-modality diagnostic imaging
services (the “Business”).

 

WHEREAS, the Company desires to issue and sell to the Purchaser, and the
Purchaser desires to purchase from the Company, (a) 20,000,000 shares of
Series A Preferred Stock (as defined herein) and (b) a warrant to purchase an
aggregate amount of 3,000,000 shares of Common Stock (as defined herein), in
each case, on the terms and subject to the conditions provided herein.

 

NOW THEREFORE, in consideration of the foregoing and the covenants, agreements,
representations and warranties contained in this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

ARTICLE I

DEFINED TERMS; RULES OF CONSTRUCTION

 

1.1                               Defined Terms.

 

As used in this Agreement, the following definitions apply:

 

“2002 Notes” means MedQuest’s 117/8% Senior Subordinated Notes due 2012 under
the 2002 Notes Indenture.

 

“2002 Notes Indenture” means the Indenture for the 117/8% Senior Subordinated
Notes due 2012 dated as of August 15, 2002, among MedQuest, the Company, the
Subsidiary Guarantors party thereto and Wachovia Bank, National Association, as
trustee, as amended, supplemented or modified from time to time.

 

“2004 Notes” means the Company’s 121/4% Senior Discount Notes due 2012 issued
under the 2004 Notes Indenture.

 

“2004 Notes Indenture” means the Indenture for the 121/4% Senior Discount Notes
due 2012 dated as of August 24, 2004, between the Company and Wachovia Bank,
National Association, as trustee, as amended, supplemented or modified from time
to time.

 

“Affiliate” of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified

 

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Person. For the purposes of this definition, “control” when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 

“Agreement” has the meaning given to such term in Section 1.2.

 

“Alternate FMV” means the fair market value per Warrant or share of Common Stock
issuable upon the exercise thereof, as determined in good faith by a qualified
appraiser of national stature selected by the Purchaser (the “Purchaser
Appraiser”).

 

“Bank Consent” means the Fourth Waiver and Third Amendment to Credit Agreement,
to be entered into among the Company, MedQuest, the lenders party thereto and
Wachovia Bank, National Association, as administrative agent.

 

“Board” means the Board of Directors of the Company or any committee thereof
duly authorized to act on behalf of the Board of Directors.

 

“Board FMV” has the meaning given to such term in Section 7.2(b).

 

“Business” has the meaning given to such term in the recitals to this Agreement.

 

“Business Day” means any day that is not (a) a Saturday, Sunday, or legal
holiday or (b) a day on which banks are not required to be open in New York, New
York.

 

“Certificate of Increase” means the Certificate of Increase with respect to
20,000,000 additional shares of Series A Redeemable Preferred Stock of the
Company, to be newly filed with the Secretary of State of the State of Delaware.

 

“Charter” means the Fourth Amended and Restated Certificate of Incorporation of
the Company, as amended, modified, supplemented or restated from time to time.

 

“Closing” has the meaning set forth in Section 3.1.

 

“Closing Date” means the date on which the Closing occurs.

 

“Commission” means the Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.

 

“Common Stock” means the Company’s common stock, par value $0.001 per share.

 

“Company” has the meaning given to such term in the caption to this Agreement.

 

“Consent Solicitation” means the Consent Solicitation Statement dated July 29,
2005 in respect of the 2002 Notes and the 2004 Notes.

 

“Credit Agreement” means the Amended and Restated Credit Agreement dated as of
September 3, 2003, among the Company, MedQuest, the lenders party thereto, Chase
Lincoln First Commercial Corporation, as Syndication Agent, Wachovia Bank,
National Association

 

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(“Wachovia”) and General Electric Capital Corporation, as Co-Documentation
Agents, and Wachovia, as Administrative Agent, as may be amended, modified,
supplemented, renewed, refunded, replaced, restated or refinanced (in whole or
in part) from time to time.

 

“Dispute Notice” has the meaning given to such term in Section 7.2(b).

 

“Documents” means this Agreement and any and all agreements and documents
executed and delivered in connection therewith.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect from time to time.

 

“Fair Market Value” means the fair market value of the Warrants or the Common
Stock issuable upon the exercise thereof, as finally determined pursuant to
Section 7.2.

 

“Fundamental Documents” means the documents by which any Person (other than an
individual) establishes its legal existence or which govern its internal
affairs. The Fundamental Documents of the Company as of the date hereof are the
Charter and the by-laws of the Company.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, restriction,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).

 

“Material Adverse Effect” has the meaning given to such term in Section 4.1.

 

“MedQuest” has the meaning given to such term in the caption.

 

“Neutral Appraiser” has the meaning given to such term in Section 7.2(b).

 

“Person” shall be construed as broadly as possible and shall include an
individual or natural person, a partnership (including a limited liability
partnership), a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental authority.

 

“Preferred Shares” means the shares of Series A Preferred Stock to be purchased
pursuant to this Agreement.

 

“Premium” has the meaning given to such term in Section 7.2(a).

 

“Purchased Securities” has the meaning given to such term in Section 2.1.

 

“Purchaser Appraiser” has the meaning given to such term in the definition of
“Alternate FMV”.

 

“Purchaser” has the meaning given to such term in the caption.

 

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“Registration Rights Agreement” means the Registration Rights Agreement dated as
of August 15, 2002 among the Company, the stockholders and other securityholders
of the Company party thereto, as amended, modified, supplemented or restated
from time to time.

 

“Repurchase Notice” has the meaning given to such term in Section 7.1.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor
Federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect from time to time.

 

“Series A Preferred Stock” means the Company’s Series A Redeemable Preferred
Stock, par value $0.001 per share.

 

“Series B Preferred Stock” means the Company’s Series B Redeemable Preferred
Stock, par value $0.001 per share.

 

“Stockholders’ Agreement” means the Stockholders’ Agreement dated as of
August 15, 2002, among the Company and the stockholders of the Company party
thereto, as amended, modified, supplemented or restated from time to time.

 

“Subsidiary” or “subsidiary” means, with respect to any Person, any other Person
of which more than fifty percent (50%) of the shares of stock or other interests
entitled to vote in the election of directors or comparable Persons performing
similar functions (excluding shares or other interests entitled to vote only
upon the failure to pay dividends thereon or other contingencies) are at the
time owned or controlled, directly or indirectly through one or more
Subsidiaries, by such Person.  Unless the context otherwise requires, the term
“Subsidiary” means a Subsidiary of the Company.

 

“Warrant” means the warrant to purchase Common Stock issued pursuant to this
Agreement.

 

1.2                               Rules of Construction.

 

The term this “Agreement” means this agreement together with all schedules and
exhibits hereto, as the same may from time to time be amended, modified,
supplemented or restated in accordance with the terms hereof.  The use in this
Agreement of the term “including” means “including, without limitation.”  The
words “herein,” “hereof,” “hereunder” and other words of similar import refer to
this Agreement as a whole, including the schedules and exhibits, as the same may
from time to time be amended, modified, supplemented, or restated, and not to
any particular section, subsection, paragraph, subparagraph or clause contained
in this Agreement. All references to sections, schedules, exhibits and annexes
mean the sections of this Agreement and the schedules, exhibits and annexes
attached to this Agreement, except where otherwise stated.  The title of and the
section and paragraph headings in this Agreement are for convenience of
reference only and shall not govern or affect the interpretation of any of the
terms or provisions of this Agreement.  The use herein of the masculine,
feminine or neuter forms shall also denote the other forms, as in each case the
context may require or permit.  Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the

 

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general statement to which it relates.  The language used in this Agreement has
been chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.  Unless expressly provided
otherwise, the measure of a period of one month or year for purposes of this
Agreement shall be that date of the following month or year corresponding to the
starting date, provided that if no corresponding date exists, the measure shall
be that date of the following month or year corresponding to the next day
following the starting date.  For example, one month following February 18 is
March 18, and one month following March 31 is May 1.

 

ARTICLE II

PURCHASE AND SALE OF SECURITIES

 

2.1                               Authorization of Issuance of Purchased
Securities.

 

Subject to the terms and conditions hereof, the Company has authorized the
issuance and sale to the Purchaser of (a) 20,000,000 shares of Series A
Preferred Stock and (b) a Warrant to purchase 3,000,000 shares of Common Stock
((a) and (b) collectively, the “Purchased Securities”).  Each Purchased Security
shall be comprised of an investment unit of one share of Series A Preferred
Stock and a Warrant for the purchase of 0.15 shares of Common Stock.

 

2.2                               Sale of Purchased Securities at the Closing.

 

At the Closing, subject to the satisfaction or waiver of the conditions set
forth in Article VI, the Company shall issue and sell to the Purchaser, and the
Purchaser shall purchase from the Company, the Purchased Securities.

 

2.3                               Issuance of Purchased Securities.

 

All Purchased Securities issued at the Closing shall be (i) validly issued,
fully paid and non-assessable and shall be issued free and clear of any Liens
whatsoever and with no restrictions (in each case other than pursuant to the
Documents) on the voting rights thereof (other than as set forth in the
Stockholders’ Agreement or the Registration Rights Agreement) or any other
incidents of record and beneficial ownership pertaining thereto and
(ii) entitled to the rights and subject to the obligations of each of the
Stockholders’ Agreement and the Registration Rights Agreement.

 

2.4                               Purchase Price.

 

(a)                                  As payment for the Purchased Securities,
the Purchaser shall pay to the Company a price per Purchased Security equal to
$1.00, for an aggregate amount equal to $20,000,000.

 

(b)                                 All consideration payable pursuant to
Section 2.4(a) shall be paid in cash by wire transfer of immediately available
funds to an account designated by the Company from time to time.

 

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2.5                               Use of Proceeds.

 

All of the proceeds from the sale of the Purchased Securities shall be used for
the general corporate purposes of the Company and its subsidiaries; provided,
that, notwithstanding the foregoing, the Company covenants and agrees to
contribute not less than eighteen million dollars ($18,000,000) of such proceeds
to MedQuest.

 

ARTICLE III

CLOSING

 

3.1                               Closing.

 

The closing (the “Closing”) of the sale and issuance of the Purchased Securities
pursuant to Section 2.2 shall, subject to the satisfaction or waiver of the
applicable conditions set forth in Article VI, take place on the date hereof at
the offices of O’Melveny & Myers LLP at 7 Times Square, New York, New York
10036, or such other place agreed to by the Company and the Purchaser.

 

3.2                               Closing Deliverables.

 

On the date of the Closing, (i) the Company shall deliver to the Purchaser one
or more stock certificates and warrant certificates, in each case registered in
the name of the Purchaser, representing the number of Purchased Securities
purchased by the Purchaser and (ii) the Purchaser shall deliver to the Company
the Purchase Price for the Purchased Securities.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES ABOUT THE COMPANY

 

The Company represents and warrants to the Purchaser as follows:

 

4.1                               Organization, Etc.

 

The Company has been duly incorporated and is validly existing under the laws of
its jurisdiction of incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the
ownership or lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged, except where the
failure to so qualify or have such power or authority would not, singularly or
in the aggregate, have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”).

 

4.2                               Capitalization.

 

The authorized capital stock of the Company immediately prior to the Closing is
385,000,000 shares, consisting of:

 

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(i)                                     195,000,000 duly authorized shares of
Common Stock, par value $0.001 per share, of which 28,605,000 shares are duly
and validly issued and outstanding;

 

(ii)                                  115,000,000 duly authorized shares of
Class A Common Stock, par value $0.001 per share, of which 72,100,000 shares are
duly and validly issued and outstanding; and

 

(iii)                               75,000,000 duly authorized shares of
preferred stock, par value $0.001 per share, (A) 55,000,000 of which are
designated Series A Redeemable Preferred Stock (including such as were
designated pursuant to the Certificate of Increase) and (B) 15,000,000 of which
are designated Series B Preferred Stock, and 35,000,000 Series A Redeemable
Preferred Stock and 15,000,000 Series B Preferred Stock of which are issued and
outstanding.

 

In connection with this Agreement, the Company will issue 20,000,000 additional
shares of Series A Preferred Stock.

 

4.3                               Authorization, Etc.

 

The Company has full corporate right, power and authority to execute and deliver
this Agreement and the other Documents to which it is a party and to perform its
obligations hereunder and thereunder; and all requisite action required to be
taken for the due and proper authorization, execution and delivery of each of
the Documents to which the Company is a party and the consummation of the
transactions contemplated thereby have been duly and validly taken.

 

4.4                               Execution; Enforceability.

 

This Agreement and each of the other Documents have been duly executed and
delivered by the Company and constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be subject to (a) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally and (b) general equitable principles
(whether considered in a proceeding in equity or at law).

 

4.5                               No Conflict; Consents.

 

Except as would not have a Material Adverse Effect, the execution, delivery and
performance by the Company of each of the Documents to which it is a party and
the consummation of the transactions contemplated by the Documents do not
(a) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any Lien upon any property or assets of the Company pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, (b) result in any violation of the provisions of the Fundamental
Documents of the Company or (c) result in any violation of any statute or any
judgment, order, decree, rule or regulation of any court or arbitrator or

 

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governmental agency or body having jurisdiction over the Company or any of its
properties or assets (assuming compliance by the Purchaser with its
representations, warranties and agreements set forth in Section 5.5 hereof), and
(d) (assuming compliance by the Purchaser with its representations, warranties
and agreements set forth in Section 5.5 hereof), no consent, approval,
authorization or order of, or filing or registration with, any such court or
arbitrator or governmental agency or body under any such statute, judgment,
order, decree, rule or regulation is required for the execution, delivery and
performance by the Company of each of the Documents to which it is a party and
the consummation of the transactions contemplated by the Documents, except for
such consents, approvals, authorizations, filings, registrations or
qualifications (i) that shall have been obtained or made on or prior to the date
of the Closing or (ii) as may be required under state or foreign securities and
blue sky laws and the rules and regulations of the National Association of
Securities Dealers, Inc.

 

4.6                               No Additional Representations.

 

NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES IS MAKING ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER WITH RESPECT TO THE
COMPANY AND ITS SUBSIDIARIES, INCLUDING ANY OF THE ASSETS, RIGHTS OR PROPERTIES
OF THE COMPANY OR ANY SUBSIDIARY, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY SET FORTH IN THIS ARTICLE IV, AND EXCEPT AS SET FORTH EXPRESSLY IN
THIS ARTICLE IV, THE CONDITION OF THE ASSETS, PROPERTIES AND RIGHTS OF THE
COMPANY AND EACH OF ITS SUBSIDIARIES SHALL BE “AS IS” AND “WHERE IS.”

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants as follows:

 

5.1                               Organization, Etc.

 

The Purchaser has been duly formed and is validly existing and is in good
standing under the laws of its jurisdiction of formation, is duly qualified to
do business and is in good standing in each jurisdiction in which its ownership
or lease of property or the conduct of its businesses requires such
qualification, and has all organizational power and authority necessary to own
or hold its properties and to conduct the businesses in which it is engaged,
except in each case where the failure to so qualify or have such power or
authority could not reasonably be expected to adversely affect the ability of
the Purchaser to perform its material obligations under this Agreement.

 

5.2                               Authorization of the Documents.

 

The Purchaser has all requisite limited liability company power and authority to
execute, deliver and perform the Documents to which it is a party and the
transactions contemplated thereby, and the execution, delivery and performance
by the Purchaser of the Documents to

 

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which it is a party have been duly authorized by all requisite action by the
Purchaser.  This Agreement has been duly executed and delivered by the Purchaser
and this Agreement constitutes and, when executed and delivered by the Purchaser
(assuming the due authorization, execution and delivery by the other parties
thereto) each other Document to which the Purchaser is a party, will constitute
a valid and binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws and subject to general principles of equity.

 

5.3                               No Conflict; Consents.

 

Except as would not have a Material Adverse Effect, the execution, delivery and
performance by the Purchaser of each of the Documents to which the Purchaser is
a party and the consummation of the transactions contemplated by such Documents
will not: (a) result in any violation of the provisions of the Fundamental
Documents of the Purchaser, as applicable; (b)(i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Lien upon any
property or assets of the Purchaser pursuant to, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Purchaser is a party or by which the Purchaser is bound
or to which any of the property or assets of the Purchaser is subject or
(ii) result in any violation of any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Purchaser; or (c) require the consent, approval,
authorization or order of, or filing or registration with, any such court or
arbitrator or governmental agency or body under any such statute, judgment,
order, decree, rule or regulation is required for the execution, delivery and
performance by the Purchaser of the Documents to which the Purchaser is a party
and the consummation of the transactions contemplated hereby, except for such
consents, approvals, authorizations, orders, filings, registrations or
qualifications (i) that shall have been obtained or made on or prior to the date
hereof, (ii) as may be required under state or foreign securities and blue sky
laws and the rules and regulations of the National Association of Securities
Dealers, Inc. or (iii) which the failure to obtain the same could not reasonably
be expected to adversely affect the ability of the Purchaser to perform its
material obligations under the Documents to which the Purchaser is a party.

 

5.4                               Litigation.

 

There are no legal or governmental proceedings pending to which the Purchaser is
a party or of which any of its property or assets is the subject that question
the validity or enforceability of this Agreement or any action taken or to be
taken by the Purchaser pursuant hereto; and to the knowledge of the Purchaser,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others.

 

5.5                               Investment Representations.

 

(a)                                  The Purchaser is acquiring the Purchased
Securities for its own account, for investment and not with a view to the
distribution thereof in violation of the Securities Act or applicable state
securities laws;

 

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(b)                                 The Purchaser (i) understands that (A) the
Purchased Securities have not been registered under the Securities Act or
applicable state securities laws by reason of their issuance by the Company in a
transaction exempt from the registration requirements of the Securities Act and
applicable state securities laws and (B) the Purchased Securities must be held
by the Purchaser indefinitely unless a subsequent disposition thereof is
registered under the Securities Act and applicable state securities laws or is
exempt from such registration and (ii) has had the opportunity to ask questions
of, and receive answers from, the Company and its management relating to the
business and financial condition of the Business, including as provided in
Section 5.6(II);

 

(c)                                  The Purchaser further understands that the
exemption from registration afforded by Rule 144 (the provisions of which are
known to the Purchaser) promulgated under the Securities Act depends on the
satisfaction of various conditions, and that, if applicable, Rule 144 may afford
the basis for sales of Purchased Securities in limited amounts;

 

(d)                                 The Purchaser has not employed any broker or
finder in connection with the transactions contemplated by this Agreement; and

 

(e)                                  The Purchaser is an “accredited investor”
(as defined in Rule 501(a) of Regulation D promulgated under the Securities
Act). The Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of this
investment. The Purchaser’s representations in this subsection shall in no way
limit the enforceability of any representations made by the Company in any of
the Documents to which it is a party.

 

5.6                               AWARENESS OF PUBLIC FILINGS; NON-RELIANCE ON
FINANCIAL STATEMENTS.

 

THE PURCHASER ACKNOWLEDGES AND AGREES THAT IT HAS READ AND IS FAMILIAR WITH THE
COMPANY’S DISCLOSURE IN CURRENT REPORTS ON FORM 8-K FILED WITH THE COMMISSION ON
FEBRUARY 15, 2005 AND THEREAFTER, AND WITH ALL OF THE COMPANY’S OTHER PUBLIC
FILINGS AND, IN ACCORDANCE WITH SUCH DISCLOSURE, THE PURCHASER (I) IS NOT
RELYING ON THE COMPANY’S PREVIOUSLY-ISSUED FINANCIAL STATEMENTS FOR THE YEARS
ENDED DECEMBER 31, 2003, 2002, 2001 AND 2000, AND EACH OF THE QUARTERLY PERIODS
ENDED MARCH 31, JUNE 30 AND SEPTEMBER 30, 2004, 2003 AND 2002 AND (II) IS AWARE
OF AND HAS HAD ACCESS TO, AND OPPORTUNITY TO ASK QUESTIONS OF, AND RECEIVE
ANSWERS FROM, THE COMPANY CONCERNING ALL OF THE INFORMATION SET FORTH IN ALL
SUCH PUBLIC FILINGS AND/OR ANY OTHER COMPANY MATTERS.

 

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ARTICLE VI

CONDITIONS TO CLOSING

 

6.1                               Conditions to Purchaser’s Obligations.

 

The obligation of the Purchaser to purchase and pay for the Purchased Securities
at the Closing is subject to the satisfaction of the following conditions
precedent (unless waived by the Purchaser):

 

(a)                                  The Company shall have duly issued and
delivered to the Purchaser the certificates for the Purchased Securities
pursuant to Section 3.2;

 

(b)                                 The Purchaser shall have received a
certificate from the Secretary or an Assistant Secretary of the Company, dated
as of the Closing Date, certifying (i) that true and complete copies of the
Fundamental Documents of the Company as in effect on such date are attached
thereto, (ii) as to the incumbency and genuineness of the signatures of each
Person executing this Agreement and the other Documents on behalf of the Company
and (iii) the genuineness of the resolutions (attached thereto) of the Board or
committee thereof authorizing the execution, delivery and performance of this
Agreement and the other Documents to which the Company is a party and the
consummation of the transactions contemplated hereby and thereby;

 

(c)                                  Each of the Documents shall be in full
force and effect and no material term or condition thereof shall have been
amended, waived or otherwise modified without the prior written consent of the
Purchaser; and

 

(d)                                 The receipt of all third party and
governmental consents and approvals necessary for the consummation of all
transactions contemplated herein, or any necessary modifications of third party
agreements, including, but not limited to, Board and stockholder consents and
approvals.

 

6.2                               Conditions to the Company’s Obligations.

 

The obligation of the Company to issue the Purchased Securities to the Purchaser
at the Closing is subject to the satisfaction of the following conditions
precedent (unless waived by the Company):

 

(a)                                  The Company shall have received payment
from the Purchaser of the consideration set forth in Section 2.4 in accordance
with the terms thereof;

 

(b)                                 The Purchaser shall have performed its
obligations under, and shall have complied with, all the covenants and
agreements set forth in this Agreement and all representations and warranties
contained in Article V shall be true and correct as of the date of the Closing;

 

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(c)                                  Each of the Documents shall be in full
force and effect and no material term or condition thereof shall have been
amended, waived or otherwise modified without the prior written consent of the
Company; and

 

(d)                                 Each of the Consent Solicitation and the
Bank Consent shall be effective, or shall become effective substantially
simultaneous with the Closing, in each case in accordance with its or their
respective terms.

 

ARTICLE VII

COVENANTS OF THE COMPANY AND THE PURCHASER

 

7.1                               Repurchase of Purchased Securities.

 

The Company and the Purchaser acknowledge and agree that, subject to
Section 7.2, from and after June 1, 2006, the Company shall have the right to
cause the Purchaser to sell to the Company any or all of the Purchased
Securities then held by the Purchaser.  If the Company elects to exercise such
repurchase rights, it shall provide the Purchaser subject to such repurchase
with notice (a “Repurchase Notice”) to such effect and shall specify therein the
(i) number of Purchased Securities subject to such repurchase and (ii) with
respect to any Warrant or share of Common Stock issuable upon the exercise
thereof, the Board FMV (as defined herein) in accordance with Section 7.2(b). 
The Purchaser shall provide representations and agreements of the type specified
in Section 2.6(b) of the Stockholders’ Agreement in connection with any such
sale or repurchase.  The Purchaser, in its capacity as a Stockholder under the
Stockholders’ Agreement hereby acknowledges that any transfer of Purchased
Securities pursuant to this Article VII shall be a “Permitted Transfer” under
the definition thereof in the Stockholders’ Agreement, pursuant to clauses
(a)(v) and (b)(i), as applicable.

 

7.2                               Purchase Price; Dispute Procedures.

 

(a)                                  Preferred Share Purchase Price; Permitted
Transfer.  The purchase price per Preferred Share to be repurchased pursuant to
Section 7.1 shall be equal to the sum of (i) $1.00 and (ii) the Premium.  The
“Premium” shall be an amount in cash equal to the product of (A) 8% (calculated
on a per year basis or on any portion thereof, commencing on the date hereof and
assuming a year of 360 days) and (B) $1.00.  The purchase price per Warrant or
share of Common Stock issuable upon the exercise thereof to be repurchased shall
be the Fair Market Value.

 

(b)                                 Determination of Warrant Fair Market Value;
Dispute Procedures.  In connection with the distribution of any Repurchase
Notice, the Board shall determine the fair market value (the “Board FMV”) of the
Warrants or the Common Stock issuable upon the exercise thereof.  Not later than
fifteen (15) days after its receipt of any Repurchase Notice, the Purchaser may
dispute the Board FMV contained therein by delivering to the Company notice to
such effect and therein setting forth the Purchaser’s Alternate FMV (a “Dispute
Notice”).  If a Dispute Notice is timely delivered by the Purchaser, each of the
Company and the Purchaser shall, within ten days after delivery of such Dispute
Notice, (1) jointly conduct a lottery to select from among the ‘Big Four’
national accounting firms (excluding, if applicable, the Company’s

 

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then-current independent auditor) or (2) solely to the extent agreed to by each
of the Company and the Purchaser, otherwise agree on, in either case, a single
accounting firm to act as a neutral appraiser ((1) or (2), the “Neutral
Appraiser”).  Each of the Purchaser and the Company agrees to execute, if
requested by the Neutral Appraiser, a reasonable engagement letter, including
providing customary indemnities.  The Neutral Appraiser shall act as an
arbitrator to determine the fair market value of the Warrant or shares of Common
Stock issuable upon the exercise thereof.  The Company covenants and agrees to
provide the Neutral Appraiser with such financial and other information
reasonably requested by the Neutral Appraiser in connection with its
determination of fair market value, subject to the Neutral Appraiser’s entry
into a confidentiality agreement reasonably acceptable to the Company.  Not
later than thirty (30) days after the selection of the Neutral Appraiser, the
Neutral Appraiser shall render its decision on the fair market value of the
Warrant or shares of Common Stock issuable upon the exercise thereof; provided,
that the Neutral Appraiser’s proposed fair market value may not be (i) less than
the lower of the Board FMV and Alternate FMV or (ii) greater than the greater of
the Board FMV and Alternate FMV.  The fair market value as determined by the
Neutral Appraiser in accordance with the foregoing shall be deemed to be the
Fair Market Value, shall be set forth in writing and delivered to each of the
Company and the Purchaser, and shall be final, binding and conclusive and
non-appealable, other than for manifest error or fraud.

 

(c)                                  Fees and expenses of the Neutral Appraiser
engaged in accordance with the terms hereof shall be borne pro rata as between
the Company, on the one hand, and the Purchaser, on the other hand, in
proportion to the relationship between such party’s proposed fair market value
and the Fair Market Value, such that the party with a proposed fair market value
closer to the Fair Market Value shall pay the lesser amount.

 

ARTICLE VIII

MISCELLANEOUS

 

8.1                               Further Assurances.

 

The Company shall duly execute and deliver, or cause to be duly executed and
delivered, at its own cost and expense, such further instruments and documents
and to take all such action, in each case as may be necessary or proper in the
reasonable judgment of the Purchaser to carry out the provisions and purposes of
the Agreement and the other Documents.

 

8.2                               Specific Performance; Remedies.

 

Damages in the event of breach of this Agreement or any other Document by the
Company or the Purchaser would be difficult, if not impossible, to ascertain,
and it is therefore agreed that the Company and the Purchaser, in addition to
and without limiting any other remedy or right it may have, will have the right
to an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof and thereof, and the Company and the Purchaser hereby
waive any and all defenses each may have on the ground of lack of jurisdiction
or competence of the court to grant such an injunction or other equitable
relief.  The existence of this right to specific performance

 

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will not preclude the Company or the Purchaser from pursuing any other rights
and remedies at law or in equity that the Company or the Purchaser may have.

 

8.3                               Successors and Assigns.

 

(a)                                  Neither the Company nor the Purchaser may
assign any of its rights or obligations hereunder without the prior written
consent of the other party.

 

(b)                                 For the avoidance of doubt, the Purchased
Securities purchased hereunder shall be subject to the terms and provisions of
the Stockholders’ Agreement.

 

8.4                               Entire Agreement.

 

This Agreement and the other writings referred to herein or delivered pursuant
hereto that form a part hereof contain the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all prior
and contemporaneous arrangements or understandings with respect thereto.

 

8.5                               Notices.

 

(a)                                  All notices, claims, requests, demands or
other communications that are required or otherwise delivered hereunder shall be
deemed to be sufficient and duly given if contained in a written instrument
(i) personally delivered or sent by telecopier, (ii) sent by
nationally-recognized overnight courier guaranteeing next Business Day delivery
or (iii) sent by first class, registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

 

(i)                                     if to the Company, to:

 

MQ Associates, Inc.

4300 North Point Parkway

Alpharetta, GA  30022

Attention:  Todd W. Latz

Telephone No.: (770) 300-0101

Telecopier No.: (678) 992-7538

 

with copies to:

 

G. William Speer

1 Atlantic Center, 14th Floor

1201 W. Peachtree Street, NW

Atlanta, GA 30309

Telephone No.: (404) 572-6722

Telecopier No.: (404) 572-6999; and

 

(ii)                                  if to the Purchaser, to:

 

MQ Investment Holdings II, LLC

 

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c/o J.P. Morgan Partners, LLC

1221 Avenue of the Americas, 40th Floor

New York, New York 10020-1080

Attention:  Official Notices Clerk

Telephone No.: (212) 899-3400

Telecopier No.: (212) 899-3401.

 

(b)                                 Any notice, demand or request so delivered
shall constitute valid notice under this Agreement and shall be deemed to have
been received (i) on the day of actual delivery in the case of personal
delivery, if delivered on a Business Day (otherwise on the next Business Day),
(ii) on the next Business Day after the date when sent in the case of delivery
by nationally-recognized overnight courier, (iii) on the fifth Business Day
after the date of deposit in the U.S. mail in the case of mailing or (iv) upon
receipt in the case of a facsimile transmission if received on a Business Day
(otherwise on the next Business Day).  Any party hereto may from time to time by
notice in writing served upon the other as aforesaid designate a different
mailing address or a different Person to which all such notices, demands or
requests thereafter are to be addressed.

 

8.6                               Amendments, Modifications and Waivers.

 

(a)                                  The terms and provisions of this Agreement
may not be modified or amended, nor may any of the provisions hereof be waived,
temporarily or permanently, except pursuant to a written instrument executed by
the Company and the Purchaser.

 

(b)                                 No waiver by either party shall operate or
be construed as a waiver of any subsequent breach by the other party.

 

8.7                               Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS
EXCEPT TO THE EXTENT THAT THE NEW YORK CONFLICTS OF LAWS PRINCIPLES WOULD APPLY
THE APPLICABLE LAWS OF THE STATE OF THE COMPANY’S ORGANIZATION TO INTERNAL
MATTERS RELATING TO ENTITIES SUCH AS THE COMPANY ORGANIZED THEREUNDER).

 

8.8                               Third Party Reliance.

 

No third party (including, without limitation, any holder of capital stock of
the Company) or anyone acting on behalf of any Person other than the Purchaser,
and each of them and their respective successors and assigns, shall be a third
party or other beneficiary of such representations and warranties.  No such
third party shall have any rights of contribution against the Purchaser or the
Company with respect to such representations or warranties or any matter subject
to or resulting in indemnification under this Agreement or otherwise.

 

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8.9                               Submission to Jurisdiction.

 

Any legal action or proceeding with respect to this Agreement may be brought in
the courts of the State of New York and the United States of America for the
Southern District of New York and, by execution and delivery of this Agreement,
the Company hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts.  The Company
hereby irrevocably waives, in connection with any such action or proceeding, any
objection, including, without limitation, any objection to the venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.  The
Company hereby irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at its address
as set forth herein.  Nothing herein shall affect the right of the Purchaser to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Company in any other jurisdiction.

 

8.10                        Information.

 

The Purchaser assumes all responsibility for being and keeping itself informed
of the Company’s and its Subsidiaries’ financial condition and assets, and the
nature, scope and extent of the risks that the Purchaser assumes and incurs
hereunder.

 

8.11                        Severability.

 

It is the desire and intent of the parties that the provisions of this Agreement
be enforced to the fullest extent permissible under the law and public policies
applied in each jurisdiction in which enforcement is sought.  Accordingly, in
the event that any provision of this Agreement would be held in any jurisdiction
to be invalid, prohibited or unenforceable for any reason, such provision, as to
such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any jurisdiction.  Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as to not be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

8.12                        Counterparts; Facsimile Signatures.

 

This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.  Facsimile counterpart
signatures to this Agreement shall be acceptable and binding.

 

*   *   *   *   *

 

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IN WITNESS WHEREOF, the parties have duly executed this Securities Purchase
Agreement as of the date first above written.

 

 

 

MQ ASSOCIATES, INC.

 

 

 

 

 

By:

/s/ Donald C. Tomasso

 

 

 

Name: Donald C. Tomasso

 

 

Title: Chief Executive Officer

 

 

 

 

 

MQ INVESTMENT HOLDINGS II, LLC

 

 

 

 

 

By:

/s/ Ben Edmands

 

 

 

 Name: Benjamin B. Edmands

 

 

 Title: Director

 

 

[Signature page to SPA]

 

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