4.1


 


FIRST SUPPLEMENTAL INDENTURE


 


This First Supplemental Indenture, dated as of August 15,
2005 (this “Supplemental Indenture”), between MQ Associates, Inc. (the
“Company”) and Wachovia Bank, National Association, as Trustee under the
Indenture referred to below.  Unless
otherwise specified, capitalized terms used in this Supplemental Indenture have
the meanings assigned to them in the Indenture. 



 


WITNESSETH:


 


WHEREAS, the Company and the
Trustee have heretofore executed and delivered an Indenture, dated as of August 24,
2004 (the “Indenture”), providing for the issuance of an aggregate
principal amount at maturity of $136,000,000 of the Company’s 121⁄4% Senior
Discount Notes due 2012 (the “Securities”);


 


WHEREAS, pursuant to Section 9.2 of the Indenture, (i) the
Company and the Trustee may amend the Indenture (subject to certain exceptions)
with the written consent of the Holders of at least a majority in principal
amount at maturity of the Securities then outstanding, and (ii) compliance
with the provisions of the Indenture may be waived (subject to certain
exceptions) with the written consent of the Holders of at least a majority in
principal amount at maturity of the Securities then outstanding (in both cases,
the “Requisite Consents”); 


 


WHEREAS, the Company has solicited the consent of the
Holders of Securities as of July 29, 2005 (the “Record Date”) to
the Waiver and Proposed Amendments (as such terms are defined below) upon the
terms and subject to the conditions set forth in the Consent Solicitation Statement
and the related Letter of Consent and Release, each dated July 29, 2005
(together, as amended, supplemented or modified from time to time, the “Consent
Solicitation”); 


 


WHEREAS, the
consummation of the Consent Solicitation is conditioned upon, among other
things, the proposed amendments (the “Proposed Amendments”) to the
Indenture set forth herein having been consented to by the Requisite Consents
(and a supplemental indenture in respect thereof having been executed and
delivered) with the effectiveness of such Proposed Amendments being subject to
the acceptance of such consents immediately following the expiration date (as
such term is defined in the Consent Solicitation) pursuant to the Consent
Solicitation (the “Acceptance”); 


 


WHEREAS, pursuant to the Consent
Solicitation, the Company requested the consent of the Holders of Securities as
of the Record Date to, among other things, (i) waive (the “Waiver”)
any and all Defaults with respect to the Company’s noncompliance with the
financial reporting and other requirements specified in Sections 3.2, 3.17
and 3.19 of the Indenture, including, without limitation, the Company’s
failure to file its annual report on Form 10-K for the fiscal year ended December 31,
2004 and its quarterly report on Form 10-Q for the quarter ended March 31,
2005, and any Events of Default that may arise from such Defaults, in each
case, which Defaults or Events of Defaults are in existence as of the Effective
Time (as defined below); (ii) until December 31, 2005, suspend compliance
with the financial reporting covenants and related delivery requirements
specified in Sections 3.2, 3.17 and 3.19 of the Indenture to the extent
such covenants relate to the financial reports, information, documents or
statements to be


 





















 


provided, filed or made available for annual or
quarterly periods ending before December 31, 2005; and (iii) amend Section 3.4(b) of
the Indenture to provide that, at any time after June 30, 2006, if certain
conditions are met, the Company may pay a cash dividend or distribution to, or
purchase, acquire or redeem Capital Stock of the Company held by affiliates of
J.P. Morgan Partners LLC and certain other existing direct and indirect
stockholders of the Company or by any other Persons; and 


 


WHEREAS, the Company has received and delivered to the
Trustee the Requisite Consents to effect the Proposed Amendments and the Waiver
under the Indenture and has delivered an Officers’ Certificate to the Trustee
so certifying (together with a copy of the report from the tabulation and
information agent for the Consent Solicitation).


 


NOW THEREFORE, in consideration
of the foregoing and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the Company and the Trustee mutually covenant and
agree for the equal and ratable benefit of the Holders of the Securities as
follows:


 


ARTICLE I



DEFINITIONS


 


1.1                               Defined
Terms.  


 


As used in this Supplemental Indenture, terms defined
in the Indenture or in the preamble or recital hereto are used herein as therein
defined.  The words “herein,” “hereof”
and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Indenture. 


 


1.2                               Effective Time.


 


As used in this Supplemental Indenture, the term “Effective
Time” shall be the time at which all of the conditions to the Consent
Solicitation have been satisfied or waived by the Company, which shall be
concurrent with the Acceptance.  The
Company shall promptly give written notice to the Trustee of the Effective
Time.  


 


ARTICLE II



AMENDMENTS TO INDENTURE


 


2.1                               Amendments
to Section 1.1.


 


Effective upon, and subject only to, the Acceptance,
the provisions of Section 1.1 of the Indenture are amended by inserting
the following defined terms in their respective
correct alphabetical order:


 


“Additional
Equity Investment” means at least $20.0 million in the aggregate in cash
received by the Company in consideration for the


 


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sale by the
Company to the Equity Investors of Qualified Stock pursuant to a purchase
agreement to be entered into between the Company and the Equity Investors.


 


“Additional
Interest Payments” means a cash interest amount which will accrue on the
Accreted Value as of the end of the Company’s most recently completed fiscal
quarter of the Securities from July 1, 2005 (or from the most recent date
to which the Additional Interest Payments have been made) to (but not
including) the earlier of the Restatement Date or the Default Notice Date at a
rate of 1.00% per annum, to be computed on the basis of a 360-day year
comprised of twelve 30-day months. The Additional Interest Payments shall be
paid by the Company quarterly in arrears (i) on October 15, 2005 (for
the quarter ended September 30, 2005) to the Holders of record as of the
close of business on October 1, 2005, (ii) on January 15, 2006
(for the quarter ended December 31, 2005) to the Holders of record as of
the close of business on January 1, 2006 and (iii) on the 15th
day of the month following the end of each subsequent calendar quarter to the
Holders of record as of the close of business on the first day immediately
following the end of such quarter. The Company’s obligation to make Additional
Interest Payments is in addition to its obligation to pay semiannual cash
interest on the Securities commencing August 15, 2008 as specified in
paragraph 1 of the Securities. It is expressly understood that the Additional
Interest Payments shall not change the definition of the Accreted Value of the
Securities.


 


The method of
payment for such Additional Interest Payments shall be made in accordance with
the same terms and provisions set forth in this Indenture and the Securities
relating to the payment of cash interest on the Securities.


 


“Consent
Fee” means a payment in cash to the tabulation agent appointed by the
Company for such purpose for the benefit of the Consenting Noteholders equal to
$1.75 for each $1,000 principal amount at maturity of the Securities for which
consents were delivered by each such Consenting Noteholder and accepted by the
Company.


 


“Consenting
Noteholders” means the Persons in whose names Securities were registered in
the Note Register on July 29, 2005 from whom properly executed, unrevoked
Letters of Consent and Release were received on or prior to the expiration date
in accordance with the Company’s Consent Solicitation Statement dated July 29,
2005 and the related Letter of Consent and Release.


 


“Consolidated
Leverage Ratio”  means as of any date
of determination, with respect to any Person, the ratio of (x)


 


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Consolidated
Total Debt on such date of determination to (y) the aggregate amount of
Consolidated EBITDA for the period of four consecutive fiscal quarters ending
prior to the date of determination for which financial statements are in
existence; provided, however, that:


 


(1)                                  if since the beginning of such period such Person or
any Restricted Subsidiary of such Person will have disposed of any company,
division, diagnostic imaging center, operating unit, segment, business, group
of related assets or line of business, the Consolidated EBITDA for such period
will be reduced by an amount equal to the Consolidated EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to the Consolidated
EBITDA (if negative) directly attributable thereto for such period;


 


(2)                                  if since the beginning of such period such Person or
any Restricted Subsidiary of such Person (by merger or otherwise) will have
made an Investment in any Restricted Subsidiary (or another Person which
becomes a Restricted Subsidiary or is merged with or into such Person) or an
acquisition of assets, which constitutes all or substantially all of any
company, division, diagnostic imaging center, operating unit, segment,
business, group of related assets or line of business, Consolidated EBITDA for
such period will be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period; and


 


(3)                                  if since the beginning of such period another Person
(that subsequently became a Restricted Subsidiary or was merged with or into
such Person or any of its Restricted Subsidiaries since the beginning of such
period) will have Incurred any Indebtedness or discharged any Indebtedness,
made any Asset Disposition or any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (1) or (2) above
if made by such Person or its Restricted Subsidiary during such period, Consolidated
EBITDA for such period will be calculated after giving pro forma effect thereto
as if such Incurrence, discharge, Asset Disposition or Investment or
acquisition of assets occurred on the first day of such period.


 


For purposes
of this definition, whenever pro forma effect is to be given to any calculation
under this definition, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer of such Person. Any such
pro forma calculations may include operating expense reductions for such period
resulting from the acquisition which is being given pro forma effect that (a) would
be permitted pursuant to Article 11 of


 


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Regulation S-X
under the Securities Act or (b) have been realized or for which the steps
necessary for realization have been taken or are reasonably expected to be
taken within six months following any such acquisition, including, but not
limited to, the execution or termination of any contracts, the termination of
any personnel or the closing (or approval by the Board of Directors of any
closing) of any diagnostic imaging center or facility, as applicable, provided
that such adjustments are set forth in an Officers’ Certificate signed by such
Person’s Chief Financial Officer and another Officer which states (i) the
amount of such adjustment or adjustments, (ii) that such adjustment or
adjustments are based on the reasonable good faith beliefs of the Officers
executing such Officers’ Certificate at the time of such execution and (iii) that
any related Incurrence of Indebtedness is permitted pursuant to this Indenture.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness will be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months). If any Indebtedness that is being given pro forma
effect bears an interest rate at the option of such Person, the interest rate
shall be calculated by applying such optional rate chosen by such Person.


 


“Consolidated
Total Debt” means, at any date, the aggregate principal amount of all
Indebtedness, without duplication, of the Company and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP, but excluding
Indebtedness of the type described in (a) clause (3) of the
definition thereof and, to the extent relating to clause (3), the types
described in clauses (7) and (8) of the definition thereof unless
such Indebtedness has been fully liquidated and is no longer a contingent
obligation, (b) clause (9) of the definition thereof and (c) clause
(10) of the definition thereof.


 


“Default
Notice Date” means, if the Restatement Date has not occurred by the Waiver
Expiration Date, the date that the Company receives a Notice of Default from
the Trustee or the Holders of 25% or more in principal amount at maturity of
the Securities relating to the failure to comply with Sections 3.2, 3.17 and/or
3.19 of the Indenture.


 


“Effective
Time” means the date specified as the effective time for the First
Supplemental Indenture by and between the Company and the Trustee.


 


“Equity
Investors” means Affiliates and Related Persons of J.P. Morgan Partners LLC
and certain other direct and indirect existing


 


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stockholders of
the Company who are party to that certain purchase agreement with the Company
to be entered into as of August    , 2005, and their
respective transferees, successors and assigns.


 


“Restatement
Date” means the date that the Company has filed with the SEC its Annual
Report on Form 10-K for the year ended December 31, 2004 and all
other past due periodic reports required to be filed.


 


“Waiver
Expiration Date” means December 31, 2005. 


 


2.2                               Amendments to Section 3.2. 


 


Effective upon, and subject only to, the Acceptance,
the provisions of Section 3.2 of the Indenture are amended by deleting the
text of such Section in its entirety and inserting in lieu thereof the
following:


 


SECTION 3.2
SEC Reports.


 


SEC
Reports.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, to the
extent permitted by the Exchange Act, the Company shall (except as provided in
the third paragraph of this Section 3.2) file with the SEC, and make
available to the Trustee and the registered Holders of the Securities, the
annual reports and the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that are specified in Sections 13 and 15(d) of the
Exchange Act within the time periods specified therein. In the event that the
Company is not permitted to file such reports, documents and information with
the SEC pursuant to the Exchange Act, the Company will nevertheless make
available such Exchange Act information to the Trustee and the Holders of the
Securities as if the Company were subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act within the time periods specified therein.


 


If the
Unrestricted Subsidiaries of the Company, either individually or in the
aggregate, would constitute a Significant Subsidiary (if such Subsidiaries were
Restricted Subsidiaries), then the quarterly and annual reports referred to in
the preceding paragraph shall include a Management’s Discussion and Analysis of
Results of Operations and Financial Condition that describes, for the relevant
period, the financial performance of the Company and its Restricted
Subsidiaries.


 


Notwithstanding
any other provision in this Section 3.2 or the Securities, from the
Effective Time until the Waiver Expiration Date, and so long as (i) the
Consenting Noteholders receive the


 


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Consent Fee, (ii) the
registered Holders as of the close of business on each of October 1, 2005
and January 1, 2006 receive the Additional Interest Payments on the
Securities when the same becomes due and payable (as specified in the
definition thereof) and (iii) the Company has received the Additional
Equity Investment, the Company shall not be required to file with the SEC or
make available the annual report and the other, information, documents and
reports that the Company otherwise would have been required to file with the
SEC or make available to the Trustee and the Holders of the Securities pursuant
to this Section 3.2.


 


In addition to
the foregoing, the Company will file with the SEC a Current Report on Form 8-K
(a) not later than the 15th day after the end of each month
beginning with the month of May 2005, selected financial and operational
information consisting of the following: gross revenue, interest expense, scan
volumes, existing center gross revenue and number of centers in operation,
total outstanding indebtedness, cash bank balance and book balance (including
outstanding checks) and amounts available for borrowing under the Senior Credit
Agreement; (b) not later than the 45th day after the end of
each month beginning with the month of May 2005, selected financial and
operating information consisting of net revenue and capital expenditures; and (c) not
later than the 45th day after the end of each month beginning with
the month of September 2005, selected financial information consisting of
operating cash flow; provided that notwithstanding the foregoing, the first Current
Report on Form 8-K filing shall be made on or before July 29, 2005
and provided further that the Company’s 
obligation to make the filings specified in this paragraph with the SEC
shall cease upon the earlier of the Restatement Date and the Waiver Expiration
Date.


 


2.3                               Amendments
to Section 3.4(b).


 


Effective
upon, and subject only to, the Acceptance, the provisions of Section 3.4(b) of
the Indenture are amended by deleting the “and” after clause (14) thereof, (ii) deleting
the “.” after clause (15) thereof and inserting a “;” in lieu thereof and (iii) inserting
the following text in the correct numerical order:


 


(16)                            at any time after June 30, 2006, so long as the
Consolidated Leverage Ratio (determined after giving effect to any Incurrence
of Indebtedness used to finance such Restricted Payment) is not more than 5.1
to 1.0, (i) the declaration and payment of cash dividends or distributions
to holders of the Company’s Capital Stock and/or (ii) the purchase,
repurchase, redemption or other acquisition of Capital Stock of the Company
held by the Equity Investors or by any other Persons, in the case of both
clauses (i) and (ii), in an amount up to $10.0 million; provided, however,
that such amount


 


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will be included in
subsequent calculations of the amount of Restricted Payments.


 


ARTICLE III


WAIVER


 


3.1                               Waiver.


 


Effective
upon, and subject to, the Acceptance, any Default or Event of Default under the
Indenture then in existence as a result of the failure by the Company to comply
with Sections 3.2, 3.17 and 3.19 of the Indenture and the consequences of any
such Default or Event of Default shall be waived in accordance with Section 6.4
of the Indenture.


 


ARTICLE IV


 


MISCELLANEOUS


 


4.1                               Parties.


 


Nothing expressed or mentioned herein is intended or
shall be construed to give any Person, firm or corporation, other than the
Holders and the Trustee, any legal or equitable right, remedy or claim under or
in respect of this Supplemental Indenture or the Indenture or any provision
herein or therein contained.


 


4.2                               Governing
Law.


 


This Supplemental Indenture shall be governed by, and
construed in accordance with, the laws of the State of New York.


 


4.3                               Severability
Clause.


 


In case any provision in this Supplemental Indenture
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and such provision shall be ineffective only to the extent of
such invalidity, illegality or unenforceability.


 


4.4                               Ratification
of Indenture; Supplemental Indentures Part of Indenture.


 


Except as expressly amended hereby, the Indenture is
in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect.  This Supplemental Indenture shall form a part
of the Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.  The recitals contained herein shall be taken
as the statements of the Company and the Trustee assumes no responsibility for
their correctness.  The Trustee makes no
representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.


 


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4.5                               Conflict
with Trust Indenture Act.


 


If any provision of this
Supplemental Indenture limits, qualifies or conflicts with any provision of the
Trust Indenture Act of 1939 (the “TIA”) that is required or deemed under
the TIA to be part of and govern any provision of this Supplemental Indenture,
such required or deemed provision of the TIA shall control. If any provision of
this Supplemental Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the provision of the TIA shall be deemed to
apply to the Indenture as so modified or to be excluded by this Supplemental
Indenture.


 


4.6                               Successors.


 


All agreements of the Company in this Supplemental Indenture shall bind
its successors. All agreements of the Trustee in this Supplemental Indenture
shall bind its successors.


 


4.7                               Counterparts.


 


The parties hereto may sign one or more copies of this
Supplemental Indenture in counterparts, all of which together shall constitute
one and the same agreement.


 


4.8                               Headings.


 


The headings of the Articles and the Sections in this
Supplemental Indenture are for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any provisions
hereof.


 


[signature page follows]


 


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IN WITNESS WHEREOF, the parties
hereto have caused this Supplemental Indenture to be duly executed as of the
date first above written.


 


	
   

  	
  WACHOVIA BANK NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles S. Hodges

  	
   

  
	
   

  	
   

  	
  Name: Charles S. Hodges

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MQ ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Tomasso

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Tomasso

  
	
   

  	
   

  	
  Title: Interim Chief Executive Officer