Document:

Exhibit 4.1

 

THIRD SUPPLEMENTAL INDENTURE

 

This Third
Supplemental Indenture, dated as of June 19, 2003 (this “Supplemental
Indenture” or “Guarantee”), among Illinois Diagnostic Imaging, Inc.
(the “Guarantor”), MedQuest, Inc. (together with its successors and
assigns, the “Company”), MQ Associates, Inc., (“Holdings”), each
other then existing subsidiary Guarantor under the Indenture referred to below,
and Wachovia Bank, National Association, as Trustee under the Indenture
referred to below.

 

WITNESSETH:

 

WHEREAS,
the Company, Holdings, the Subsidiary Guarantors and the Trustee have
heretofore executed and delivered an Indenture, dated as of August 15, 2002 (as
amended, supplemented, waived or otherwise modified, the “Indenture”),
providing for the issuance of an aggregate principal amount of $180,000,000 of
11 7/8% Senior Subordinated Notes due 2012 of the Company (the “Securities”)

 

WHEREAS,
Section 3.12 of the Indenture provides that unless such Subsidiary has
previously issued a Notes Guarantee which is then in full force and effect, the
Company is required to cause each Subsidiary that issues a Guarantee in respect
of obligations under a Credit Facility to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Restricted Subsidiary will
unconditionally Guarantee, on a joint and several basis with the other
Guarantors, the full and prompt payment of, premium, if any, and interest on
the Securities; and

 

WHEREAS,
pursuant to Section 9.1 of the Indenture, the Trustee and the Company
are authorized to execute and deliver this Supplemental Indenture to amend the
Indenture, without the consent of any Securityholder;

 

NOW, THEREFORE,
in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guarantor, the
Company, Holdings, the other Subsidiary Guarantors 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, except that the term “Holders”
in this Guarantee shall refer to the term “Securityholders” as defined in the Indenture
and the Trustee acting on behalf or for the benefit of such Holders.  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.

 

 

ARTICLE
II

AGREEMENT TO BE BOUND; GUARANTEE

 

2.1                               Agreement
to be Bound.

 

The Guarantor
hereby becomes a party to the Indenture as a Subsidiary Guarantor and as such
will have all of the rights and be subject to all of the obligations and
agreements of a Subsidiary Guarantor under the Indenture.  The Guarantor agrees to be bound by all of
the provisions of the Indenture applicable to a Subsidiary Guarantor and to
perform all of the obligations and agreements of a Subsidiary Guarantor under
the Indenture.

 

2.2                               Guarantee.

 

The Guarantor
as of the Guarantor Effective Date (as hereinafter defined) hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely
as surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee, the full and punctual payment when
due, whether at maturity, by acceleration, by redemption, or otherwise, of the
Obligations pursuant to Article XI of the Indenture.

 

ARTICLE
III

 

MISCELLANEOUS

 

3.1                               Notices.

 

All notices
and other communications to the Guarantor shall be given as provided in the
Indenture to the Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company.

 

3.2                               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.

 

3.3                               Governing
Law.

 

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

 

3.4                               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.

 

2

 

3.5                               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 Trustee
makes no representation or warranty as to the validity or sufficiency of this
Supplemental Indenture.

 

3.6                               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.

 

3.7                               Headings.

 

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

 

3.8                               Additional Definitions.

 

As used in
this Supplemental Indenture, “Guarantor Effective Date” shall mean June
19, 2003.

 

[signature page follows]

 

3

 

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

	
   

  	
  ILLINOIS
  DIAGNOSTIC IMAGING, INC.

  
	
   

  	
  as a
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   John K. Luke

  
	
   

  	
  Name:

  	
   John K. Luke

  
	
   

  	
  Title:

  	
   President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK NATIONAL

  ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Eric J. Knoll

  
	
   

  	
  Name:

  	
   Eric J. Knoll

  
	
   

  	
  Title:

  	
   Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEDQUEST,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Gene Venesky

  
	
   

  	
  Name:

  	
   Gene Venesky

  
	
   

  	
  Title:

  	
   Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MQ
  ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Gene Venesky

  
	
   

  	
  Name:

  	
   Gene Venesky

  
	
   

  	
  Title:

  	
   Chairman

  
					

 

4

 

	
  IMAGING SERVICES OF ALABAMA, INC.

  	
   

  	
  KENOSHA DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  ANDERSON DIAGNOSTIC IMAGING, INC.

  	
   

  	
  LEXINGTON OPEN MRI, INC.

  
	
   

  	
   

  	
   

  
	
  ASHEVILLE OPEN MRI, INC.

  	
   

  	
  MECKLENBURG DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  BIOIMAGING AT CHARLOTTE, INC.

  	
   

  	
  MEDQUEST ASSOCIATES, INC.

  
	
   

  	
   

  	
   

  
	
  BIOIMAGING AT HARDING, INC.

  	
   

  	
  MISSOURI IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  BIOIMAGING OF COOL SPRINGS, INC.

  	
   

  	
  MOBILE OPEN MRI, INC.

  
	
   

  	
   

  	
   

  
	
  CABARRUS DIAGNOSTIC IMAGING, INC.

  	
   

  	
  OCCUPATIONAL SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
  CAPE FEAR DIAGNOSTIC IMAGING, INC.

  	
   

  	
  PALMETTO IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  CAROLINA IMAGING, INC. OF FAYETTEVILLE

  	
   

  	
  PHOENIX DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  CHAPEL HILL DIAGNOSTIC IMAGING, INC.

  	
   

  	
  PIEDMONT IMAGING, INC. (FORSYTH)

  
	
   

  	
   

  	
   

  
	
  CHATTANOOGA DIAGNOSTIC IMAGING, INC.

  	
   

  	
  PIEDMONT IMAGING, INC. (SPARTANBURG)

  
	
   

  	
   

  	
   

  
	
  DOTHAN DIAGNOSTIC IMAGING, INC.

  	
   

  	
  OPEN MRI & IMAGING OF RICHMOND, INC.

  
	
   

  	
   

  	
   

  
	
  FLORIDA DIAGNOSTIC IMAGING CENTER, INC.

  	
   

  	
  SOUTH CAROLINA DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  OPEN MRI OF GEORGIA, INC.

  	
   

  	
  SUN VIEW HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING OF GEORGIA, INC.

  	
   

  	
  TEXAS IMAGING SERVICES OF EL PASO, INC.

  
	
   

  	
   

  	
   

  
	
  GROVE DIAGNOSTIC IMAGING CENTER, INC.

  	
   

  	
  TRIAD IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  KANSAS DIAGNOSTIC IMAGING, INC.

  	
   

  	
  TYSON’S CORNER DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  NORTHEAST COLUMBIA DIAGNOSTIC IMAGING, INC.

  	
   

  	
  VIRGINIA DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  WISCONSIN DIAGNOSTIC IMAGING, INC.

  	
   

  	
  CAROLINAS DIAGNOSTIC IMAGING, INC.

  
	
   

  	
   

  	
   

  
	
  VIENNA DIAGNOSTIC IMAGING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  On behalf of each of the entities listed above:

  	
   

  	
  On behalf of each of the entities listed above:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John K. Luke

  	
   

  	
   

  	
  By:

  	
  /s/ John K. Luke

  	
   

  
	
   

  	
  Name: John K. Luke

  	
   

  	
   

  	
  Name: John K. Luke

  
	
   

  	
  Title: President

  	
   

  	
   

  	
  Title: President

  
							

 

5

 

	
  OPEN MRI & IMAGING OF ALBANY, LLC

  	
   

  	
  WOODSTOCK DIAGNOSTIC IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING OF ATHENS, LLC

  	
   

  	
  DIAGNOSTIC IMAGING OF HIRAM, LLC

  
	
   

  	
   

  	
   

  
	
  ATHENS MRI, LLC

  	
   

  	
  DIAGNOSTIC IMAGING OF MARIETTA, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI OF ATLANTA, LLC

  	
   

  	
  MONTGOMERY OPEN MRI, LLC

  
	
   

  	
   

  	
   

  
	
  BUCKHEAD DIAGNOSTIC IMAGING, LLC

  	
   

  	
  BIRMINGHAM DIAGNOSTIC IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI OF CENTRAL GEORGIA, LLC

  	
   

  	
  COASTAL IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  IMAGING CENTER OF CENTRAL GEORGIA, LLC

  	
   

  	
  DURHAM DIAGNOSTIC IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING OF CONYERS, LLC

  	
   

  	
  JACKSONVILLE DIAGNOSTIC IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  CUMMING DIAGNOSTIC IMAGING, LLC

  	
   

  	
  CAPE IMAGING, L.L.C.

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING OF DEKALB, LLC

  	
   

  	
  BRIDGETON MRI AND IMAGING CENTER, LLC

  
	
   

  	
   

  	
   

  
	
  DULUTH DIAGNOSTIC IMAGING, LLC

  	
   

  	
  KIRKWOOD MRI AND IMAGING CENTER, LLC

  
	
   

  	
   

  	
   

  
	
  DULUTH CT CENTER, LLC

  	
   

  	
  ST. PETERS MRI & IMAGING CENTER, LLC

  
	
   

  	
   

  	
   

  
	
  DIAGNOSTIC IMAGING OF ATLANTA, LLC

  	
   

  	
  OPEN MRI & IMAGING OF RICHMOND, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING OF NORTH FULTON, LLC

  	
   

  	
  RICHMOND WEST END DIAGNOSTIC IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING
  OF N.E. GEORGIA, LLC

  	
   

  	
  CAROLINA MEDICAL
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  DIAGNOSTIC IMAGING OF
  GEORGIA, LLC

  	
   

  	
  OPEN MRI OF
  SIMPSONVILLE, LLC

  
	
   

  	
   

  	
   

  
	
  MIDTOWN DIAGNOSTIC
  IMAGING, LLC

  	
   

  	
  SIMPSONVILLE OPEN MRI,
  LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING
  OF DOUGLASVILLE, LLC

  	
   

  	
  EAST COOPER DIAGNOSTIC
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  HAPEVILLE DIAGNOSTIC
  IMAGING, LLC

  	
   

  	
  FARMFIELD DIAGNOSTIC
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI & IMAGING
  OF MACON, LLC

  	
   

  	
  FORT MILL DIAGNOSTIC
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  OPEN MRI AND IMAGING OF
  SNELLVILLE, LLC

  	
   

  	
  TRICOM DIAGNOSTIC
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  WEST PACES DIAGNOSTIC
  IMAGING, LLC

  	
   

  	
  WEST ASHLEY DIAGNOSTIC
  IMAGING, LLC

  
	
   

  	
   

  	
   

  
	
  TOWN & COUNTRY OPEN
  MRI, LLC

  	
   

  	
  CLAYTON OPEN MRI, LLC

  
	
   

  	
   

  	
   

  
	
  BRUNSWICK DIAGNOSTIC
  IMAGING, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  On behalf of each of
  the entities listed above:

  	
   

  	
  On behalf of each of the
  entities listed above:

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gene Venesky

  	
   

  	
   

  	
  By:

  	
  /s/ Gene Venesky

  	
   

  
	
   

  	
  Name:  Gene Venesky

  	
   

  	
   

  	
  Name:  Gene Venesky

  
	
   

  	
  Title:  Manager

  	
   

  	
   

  	
  Title:  Manager

  
							

 

6

 

	
   

  	
   

  	
  OPEN MRI & IMAGING
  OF FLORENCE, LLC

  
	
   

  	
   

  	
  OPEN MRI OF MYRTLE
  BEACH, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Palmetto Imaging, Inc.,
  as sole member of each of

  the entities listed above

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John K. Luke

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  John K. Luke

  
	
   

  	
   

  	
   

  	
  Title:    President

  

 

7Exhibit
10.1

 

MQ
ASSOCIATES, INC.

 

2003
STOCK
OPTION PLAN

 

1.                                      Purpose.

 

The purpose of the MQ Associates, Inc. 2003 Stock
Option Plan (the “Plan”) is to provide an incentive to certain employees of MQ
Associates, Inc., a Delaware corporation (the “Company”), and of the Company’s
subsidiaries and affiliates (the Company and its subsidiaries and affiliates
are referred to collectively as “MedQuest”) by granting such employees: (i)
incentive stock options (“ISOs”), within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), and (ii) options that are not
ISOs (“NQSOs”), in either case to acquire shares of the Company’s common stock,
par value $0.001 per share (“Shares” of “Stock”).  Collectively, ISOs and NQSOs granted under the Plan are referred
to herein as “Options.”

 

2.
                                   Effective
Date and Term of the Plan.

 

The Plan is effective as of January 1, 2003 (the
“Effective Date”).  Subject to Sections
10 and 12 below, the Plan shall continue in effect from the Effective Date until
the day before the tenth anniversary of the Effective Date (the “Termination
Date”).  In no event shall any Options
be granted under the Plan after the Termination Date.  Options granted prior to the Termination Date shall remain in
effect until their exercise, surrender, cancellation or expiration in
accordance with their terms and the terms of the Plan.  It is acknowledged that the terms of the
Plan shall continue in effect after the Termination Date for so long as is
necessary to the enforcement of the rights and obligations of the Company and
any Optionee under the Plan or any Option.

 

 

3.                                      Stock
Subject to the Plan.

 

(a)                                  Subject to adjustment
as provided in Section 10 below, the aggregate number of Shares subject to
Options granted under the Plan shall not exceed Sixteen Million Nine Hundred
Ninety-Nine Thousand Nine Hundred and Ninety-Nine (16,999,999) (the “Total
Authorized Shares”); provided, however, that only Top-Off Options (as defined
in Section 11 below) may be granted with respect to Five Million Five Hundred
Fifty-Five Thousand Five Hundred and Fifty-Five (5,555,555) of the Total
Authorized Shares, such that, prior to Conversion as described in Section 11,
the aggregate number of Shares subject to Options granted under the Plan shall
not exceed Eleven Million Four Hundred Forty-Four Thousand Four Hundred and
Forty-Four (11,444,444) (the “Pre-Conversion Total Authorized Shares”).

 

(b)                                  Shares subject to
Options that for any reason expire, or are canceled, terminated, forfeited or
otherwise settled without the issuance of such Shares shall again be available
for award under the Plan, subject to the limitation set forth in Subsection (a)
above.

 

(c)                                 Shares issued upon
exercise of Options may consist, in whole or in part, of Shares held in treasury
or authorized but unissued Shares not reserved for any other purpose.

 

(d)                                  Shares issued upon
the exercise of Options shall be fully paid and nonassessable.

 

(e)                                  Unless
otherwise determined by the Committee, no Option shall be exercisable with
respect to any fractional Shares.

 

4.                                      Administration
of the Plan.

 

(a)                                  Committee.  The Plan shall be administered by the
Company’s Board of Directors (the “Board”) or a committee thereof (the Board or
committee is hereinafter referred to as the 
“Committee”).  The Committee
shall at all times consist of at least two members, each of whom shall be a
Director who is a “non-employee director” within the meaning of Rule 16(b)-3
promulgated by the Securities Exchange Commission under the Securities and

 

2

 

Exchange Act of 1934, as amended, 
and, if necessary for any Options to qualify for any tax or other
material benefit to Optionees under applicable regulations under Section 162(m)
of the Code, each shall be an “outside director” (as defined in applicable
regulations).  The Committee shall be
appointed by, and serve at the pleasure of, the Board.

 

(b)                                  Authority.  Subject to the specific limitations and
restrictions set forth in the Plan, the Committee shall have the authority: (i)
to grant ISOs to employees who the Committee determines are key to the success
of MedQuest (“Key Employees”); (ii) to grant NQSOs to such employees as the
Committee shall select (the grantee of an ISO or NQSO is hereinafter referred
to as an “Optionee”); (iii) to make all determinations necessary or desirable
for the administration of the Plan including, within any applicable limits
specifically set out in the Plan, the number of Shares that may be subject to
Options, the Option Price, and the period during which an Optionee must remain
an employee of Medquest prior to the exercise of an Option; (iv) to construe
the terms of the Option Agreements and the Plan; (v) to prescribe, amend and
rescind rules and regulations relating to the Plan; (vi) to determine the terms
and provisions of the Option Agreements, which need not be the same, (vii) to
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Option Agreement in any manner that the Committee deems necessary
or desirable; (viii) to amend the terms of any Option, subject to the
provisions of the Plan; (ix) to grant to Optionees in exchange for their
surrender of Options, new Options containing such other terms and conditions as
the Committee shall determine; and (x) to make other determinations in the
judgment of the Committee necessary or appropriate for the administration of
the Plan.  Any interpretation or
decision of the Committee shall be final and conclusive.  Nothing in this Section 4(b) shall give the Committee
the right to increase the Total Authorized Shares or the Pre-Conversion Total
Authorized Shares (except as provided in Section 10 below), to extend the term
of the Plan, or

 

3

 

to extend the period during which any ISO may be exercised beyond ten
years from the Grant Date.

 

(c)                                  Liability/Protection.  No member of the Committee shall be liable
to any person for any action taken or omitted in connection with the
interpretation or administration of the Plan. 
Service as a member of the Committee shall constitute service as a
member of the Board, so that members of the Committee shall be entitled to
indemnification for their service on the Committee to the full extent provided
for service as members of the Board.

 

5.                                      Option
Grants.

 

(a)                                  Option
Agreement.  The Committee shall,
subject to the terms of the Plan,  have
sole authority to determine the employees to whom Options shall be granted
under the Plan and the terms and conditions of such Options.  Each Option granted under the Plan shall be
evidenced by a stock option agreement (each, an “Option Agreement”).  Each Option Agreement shall be subject to
the terms and conditions of the Plan and may contain additional terms and
conditions (which may vary from Optionee to Optionee) not inconsistent with the
Plan, as the Committee may deem necessary or desirable.   Unless the Committee determines otherwise
at the time of any grant, each Option Agreement shall be in substantially the
form attached hereto as Exhibit A.

 

(b)                                  Option
Price.  The price at which a
Share may be purchased upon exercise of an Option (the “Option Price”) shall be
determined by the Committee at the time the Option is granted, and shall be
specified in the applicable Option Agreement. 
The Option Price shall not be less than (i) in the case of an ISO
granted to a Key Employee who, at the time of the grant, is not a Ten Percent
Shareholder, as defined below, one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted (the “Grant Date”); (ii) in
the case of an ISO granted to a Key Employee who, at the time of grant, owns
stock representing more than ten

 

4

 

percent of the total combined voting power of all classes of stock of
the Company or of any subsidiary (a “Ten Percent Shareholder”), one hundred and
ten percent (110%) of the Fair Market Value on the Grant Date; or (iii) in the
case of a NQSO, the price determined by the Committee.  Unless the Committee determines otherwise at
the time of an Option is granted and except as otherwise required under clause
(ii) of this Section 5(b) above, the Option Price shall be the Fair Market
Value of a Share on the Grant Date. 
“Fair Market Value” means, as of any date, the fair market value of a
Share as determined by the Committee in accordance with any reasonable method
of valuation consistent with applicable requirements of the Internal Revenue
Code of 1986, as amended (the “Code”), including, as applicable, the provisions
of Section 422(c)(8) of the Code.  The
Option Price shall be subject to adjustment in accordance with Section 10
hereof and shall be paid in cash, by certified or bank check, in Shares of
Stock that have been held by the Optionee for at least six (6) months prior to
the date of exercise or for such other period as the Committee may determine,
or in such other form of payment as the Committee, in its discretion may allow,
to the extent consistent with any applicable requirements of the Code.  After the Registration Date, the Company
will make available a procedure for, and will permit, broker assisted
“cashless” exercise of Options to the extent permitted by applicable law.  As used herein, the term “Registration Date”
means the first day on which an offering of any Share of Stock is registered
for sale to the public under the Securities Act of 1933, as amended.

 

(c)                                  Number
of Shares.  Each Option
Agreement shall specify the number of Shares subject thereto.

 

(d)                                  Option
Term.  The Committee shall
determine the term of each Option (the “Option Term”); provided that no Option
Term shall extend for a period continuing beyond ten (10) years from the Grant
Date.

 

5

 

6.                                      Exercise
of Options.

 

Subject to applicable law and the terms and conditions
of the Plan, an Option granted under the Plan shall be exercisable at such
time, or times, upon the occurrence of such event or events, for such period or
periods, in such amount or amounts, and upon the satisfaction of such terms and
conditions including, without limitation, terms and conditions relating to
notice of exercise, the date the Option is deemed exercised, delivery and
transferability of Shares and withholding of taxes, as the Committee shall may
specify in the Option Agreement.  It is
understood that if any Option or Options that are intended to be treated as
ISOs become exercisable by any single Optionee for the first time during any
calendar year with respect to Option Shares the aggregate Fair Market Value (as
determined on the Grant Date) of the which exceeds One Hundred Thousand Dollars
($100,000), under current tax law ISO treatment may be available only with
respect to that portion of the Option or Options that relates to the number of
Option Shares having an aggregate Fair Market Value that does not exceed One
Hundred Thousand Dollars (as determined on the Grant Date), and the excess
portion of the Option or Options shall
instead be treated as an NQO or NQOs.

 

7.                                      Expiration
of Options.

 

Any unexercised Options shall automatically and
without notice expire upon the first to occur of the following:

 

(a)                                  the
tenth anniversary of the Grant Date, or such earlier date as may be specified
in the applicable Option Agreement; or

 

(b)                                  upon
termination of the Optionee’s employment with MedQuest, except to the extent
otherwise specified in the applicable Option Agreement or as determined by the
Committee.  Notwithstanding anything to
the contrary herein or in any Option Agreement, in no event shall any ISO be
exercisable after (x) in the case of any ISO granted to a Ten Percent

 

6

 

Stockholder, the fifth anniversary of the Grant Date and (y) in the
case of any other ISO, the tenth anniversary of the Grant Date.

 

8.                                      Non-Transferability
of Options.

 

(a)                                  Except
as otherwise provided in any applicable Option Agreement, no Option granted
under the Plan shall be transferable by any Optionee other than by will or the
laws of descent or distribution.  Except
as otherwise provided in any applicable Option Agreement, during the lifetime
of an Optionee, an Option shall be exercisable only by the Optionee.  Except as otherwise determined by the
Committee, any attempt to transfer, assign, pledge, hypothecate, or otherwise
dispose of, or to subject to execution, attachment or similar process, any
Option other than as permitted above or in the applicable Option Agreement
shall be null and void and of no effect, and shall result in termination of the
Option and forfeiture of all rights with respect thereto.

 

(b)                                  The
Company may require that any Optionee, as a condition to exercise of any
Option, give written assurances in substance and form satisfactory to the
Company to the effect that he or she is acquiring the Stock subject to the
Option for his or her own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply with
applicable Federal and state securities laws.

 

(c)                                  Notwithstanding
anything to the contrary in the Plan or in any Option Agreement,  no Option may be exercised and no Shares or
certificates representing Shares shall be issued if, in the judgment of the
Committee, such exercise or issuance would constitute a violation of any state
or Federal law or the rules or regulations of any governmental regulatory body
or any securities exchange.  If, at any
time, counsel to the Company determines that the Shares must be listed,
registered or otherwise qualified on any securities exchange or under any

 

7

 

state or Federal law, or that the consent or approval of any
governmental or regulatory body is necessary as a condition of, or in
connection with the issuance or purchase of Shares pursuant to any Option, the
Option may not be exercised, in whole or in part, unless and until all required
listings, registrations, qualifications, consents and approvals have been
effected or obtained on conditions acceptable to the Board.  Nothing herein shall be deemed to require
the Company to apply for or to obtain any such listing, registration,
qualification, consent or approval.

 

9.                                      No
Special Rights.

 

No Optionee shall have any voting or other rights as a
stockholder of the Company with respect to any Shares covered by an Option
until exercise of the Option and issuance of a certificate or certificates to
the Optionee for such Shares.  Nothing
herein or in any Option Agreement shall confer on any Optionee any right to
continued employment with MedQuest or interfere in any way with the rights of
MedQuest to terminate such employment at any time.

 

10.                               Adjustments
for Change in Capital Structure and Special Transactions.

 

(a)                                  Recapitalization,
etc.  In the event of a stock
dividend, stock split or recapitalization or a corporate reorganization in
which the Company is a surviving corporation, including without limitation a
merger, consolidation, split-up or spin-off or a liquidation or
distribution of securities or assets other than cash dividends (a
“Restructuring Event”), the number or kinds of Shares subject to the Plan or to
any Option previously granted, and the Option Price, shall be adjusted by the
Committee as it reasonably determines is consistent with the purposes of the Plan
to reflect such Restructuring Event.

 

(b)                                  Special
Transactions.  In the event of a
merger, consolidation or other form of reorganization of the Company with or
into another corporation (other than a merger, consolidation or other form of
reorganization in which the Company is the surviving

 

8

 

corporation), a sale or transfer of all or substantially all of the
assets of the Company or a tender or exchange offer made by any corporation,
person or entity, other than an offer made by the Company (a “Special
Transaction”), the Committee, either before or after the merger, consolidation
or other form of reorganization, may take such action as it reasonably
determines is consistent with the purposes of the Plan with respect to the
number or kinds of Shares subject to the Plan or any Option under the
Plan.  Such action by the Committee may
include (but shall not be limited to) the following:

 

(i)                                    accelerating
the full exercisability of an Option during such period as the Committee shall
prescribe following the public announcement of such Special Transaction;

 

(ii)                                cancelling
the portion of any Option that has not become exercisable and is not scheduled
to become exercisable prior to the date the Special Transaction;

 

(iii)                            permitting any Optionee, at
his or her election and within any time period as the Committee may prescribe,
to surrender Options (or any portion thereof) in exchange for  cash payment in an amount and in a manner
determined by the Committee; or

 

(iv)  requiring any Optionee, at any time
prescribed by the Committee, to surrender Options (or any portion thereof) (A)
in exchange for cash payment as described in clause (iii) above, provided in
such case, that cash payment shall be in an amount per Option equal to the
difference between the Option Price and the Fair Market Value as of the date of
surrender or such other amount as the Committee may determine, or (B) in
exchange for and, if necessary, subject to shareholder approval of a substitute
Option or other award issued by the corporation surviving such Special
Transaction or acquiring the Company’s assets, which the Committee, in the good
faith

 

9

 

exercise of its business judgment, determines to have
a value substantially equivalent to the value of the Options surrendered.

 

11.                               Top-Off
Option Grants Upon Conversion of Preferred Equity.

 

Upon conversion of any of the Company’s Preferred
Stock into Common Stock pursuant to the Company’s Certificate of Incorporation,
as amended and restated and in effect from time to time (“Conversion”), each
Covered Optionee (defined below) shall be granted an additional Option (a
“Top-Off Option”) with respect to that number of Option Shares that, when
combined with the total number of Option Shares covered by Options previously
granted to such Covered Optionee, shall bear the same proportion to the total
number of Shares of Common Stock outstanding immediately after Conversion as
the number of Option Shares covered by all Options previously granted to such
Covered Optionee bears to the number of Shares of Common Stock Outstanding
immediately prior to Conversion.  Each
Top-Off Option (i) shall have an Option Price equal to the Fair Market Value of
the Option Shares on the date of grant of the Top-Off Option, (ii) shall have
an Option Term expiring on the expiration date of the Original Option (defined
below), (iii) shall be exercisable at any time to the same extent that the
Original Option is exercisable, and (iv) shall otherwise have the same terms
and conditions as the first Option granted to such Covered Optionee under the
Plan (the “Original Option”).  For
Example, if an Optionee were granted an Option in the form attached to this
Plan as Exhibit A with respect to 100 Option Shares on January 1, 2003 when
1,000,000 Shares of the Common Stock were outstanding and on January 1, 2005
Preferred Stock of the Company were converted into 100,000 Shares of Common
Stock such that 1,100,000 Shares of Common Stock were then outstanding, then on
January 1, 2005, such Optionee would receive a Top-Off Option having an
exercise price equal to the Fair Market Value of the Common Stock on January 1,
2005 with respect to 10 Option Shares, and the Top-Off Option (i) would be
exercisable with respect to

 

10

 

2/5ths of the Option Shares on January 1, 2005, (ii) would
be scheduled to become exercisable with respect to all Option Shares on the
January 1, 2008,  and (iii) would be
scheduled to expire immediately prior to January 1, 2013.  As used herein, the term “Covered Optionee”
means any Optionee whose Option Agreement expressly states that the Optionee
shall be a Covered Optionee under this Section 11.

 

12.                               Amendment.
Suspension or Termination of the Plan.

 

The Committee may, at any
time, amend, suspend or terminate the Plan or any part thereof, including
without limitation, any and all parts the Option granted under the Plan, in
such manner as the Committee deems necessary or desirable; provided that no
such action may be taken which would impair the rights of any Optionee with
respect to any Option previously granted under the Plan without the Optionee’s
consent.

 

13.                               Stockholders
Agreement.

 

Unless otherwise determined by the Committee, on or
before the date any Optionee will exercise any Option under the Plan, he or she
shall become a party to the MQ Associates, Inc. Employee Stockholders
Agreement, a copy of which is attached hereto as Exhibit B (as amended,
the “Stockholders Agreement”), which Stockholders Agreement provides, among
other things, for certain restrictions on the transfer of Shares acquired
pursuant to any Option granted under the Plan (“Option Shares”).

 

14.                               Governing
Law.

 

The Plan shall be governed by the laws of the State of
Delaware without regard to its conflict of laws principles.  In case any one or more of the provisions
contained herein are for any reason deemed to be invalid, illegal or
unenforceable in any respect by a judicial body having jurisdiction, such
illegality, invalidity or unenforceability shall not effect any other

 

11

 

provision of this Plan, and this Plan shall be construed as if such
invalid, unenforceable or illegal provision had never been contained herein.

 

15.                               References.

 

References in the Plan to Optionee shall be deemed,
where appropriate, to refer to the beneficiary or legal representative of any
Optionee who dies or is determined to be physically or mentally incompetent.

 

	
  MQ
  ASSOCIATES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Effective Date: January 1, 2003

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]