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EXHIBIT 4.4
FIRST AMENDMENT TO
RIGHTS AGREEMENT
This First Amendment to Rights Agreement (this "Amendment") is
made and entered into as of the 23rd day of January, 1996, by and between
MEDICAL IMAGING CENTERS OF AMERICA, INC., a California corporation (the
"Company"), and HARRIS TRUST COMPANY OF CALIFORNIA (the "Rights Agent").
RECITALS
A. Whereas, the Company and Union Bank entered into a
Rights Agreement (the "Rights Agreement") dated as of October 2, 1991; and
B. Whereas, Harris Trust Company of California has replaced
Union Bank as Rights Agent under the Rights Agreement; and
C. Whereas, Section 27 of the Rights Agreement provides
that, subject to certain conditions not applicable here, the Company may
supplement or amend any provision of the Rights Agreement without the approval
of any holders of Right Certificates representing shares of Common Stock; and
D. Whereas, in October 1995, the Company effected a
one-for-five reserve stock split (the "Reverse Stock Split") which had certain
effects on the Rights Agreement; and
E. Whereas, based on the advice of counsel to the
Company, the Board of Directors of the Company believes that certain changes to
the Rights Agreement, which among other things, provide greater flexibility for
the Company under the Rights Agreement and take into consideration the Reverse
Stock Split, are desirable and in the best interests of the Company and its
shareholders and has authorized certain amendments to the Rights Agreement in
the manner set forth herein;
AGREEMENT
NOW THEREFORE, the Company and the Rights Agent hereby agree
as follows:
1. Amendments. The Rights Agreement is hereby amended
as set forth below.
(a) The first paragraph of Section 11(a)(ii) of
the Rights Agreement is hereby amended to read in its entirety as follows:
"(ii) In the event any Person shall become
an Acquiring Person proper provision shall be made so that
each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement,
such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying
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the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date such
Person became an Acquiring Person (the "Adjustment Shares")."
(b) Section 11(a)(iii) of the Rights Agreement
is hereby amended to read in its entirety as follows:
"(iii) In the event that there shall not be
sufficient Common Shares issued but not outstanding or
authorized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the
Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise
of the Rights; provided, however, that if the Company
determines that it is unable to cause the authorization of a
sufficient number of additional Common Shares, then, in the
event the Rights become exercisable, the Company, with respect
to each Right and to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on
the date hereof to which it is a party, shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value"), over (2)
the Purchase Price (such excess, the "Spread") and (B) with
respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Shares or other equity securities of the
Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board of Directors of the
Company has deemed to have the same value as Common Shares)
(each such share of preferred stock constituting a "Common
Stock Equivalent")), (4) debt securities of the Company, (5)
other assets or (6) any combination of the foregoing having an
aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days
following the first occurrence of the event described in
Section 11(a)(ii) above, then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Common Shares
(to the extent available) and then, if necessary, cash, which
in the aggregate are equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it
is unlikely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights,
the thirty (30) day period set forth above may be extended and
re-extended to the extent necessary, but not more than ninety
(90) days following the first occurrence of the event listed
in Section 11(a)(ii) above, in order that the Company may seek
stockholder approval for the authorization of such additional
shares
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(such period as may be extended, the "Substitution Period").
To the extent that the Company determines that some action
need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide that
such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended as well as a public announcement at
such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of a Common
Share shall be the current per share market price (as
determined pursuant to Section 11(d)) on the date of the first
occurrence of the event listed in Section 11(a)(ii) above and
the value of any Common Stock Equivalent shall be deemed to
have the same value as the Common Shares on such date.
(c) Section 23(b) of the Rights Agreement is
hereby amended to read in its entirety as follows:
"(b) The Board of Directors of the Company may, at
its option, at any time prior to, or within ten (10) days
after a Shares Acquisition Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of
$.05 per Right (after giving effect to the Reverse Stock
Split), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights by the
Board of Directors may be made effective at such time on such
basis and with such conditions as the Board of Directors in
its sole discretion may establish."
(d) Section 24 of the Rights Agreement is hereby
amended to read in its entirety as follows:
"Section 24. Exchange
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Preferred Shares or Common Shares, at the option
of the Board of Directors of the Company, at an exchange ratio
of five one-hundredths of a Preferred Share or one Common
Share per Right (after giving effect to the Reverse Stock
Split), appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of
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this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be
to receive that number of Preferred Shares or Common Shares,
at the option of the Board of Directors of the Company, equal
to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the
Preferred Shares or Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Preferred Shares or Common Shares issued but not outstanding
or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Preferred Shares or Common Shares for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue
fractions of Preferred Shares or Common Shares or to
distribute certificates which evidence fractional Preferred
Shares or Common Shares. In lieu of such fractional Preferred
Shares or Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to
which such fractional Preferred Shares or Common Shares would
otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Preferred
Share or Common Share. For the purposes of this subsection
(e), the current market value of a whole Preferred Share or
Common Share shall be the closing price of a Preferred Share
or Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately
after the public announcement by the Company that an exchange
is to be effected pursuant to this Section 24."
2. No Other Changes. Except as specifically set forth
herein, no change to the Rights Purchase Agreement is intended by the parties
hereto. Except as modified hereby, the parties to the Rights Agreement hereby
reaffirm in all respects all of the covenants, agreements, terms and conditions
set forth in the Rights Agreement, which are incorporated in full herein by
reference, and all terms, conditions and provisions thereof shall remain in full
force and effect, except as amended hereby.
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3. Miscellaneous. The headings and titles of this
Amendment are for convenience only and do not constitute a part hereof. This
Amendment shall be governed by and construed in accordance with the laws of the
State of California. This may be executed in any number of counterparts, any one
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the day and year first above written.
THE COMPANY:
MEDICAL IMAGING CENTERS OF AMERICA, INC.,
a California corporation
By: /s/ Robert S. Muehlberg
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Name: Robert S. Muehlberg
Its: President and Chief Executive
Officer
THE RIGHTS AGENT:
HARRIS TRUST COMPANY OF CALIFORNIA
By: /s/ Michael Goedecke
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Name: Michael Goedecke
Its: Vice President
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