EXHIBIT 5.4
STRADLING YOCCA CARLSON & RAUTH
SANTA BARBARA OFFICE A PROFESSIONAL CORPORATION SAN FRANCISCO OFFICE
302 OLIVE STREET ATTORNEYS AT LAW 44 MONTGOMERY STREET, SUITE 4200
SANTA BARBARA, CALIFORNIA 93101 660 NEWPORT CENTER DRIVE, SUITE 1600 SAN FRANCISCO, CALIFORNIA 94104
TELEPHONE (805) 564-0065 NEWPORT BEACH, CA 92660-6422 TELEPHONE (415) 283-2240
FACSIMILE (805) 564-1044 TELEPHONE (949) 725-4000 FACSIMILE (415) 283-2255
FACSIMILE (949) 725-4100
February 13, 2003
MedQuest, Inc.
2400 North Point Parkway
Alpharetta, Georgia 30022
O'Melveny & Myers LLP
30 Rockefeller Plaza
New York, New York 10112
Re: REGISTRATION OF SECURITIES OF MEDQUEST, INC.
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Ladies and Gentlemen:
Reference is made to the Registration Statement (the "Registration
Statement") on Form S-4 (File No. 333-101399) of MedQuest, Inc., a Delaware
corporation (the "Company"), in connection with the Company's offer (the
"Exchange Offer") to exchange up to $180,000,000 principal amount of the
Company's 11 7/8% Senior Subordinated Notes due 2012 that have been registered
under the Securities Act of 1933 (the "New Notes"), which New Notes will be
guaranteed (the "Guarantee") by, among others, Grove Diagnostic Imaging Center,
Inc., a California corporation (the "California Guarantor"), for a like
principal amount of the Company's outstanding 11 7/8% Senior Subordinated Notes
due 2012 (the "Old Notes"), which Old Notes have also been guaranteed by the
California Guarantor.
In connection with the preparation of this opinion, we have also examined
the Indenture dated as of August 15, 2002, as supplemented (the "Indenture"),
among the Company, MQ Associates, Inc., as guarantor, the Subsidiary Guarantors
parties thereto and Wachovia Bank, National Association, as Trustee. The
Indenture and the Guarantee shall hereinafter from time to time be referred to
collectively as the "Exchange Note Documents."
In addition, we have examined such other documents and considered such
questions of law as we have deemed necessary or appropriate. We have assumed
that there are no other documents or agreements between the Company and the
California Guarantor which would expand or otherwise modify the respective
rights and obligations of the Company and California Guarantor as set forth in
the Exchange Note Documents and the documents required or contemplated thereby.
February 13, 2003
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We have assumed the authenticity of all documents submitted to us as
originals, the conformity with originals of all documents submitted to us as
copies, and the genuineness of all signatures. We have also assumed that, with
respect to all parties to agreements or instruments relevant hereto (other than
the California Guarantor), such parties had the requisite power and authority to
execute, deliver and perform such agreements or instruments, that such
agreements or instruments have been duly authorized by all requisite action,
executed and delivered by such parties, and that such agreements or instruments
are the valid, binding and enforceable obligations of such parties.
Based upon the foregoing, and subject to the additional assumptions,
exceptions, qualifications and limitations set forth below, we are of the
opinion that when the New Notes have been duly executed, authenticated and
delivered in accordance with the Indenture, in exchange for the Old Notes in
accordance with the Indenture and the Exchange Offer, the Guarantee of the
California Guarantor will be the legally valid and binding obligation of the
California Guarantor, except as the enforceability thereof may be subject to or
limited by (a) bankruptcy, insolvency, reorganization, arrangement, moratorium,
or other similar laws relating to or affecting the rights of creditors, and (b)
general equitable principles, regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law.
We call your attention to the fact that the Exchange Note Documents state
that they are governed by New York law and that we are not rendering any opinion
with respect to New York law. We have not examined the question of what law
would govern the interpretation or enforcement of the Exchange Note Documents
and our opinion is based on the assumption that the internal laws of the State
of California would govern the provisions of the Exchange Note Documents and the
transactions contemplated thereby.
We express no opinion with respect to:
(a) the unenforceability under certain circumstances of provisions to the
effect that failure to exercise or delay in exercising any right or remedy will
not operate as a waiver of that right or remedy;
(b) the effect of California Civil Code Section 1670.5 which provides that
a court may refuse to enforce, or may limit the application of, a contract or
any clause thereof which the court finds as a matter of law to have been
unconscionable at the time it was made;
(c) the effect of Sections 2787 through 2855 of the California Civil Code
which provide protections for and limitations on the obligations of a guarantor
such as, but not limited to, limitations that provide (i) in certain
circumstances that a notice be given to the guarantor of any default by the
debtor or obligor which may result in liability to the guarantor; (ii) that the
obligations of a guarantor cannot be greater in amount or more burdensome than
that of the obligor; (iii) that the guarantor will have the same defenses to
liability as the obligor, other than defenses arising from the personal
disability of the obligor; (iv) that a guarantor will be exonerated from
liability, by any act of the creditor taken without the guarantor's consent,
which alters the original obligations of the obligor
February 13, 2003
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or impairs or suspends any remedies or rights of the creditor against the
obligor or security for the guaranteed obligation; (v) that the creditor's
acceptance of anything in partial satisfaction of the guaranteed obligation also
reduces the obligation of the guarantor to the same extent; and (vi) that a
guarantor may require the creditor to proceed against the obligor or security
held by the creditor or to pursue other remedies within the power of the
creditor which cannot be pursued by the guarantor before proceeding against the
guarantor;
(d) the effect of Section 1698 of the California Civil Code which provides
in part that provisions of any instrument or agreement may only be waived in
writing will not be enforced to the extent that an oral agreement has been
executed modifying provisions of such instrument or agreement;
(e) the enforceability of the choice of law provisions of the Exchange
Note Documents; and
(f) the effect of the Trust Indenture Act upon the legality, validity,
binding effect or enforceability of any Exchange Note Documents.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section
7 of the Securities Act of 1933 or the rules and regulations promulgated
thereunder.
Very truly yours,
STRADLING YOCCA CARLSON & RAUTH
/s/ STRADLING YOCCA CARLSON & RAUTH