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EXHIBIT 10.12
AGREEMENT OF COMPROMISE AND SETTLEMENT
This AGREEMENT OF COMPROMISE AND SETTLEMENT dated as of March 19, 1996
(this "Settlement Agreement") is entered into by and among Medical Imaging
Centers of America, Inc., a California corporation ("MICA"), Keith R. Burnett,
Robert S. Muehlberg, Denise L. Sunseri and Robert G. Ricci, on the one hand, and
Warren G. Lichtenstein, Lawrence Butler, Jack L. Howard, Steel Partners II,
L.P., a Delaware limited partnership ("Steel"), Steel Partners, L.L.C., a
Delaware limited liability company, and Steel Partners Services, Ltd., a New
York corporation (collectively, the "Steel Parties"), on the other hand. MICA
and the Steel Parties are sometimes collectively referred to herein as the
"Parties."
WHEREAS, the Parties understand that the results of the election
conducted at the February 26, 1996 Special Meeting of shareholders will be
subject to immediate challenge by the Party that did not prevail and might never
be accepted as valid by such Party;
WHEREAS, contemporaneously with the execution of this Agreement, MICA
is entering into a Standstill Agreement with Arrowhead; and
WHEREAS, MICA has determined that the agreements set forth herein are
in the best interests of MICA and its shareholders.
FOR AND IN CONSIDERATION of the mutual covenants contained herein, the
parties, intending to be legally bound hereby, agree as follows:
1. Certain Defined Terms. As used in this Settlement Agreement, the
following terms (whether or not capitalized) shall have the following meanings:
"Action" means Medical Imaging Centers of America, Inc. v.
Lichtenstein, et al., Case No. 96-0039B (AJB) filed in the United States
District Court for the Southern District of California.
"Auction Period" means the period commencing with the date hereof and
ending with the earlier to occur of (i) in the event that MICA has not made a
public announcement stating that an agreement has been reached with respect to
an Auction Transaction prior to June 19, 1996 (the third monthly anniversary of
the date hereof), the close of business on such date, (the date of such public
announcement shall be referred to herein as the "Announcement Date"), (ii) in
the event a definitive agreement (the "Definitive Agreement") relating to an
Auction Transaction is not entered into prior to the earlier to occur of (A) 30
days after the Announcement Date and (B) July 19, 1996 (the fourth monthly
anniversary of the date hereof) (the earlier of such dates, the "Definitive
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Agreement Date"), the close of business on the Definitive Agreement Date, (iii)
in the event an Auction Transaction is not consummated prior to the close of
business on the Consummation Date, the close of business on the Consummation
Date and (iv) the effective date, if any, of the resignation of Mr. Robert S.
Muehlberg from the Board or as an employee or officer of MICA.
"Auction Process" means the auction process described in Section 5 of
this Settlement Agreement.
"Auction Transaction" means a Sale Transaction recommended by the Board
pursuant to the Auction Process.
"Arrowhead" means Arrowhead Holdings Corporation, a Delaware
corporation.
"Board" means the Board of Directors of MICA.
"Common Stock" means the common stock, no par value, of MICA.
"Consummation Date" means November 19, 1996 (the eighth monthly
anniversary of the date hereof), provided that if on such date, the parties to
an Auction Transaction are working in good faith to complete an Auction
Transaction but are unable to do so as a result of any undue delay resulting
from any governmental regulatory process which is required as a condition to
consummate the Auction Transaction, the Consummation Date shall be extended
until the ninth monthly anniversary of the date hereof.
"Effective Date" means March 19, 1996.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financial Advisor" means Batchelder & Partners, Inc.
"MICA Securities" means any securities issued by MICA or any of its
direct or indirect subsidiaries, including the Common Stock and any other debt
or equity securities of MICA or any of its direct or indirect subsidiaries that
are outstanding as of the date hereof or may hereafter be issued.
"Person" means any individual, corporation, association, general or
limited partnership, limited liability company, limited liability partnership,
joint venture, trust, estate, other entity or organization or group.
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"Rights Plan Action" means Steel Partners II, L.P. v. Medical Imaging
Centers of America, Inc., Case No. 96-0274B (AJB), filed in the United States
District Court for the Southern District of California.
"Sale Transaction" means any transaction, whether by tender offer,
merger or otherwise, and whether for cash or securities of the other party to
the Sale Transaction, pursuant to which MICA will be sold, merged or combined
with another entity if as a result thereof the shareholders of MICA immediately
prior to such transaction would, after the consummation of the Sale Transaction,
own less than 50% of the equity of the merged or combined entity on a fully
diluted basis, or any comparable or similar type transaction which would not
constitute an "ownership change" with the meaning of Section 382 of the Internal
Revenue Code of 1986, as amended.
"Schedule 13D" means the Schedule 13D filed with the SEC on or about
March 18, 1995 by the Steel Parties, as amended through Amendment No. 14.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Solicitation Action" means any of the following: (i) giving notice
pursuant to MICA's By-Laws of an intention to nominate directors, or cause the
taking of any other action by MICA, at a meeting of shareholders or by consent;
(ii) filing with the SEC any proxy or consent solicitation materials (whether
preliminary, definitive or as described in Rule 14a-11 or 14a-12 under the
Exchange Act) with respect to such meeting or consent; (iii) mailing or
otherwise disseminating to shareholders any such solicitation materials; (iv)
otherwise engaging in a solicitation of proxies or consents with respect to such
meeting or consent; (v) nominating at such meeting candidates for election as
directors; (vi) engaging in or taking any of the other actions set forth in
Section 6(c) hereof; or (vii) casting votes or ballots at such meeting or by
consent pursuant to proxies or consents so solicited (but the term "Solicitation
Action" shall not include the casting of votes or ballots by the Steel Parties
with respect to shares of Common Stock beneficially owned by them so long as the
Steel Parties have not engaged in or taken any of the actions specified in
clauses (i) through (vi) above).
"Standstill Period" means the period commencing with the date hereof
and ending with the later to occur of (i) the end of the Auction Period and (ii)
the date on which the current members of the Board resign from their position as
members of the Board pursuant to section 5(e) of this Settlement Agreement and
are replaced with designees of the Steel Parties.
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"Transaction" means any business combination involving MICA, including
without limitation an acquisition, merger, spin-off, spin-out, consolidation,
tender offer, share exchange or exchange offer.
"Voting Securities" means any capital stock of MICA having the right to
vote in the election of directors, plus convertible securities, options,
warrants or rights that may be converted, exchanged or exercised to acquire such
stock; and excludes preferred stock having no voting rights in the election of
directors other than a normal and customary right to elect a specified number of
directors in the event of a default in the payment of interest.
The terms "participant," "proxy" and "solicitation" shall be used as
defined in Regulation 14A under the Exchange Act (whether or not the pertinent
securities are subject to Regulation 14A). The terms "beneficial ownership" and
"group" shall be used as defined in Regulation 13D-G under the Exchange Act. The
terms "affiliate" and "associate" shall be used as defined in Rule 12b-2 under
the Exchange Act.
2. Representations and Warranties of the Steel Parties . Each Steel
Party severally and not jointly, represents and warrants to MICA as follows:
(a) Such Steel Party has the requisite legal power and authority to
execute, deliver and carry out this Settlement Agreement and has taken all
necessary legal action to authorize the execution, delivery and performance of
this Settlement Agreement and the transactions contemplated hereby.
(b) This Settlement Agreement has been duly and validly authorized,
executed and delivered by such Steel Party and constitutes its valid and binding
obligation, enforceable against such Steel Party in accordance with its terms.
(c) Neither such Steel Party nor any of its affiliates beneficially
owns, or has any direct, indirect or contingent pecuniary interest in, any MICA
Securities other than as disclosed in the Schedule 13D.
(d) Neither such Steel Party nor any of its affiliates is a member of
any group with respect to MICA Securities and there are no other persons who are
part of such a group with it or any of its affiliates except (i) as disclosed in
the Schedule 13D, (ii) MICA has alleged in the Action (that the Steel Parties
and certain other persons and entities are part of such a group, which
allegations are denied by the Steel Parties) and (iii) to the extent the Steel
Parties may be a group with Arrowhead.
3. Representations and Warranties of MICA . MICA represents and
warrants to the Steel Parties as follows:
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(a) MICA is duly organized and validly existing and in good standing
under the laws of the State of California, has the requisite corporate power and
authority to execute, deliver and carry out this Settlement Agreement and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Settlement Agreement and the transactions contemplated
hereby.
(b) This Settlement Agreement has been duly and validly authorized,
executed and delivered by MICA and constitutes its valid and binding obligation,
enforceable against MICA in accordance with its terms.
(c) Except with respect to the issuance and/or exercise of stock
options pursuant to existing stock option plans and/or outstanding options and
an amendment to the By-laws of MICA in the form attached hereto as Exhibit E,
neither the employment agreement of each of Robert Muehlberg and Denise Sunseri,
the By-laws of the Company, the number or terms of the options or shares granted
to the employees of the Company or the members of the Board, nor the number of
outstanding shares of Common Stock, have in any material way been amended,
altered or increased, as the case may be, since the last public disclosure of
such terms, provisions or number of outstanding options or shares of Common
Stock.
(d) MICA is not, and will not be, required pursuant to its agreement
with the Financial Advisor to utilize the services of the Financial Advisor
after the replacement of the Board pursuant to Section 5(e) and, to pay any fees
to the Financial Advisor with respect to transactions entered into subsequent to
the replacement of the Board pursuant to Section 5(e).
4. Treatment of the Election . The Parties agree that the February 26,
1996 Special Meeting of Shareholders will be adjourned without MICA's receiving
a final report from the Inspector of Election certifying the results of voting
by shareholders on proposals by the Steel Parties to remove the current
directors of MICA and replace them with nominees designated by the Steel Parties
and without any further actions at such meeting.
5. Auction Process and Procedures; Board Transition . (a) Each of the
parties hereto agree that, as soon as practicable after the date hereof, MICA
will announce the initiation of, and initiate, an auction process (the "Auction
Process") for the purpose of engaging in an Auction Transaction with the goal of
obtaining maximum value for the shareholders of MICA, as determined in good
faith by the Board after receiving a customary fairness opinion from the
Financial Advisor. MICA will keep the Steel Parties fully informed as to the
status of the Auction Process and will consider in good faith any suggestions of
the Steel Parties in connection with the Auction Process; provided, however,
that MICA shall not be required to disclose information to the Steel Parties
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regarding the Auction Process to the extent, in the reasonable opinion of legal
counsel to the Board, the disclosure of such information to the Steel Parties
would compromise the integrity of the Auction Process. The Steel Parties will be
invited to participate as a bidder in the Auction Process, including as part of
a group with Arrowhead, on the same terms and conditions, including, terms and
conditions relating to due diligence and discussions and contacts with financing
sources, permitted for other bidders, and, except as specified in paragraph (d)
of this Section 5, the Steel Parties shall not, and shall cause their affiliates
and associates not to, interfere with the Auction Process.
(b) MICA agrees, that except with respect to conducting the Auction
Process, the consummation of an Auction Transaction pursuant to the Auction
Process and actions directly in furtherance of the Auction Process and the
consummation of an Auction Transaction, during the Standstill Period, the
business and operations of MICA will be run in the ordinary course of business
consistent with past practice and, without the prior written consent of Steel,
MICA will not:
(i) amend its Articles of Incorporation or By-Laws;
(ii) other than pursuant to the terms of presently outstanding
options, rights, warrants or convertible securities in accordance with
their respective terms and pursuant to any existing option plans, in
accordance with past practice, issue, pledge or sell, or authorize the
issuance, pledge or sale of additional shares of capital stock or other
securities of any class or series, including, without limitation,
securities exchangeable for or convertible into capital stock of any
class or series, or any calls, commitments, rights, warrants or options
to acquire any securities or capital stock;
(iii) split, combine, subdivide, reclassify or redeem,
purchase or otherwise acquire, or propose to redeem or purchase or
otherwise acquire, directly and indirectly, any shares of its capital
stock, or any of its other securities or declare and pay any dividends
on its capital stock;
(iv) except as specified in Section 7(b), increase the
compensation or benefits payable or to become payable to its directors,
officers or employees, or pay any benefit not required by any existing
plan or arrangement or grant any severance or termination pay to
(except pursuant to existing agreements or policies), or enter into or
amend any employment, consulting or severance or other agreement with,
any director, officer or other employee of MICA's;
(v) acquire, sell, lease or dispose of any assets which are
material to MICA, or enter into any commitment to do any of the
foregoing or enter into any material commitment or transaction;
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(vi) except with respect to the purchase of the general
partnership interest in the Long Beach imaging center, acquire or agree
to acquire by merging or consolidating with, or by purchasing a
substantial portion of the stock or assets of, or by any other manner,
any business or any corporation, partnership, joint venture,
association or other business organization or division thereof;
(vii) appoint any new director to the Board, unless such
director agrees to be bound by the terms of this Settlement Agreement;
and
(viii) authorize or agree in writing or otherwise to take any
of the foregoing actions.
(c) Other than an Auction Transaction in the form of a tender offer for
100% of all outstanding Common Stock, the consummation of any Auction
Transaction will be subject to the Auction Transaction being duly approved by
the shareholders of MICA at a special meeting called for the purpose of
submitting the proposed Auction Transaction to a vote of the shareholders of
MICA (the "Shareholder Vote").
(d) The provisions of Section 6 of this Settlement Agreement,
including, without limitation, Section 6(c), shall be applicable to the
Shareholder Vote; provided, however; that this Agreement shall not limit the
manner in which the Steel Parties may vote with respect to the Shareholder Vote
and if requested by Steel, Steel shall be entitled to include in the proxy
distributed by MICA to its shareholders in connection with the Shareholder Vote,
a statement of reasonable length specifying its opinion on the merits of the
Auction Transaction;
(e) In the event an Auction Transaction is not consummated on or prior
to the end of the Auction Period, then, in the event that on the last day of the
Auction Period the Steel Parties are the beneficial owner of at least 263,841
shares of Common Stock, (i) subject to the satisfaction of the requirements
under Rule 14f-1 of the Exchange Act, which MICA and the Steel Parties will use
all reasonable efforts to satisfy as soon as practicable, the Persons who are
members of the Board at such time will resign and will cause such members to be
replaced with designees of the Steel Parties (resulting in the Board being
composed solely of designees of the Steel Parties) and (ii) if requested by the
Steel Parties, MICA will promptly call the annual meeting of shareholders, to be
scheduled as soon as practicable but in no case later than 45 days after the end
of the Auction Period, for the purpose of electing the Board of Directors of
MICA.
(f) The Steel Parties will support and take all reasonable efforts in
good faith to cooperate with MICA and the Board in connection with the Auction
Process, and the Steel Parties acknowledge their respective intent to vote in
favor of an Auction Transaction, provided such Auction Transaction, in the sole
judgment of the Steel Parties,
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maximizes shareholder value. In addition, if during the Auction Period any Steel
Party is contacted by any person concerning the Auction Process, the applicable
Steel Party will promptly inform the Board of such contact and, unless otherwise
instructed by the Board, refer any such person to the Board.
6. Restrictions on Purchase and Sale of MICA Securities and Certain
Other Actions . Each of the Steel Parties agrees that it will not, and it will
cause its respective affiliates not to, except as expressly permitted by this
Settlement Agreement, including, without limitation, as specified in Section 5
of this Settlement Agreement, without the prior written consent of MICA, for a
period commencing on the date hereof and ending at the close of business of the
last day of the Auction Period:
(a) (i) acquire, offer to acquire, directly or indirectly, by purchase
or otherwise, beneficial ownership of MICA Securities (or any direct or indirect
rights, options or warrants for any MICA Securities) or (ii) encourage any
Person to acquire, or advise any Person with respect to the acquisition or
proposed acquisition of MICA Securities; provided, however; that this clause
(ii) shall not prohibit Jack Howard from acting in his capacity as a broker and
executing transactions initiated by current or future customers with respect to
MICA Securities so long as Jack Howard does not solicit or otherwise advise the
applicable customer with respect to such trade;
(b) knowingly sell or otherwise convey in a transaction other than an
open market transaction (either singly or collectively) MICA Securities to a
single Person or group which owns more than 5% of the then currently outstanding
MICA Securities or, as a result of such sale will own more than 5% of MICA's
then currently outstanding Securities;
(c) solicit, or encourage any other Person to solicit, or advise any
Person with respect to the solicitation of, proxies or consents with respect to
any MICA Securities, or become a participant or otherwise engage in any
solicitation of proxies or consents (A) with respect to any matter submitted or
to be submitted to the vote of the holders of any MICA Securities at any annual
or special meeting or by written consent, including, without limitation, with
respect to the election of directors of MICA in opposition to the nominees
recommended by the Board or otherwise for the purpose of acquiring control of
the Board or management of MICA, or (B) for the purpose of calling a special
meeting of MICA's shareholders or the holders of any MICA Securities; or advise
or seek to advise any Person with respect to the voting of any MICA Securities;
or submit, or encourage any other Person to submit, or advise or assist any
Person with respect to the submission of, any nominations or proposals to MICA
or to the holders of MICA Securities for consideration by its shareholders or
the holders of any MICA Securities at any annual or special meeting of such
holders or in any action to be taken by written consent pursuant to MICA's
articles of incorporation or bylaws, Rule 14a-8 under
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the Exchange Act, the provisions of any document governing the terms of any such
MICA Securities or governing the rights of the holders thereof, or otherwise;
engage in any Solicitation Action; or otherwise take any action to request a
special meeting of the holders of any MICA Securities;
(d) deposit any MICA Securities in a voting trust or subject them to a
voting agreement or other agreement or arrangement of similar effect or
otherwise join or form a partnership, limited partnership, syndicate or other
group (except insofar as a group consisting solely of Steel Parties and
Arrowhead is alleged to exist by MICA at the date hereof) for the purpose of
acquiring, holding, voting or disposing of any MICA Securities;
(e) engage in, or offer, agree or propose to engage in, any
Transaction; or arrange, or in any way participate, directly or indirectly, in
any financing for any Transaction or for the purchase by any person of any MICA
Securities or any assets of MICA;
(f) otherwise act alone or in concert with others to seek
representation on the Board or to acquire control of MICA or any of its
securities or assets;
(g) request any amendment of any of the terms of this Settlement
Agreement (other than a request to discuss its position with participants in the
Auction Process);
(h) institute, prosecute or pursue against MICA (or any of its
officers, directors, representatives, trustees, employees, attorneys, advisors,
agents, affiliates or associates) (a) any claim with respect to any action
hereafter duly approved by the Board or (b) any claim on behalf of a class of
holders of MICA's Securities;
(i) publicly oppose any duly authorized Board action or recommendation;
and
(j) assist or advise, or enter into any agreement or arrangement to
assist or advise any other person in taking any action referenced in any of
paragraphs (a) through (i) above.
7. Redemption of Rights; Amendments to Certain Severance Packages .
(a) Effective as of the Effective Date, MICA shall redeem all
outstanding rights issued pursuant to the Rights Agreement dated as of October
2, 1991, between MICA and Harris Trust Company of California, as amended (with
the record date for such redemption on the close of business on the date ten
days after the public
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announcement of such redemption) and, until the end of the Standstill Period,
shall not adopt a new shareholder rights plan without the prior written consent
of Steel.
(b) MICA shall promptly amend the severance packages of Mr. Robert S.
Muehlberg and Ms. Denise L. Sunseri to provide that the termination of the
Auction Period without the consummation of an Auction Transaction shall
constitute an "involuntary termination" for the purpose of their respective
severance packages.
8. Reimbursement of Expenses . Simultaneously with the execution of
this Settlement Agreement, MICA shall reimburse the Steel Parties, by wire
transfer to an account specified by the Steel Parties in writing to MICA, for
the expenses incurred by the Steel Parties in connection with their solicitation
of proxies for the February 26, 1996 Special Meeting of Shareholders of MICA,
for which invoices have been provided to MICA, up to the amount of $425,000.
9. Press Release . Upon the effectiveness of this Agreement, MICA shall
issue a press release in the form of Exhibit A hereto. No Party to this
Settlement Agreement nor any of their respective affiliates, associates or
representatives shall issue any other press release or other publicly available
document concerning this Settlement Agreement that is inconsistent with, or is
otherwise contrary to, the statements in such press release. None of the Parties
shall publicly make any negative statements regarding any other Party, the Board
or the Auction Process.
10. Mutual Releases . For and in consideration of the agreements
contained herein, the Parties hereto release one another as follows:
(a) Steel Parties . Each of the Steel Parties, on behalf of itself and
of all its affiliates, successors and assigns ("related parties"), hereby
releases, acquits and forever discharges Dr. Burnett, Dr. Ricci, Mr. Muehlberg,
Ms. Sunseri and MICA, together with its present and former affiliates, officers,
directors, employees, agents, advisors, attorneys, successors and assigns, of
and from any and all claims, causes of action (whether at law or equity),
demands, expenses and damages which such Steel Party or its related parties may
have had, or may now have, or may hereafter have (whether through operation of
law, assignment or subrogation), from the beginning of time to the Effective
Date, real or suspected, known or unknown, actual or contingent, direct or
derivative, including, but not limited to, any such claims, causes of action,
demands, expenses and damages relating to or arising out of the Action or the
Rights Plan Action or any of the matters claimed, asserted or alleged, or that
could have been claimed, asserted or alleged, in the Action or the Rights Plan
Action, excepting only any action, cause of action or suit arising by virtue of
the breach of this Settlement Agreement.
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(b) MICA. MICA, on behalf of itself and all of its affiliates,
successors and assigns ("related parties"), hereby releases, acquits and forever
discharges the Steel Parties, together with their respective present and former
affiliates, officers, directors, employees, agents, attorneys, successors and
assigns, of and from any and all claims, causes of action (whether at law or
equity), demands, expenses and damages which MICA may have had, or may now have,
or may hereafter have (whether through operation of law, assignment or
subrogation), from the beginning of time to the Effective Date, real or
suspected, known or unknown, actual or contingent, direct or derivative,
including but not limited to (i) any such claims, causes of action, demands,
expenses and damages relating to or arising out of the Action or the Rights Plan
Action, (ii) any claim that the Steel Parties have, as of the date hereof,
violated, or are in violation of, the federal securities laws based upon any
alleged non-disclosure concerning the Steel Parties' relationship with a foreign
investment fund or alleged relationship with any existing customer(s) of Jack L.
Howard or Cowles Sabol & Co. or (iii) or any of the matters claimed, asserted or
alleged, or that could have been claimed, asserted or alleged, in the Action or
the Rights Plan Action, excepting only any action, cause of action or suit
arising by virtue of the breach of this Settlement Agreement.
With respect to each of the releases set forth above, each person or
entity granting or receiving such a release (i) agrees that such releases do not
preclude any Party hereto from seeking to enforce any undertaking or promise
contained in this Settlement Agreement or from seeking redress for the breach of
any representation or warranty contained in this Settlement Agreement; (ii)
agrees not to challenge, and shall use its best efforts to cause each of its
affiliates, associates and representatives not to challenge, the validity of any
provisions of this Settlement Agreement; and (iii) expressly waives all rights
and benefits each may have under and by virtue of the terms of Section 1542 of
the California Civil Code, which provides as follows:
A general release does not extend to claims which
the creditor does not know or suspect to exist in
his favor at the time of executing the release,
which if known by him must have materially affected
his settlement with the debtor.
Except as may be otherwise required by law, the Steel Parties will not encourage
or cooperate with plaintiffs in any derivative, class action or shareholder
litigation related to MICA or its directors with respect to any claim released
hereunder. Except as may be otherwise required by law, MICA will not encourage
or cooperate with plaintiffs in any pending or subsequently initiated
derivative, class action or shareholder litigation related to MICA to which any
of the Steel Parties is a party, with respect to any claims released hereunder.
In the event that any part of this Settlement Agreement is temporarily,
preliminarily or permanently enjoined or restrained by a court of competent
jurisdiction, the Parties hereto shall use their reasonable best efforts to
cause any such injunction or
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restraining order to be vacated or dissolved or otherwise declared or determined
to be of no further force or effect.
11. Dismissal . Promptly following the execution of this Settlement
Agreement, a stipulation of dismissal of the Action with prejudice as to all
parties to the Action, in the form attached hereto as Exhibit B, and a
stipulation of dismissal of the Rights Plan Action with prejudice as to all
parties to the Rights Plan Action, in the form attached hereto as Exhibit C,
shall be executed and filed with the United States District Court for the
Southern District of California.
12. Miscellaneous.
(a) No Admission of Liability or Wrongdoing . This Settlement Agreement
and any proceedings taken hereunder are not and shall not in any way be
construed as or deemed to be evidence of (i) any admission or concession on the
part of any Party of the merits or lack of merits of any claim or counterclaim
asserted in the Action or the Rights Plan Action, or (ii) any admission or
concession on the part of any Party of any liability or wrongdoing whatsoever,
which liability and wrongdoing are hereby expressly denied and disclaimed by
each of the Parties.
(b) No Duress, Etc. The Parties agree that this Settlement Agreement is
entered into without duress, in good faith and for sufficient consideration, and
that it is fair, just and reasonable to all Parties.
(c) Full Knowledge, Independent Advice, Etc. This Settlement Agreement
is entered into with full knowledge of any and all rights which the Parties may
have by reason of the pending litigation. All Parties have received or have had
made available to them all financial and other information they or their counsel
considered necessary to make an informed judgment concerning the Settlement
Agreement. Each Party has received independent legal advice, has conducted such
investigation as he or his counsel thought appropriate, and has consulted with
such other independent advisors as each of them and their counsel deemed
appropriate, regarding the Action and the Rights Plan Action, this Settlement
Agreement and their rights and asserted rights in connection therewith. None of
the Parties is relying upon any representations or statements made by any other
Party, or such other Party's employees, agents, representatives or attorneys,
regarding this Settlement Agreement or its preparation except to the extent such
representations are expressly set forth herein.
(d) Reasonable Efforts . All Parties hereto agree to exercise all
reasonable efforts and to take all reasonable steps necessary to effectuate the
settlement set forth in this Settlement Agreement, including, without
limitation, the provisions herein
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relating to the adjournment of the February 26, 1996 Special Meeting without any
final action to remove the current members of the Board being taken.
(e) Successors . This Settlement Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective heirs,
successors and assigns, and upon any corporation or other entity into or with
which any Party hereto may merge, combine or consolidate (provided that the
Party is the survivor in such merger, combination or consolidation).
(f) Governing Law . This Settlement Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California,
without reference to the conflict of laws principles thereof.
(g) Amendment and Waiver . No waiver or amendment of any other
provision hereof shall be effective as against any Party unless such Party
agrees to such amendment or waiver in writing.
(h) Authority . Each person executing this Settlement Agreement
represents that he or it has read and fully understands this Settlement
Agreement and that he or it has the authority to execute this Settlement
Agreement in his individual capacity or in the capacity identified on the
signature page below.
(i) Notices . All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
addresses set forth on Exhibit D (or at such other address for a party as shall
be specified in a notice given in accordance with this paragraph). Each such
notice, request, claim, demand or other communication shall be effective (i) if
given by telecopy transmission, when such transmission to the telecopy number
specified in Exhibit D has been made and the appropriate electronic confirmation
that the entire communication has been received by the recipient equipment has
been received by the sender or (ii) if given by any other means, when actually
received at the address specified in this paragraph; provided, in each case,
that a notice given other than during normal business hours or on a day other
than on a business day at the place of receipt shall not be effective until the
opening of business on the next business day at the place of receipt.
(j) Specific Performance . Each of the Parties acknowledges and agrees
that irreparable harm would occur if any provision of this Settlement Agreement
were not performed in accordance with the terms thereof, or were otherwise
breached, and that such harm could not be remedied by an award of money damages.
Accordingly, the
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Parties hereto agree that any non-breaching party shall be entitled to an
injunction to prevent breaches of this Settlement Agreement and to enforce
specifically the terms and provisions hereof. More specifically, each of the
Parties hereto hereby agrees that any action or proceeding brought under or to
enforce any provision of this Settlement Agreement shall be commenced
exclusively in the United States District Court for the Southern District of
California and each Party hereto hereby consents to the personal jurisdiction of
and venue in such United States District Court.
(k) Counterparts . This Settlement Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(l) Effectiveness . This Settlement Agreement shall become effective on
the Effective Date.
(m) Severability . If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
(n) Construction . The headings used herein are for reference only and
shall not affect the construction of this Settlement Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Settlement
Agreement to be executed as of the date first above written.
Medical Imaging Centers of America, Inc.
By: /s/Robert S. Muehlberg
---------------------------------------
Name: Robert S. Muehlberg
Its: Chairman, Chief Executive Officer
and President
/s/Keith R. Burnett, M.D.
------------------------------------------
Keith R. Burnett, M.D.
/s/Robert S. Muehlberg
------------------------------------------
Robert S. Muehlberg
/s/Denise L. Sunseri
------------------------------------------
Denise L. Sunseri
16
/s/Robert G. Ricci, D.O.
---------------------------
Robert G. Ricci, D.O.
/s/Warren G. Lichtenstein
---------------------------
Warren G. Lichtenstein
/s/Lawrence Butler
---------------------------
Lawrence Butler
/s/Jack L. Howard
---------------------------
Jack L. Howard
Steel Partners II, L.P.
By:/s/Warren G.Lichtenstein
------------------------
Name:
Its:
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Steel Partners, L.L.C.
By: /s/Warren G. Lichtenstein
--------------------------
Name:
Its:
Steel Partners Services, Ltd.
By: /s/Warren G. Lichtenstein
--------------------------
Name:
Its: