8-K

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      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 19, 1996.

                        SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, D.C. 20549

                                     FORM 8-K

                                  CURRENT REPORT
       PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

          Date of report (Date of earliest event reported): JUNE 18, 1996

                       MEDICAL IMAGING CENTERS OF AMERICA, INC.
                (Exact Name of Registrant as Specified in its Charter)

        CALIFORNIA                      0-12787                 95-3643045
(State or Other Jurisdiction    (Commission File Number)     (I.R.S. Employer
      of Incorporation)                                     Identification No.)

    9444 FARNHAM STREET, SUITE 100
         SAN DIEGO, CALIFORNIA                                      92123
(Address of Principal Executive Offices)                          (Zip Code)

                                 (619) 560-0110
               (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
          (Former Name or Former Address, if Changed Since Last Report)
                                

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        This Current Report on Form 8-K is filed by Medical Imaging Centers of
America, Inc., a California corporation ("MICA"), in connection with the
matters described herein.

ITEM 5.  OTHER EVENTS.

        On June 18, 1996, MICA entered into an agreement in principle (the
"Agreement") with Diagnostic Imaging Services, Inc., a Delaware corporation
("DIS"), pursuant to which MICA will be acquired by DIS in a transaction to be
structured as a cash tender offer for any and all shares of common stock of
MICA, followed by a cash merger of DIS or a wholly-owned subsidiary of DIS with
MICA. The Agreement provides that each share of MICA common stock would receive
$11.50 in cash under either the cash tender offer or the cash merger. The
Agreement is non-binding and is subject to, among other things, the execution
of a definitive agreement, satisfactory completion of due diligence, the
availability of financing sufficient to consummate the transaction and a
fairness opinion from MICA's financial advisor. Following the execution of a
definitive agreement, the acquisition would be further subject to other
customary closing conditions, including approval by the shareholders of MICA
and, if required, of DIS.

        The foregoing summary of the Agreement does not purport to be complete
and is qualified in its entirety by reference to the full text of the
Agreement, which is attached hereto as Exhibit 2.1 and incorporated herein by
reference. 

        On June 18, 1996, MICA issued a press release announcing the execution
of the Agreement, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

        (c)     Exhibits.

        2.1     Agreement in Principle, dated June 18, 1996, between Medical
                Imaging Centers of America, Inc., a California corporation, and
                Diagnostic Imaging Services, Inc., a Delaware corporation.

       99.1     Press Release, dated June 18, 1996, issued by Medical Imaging
                Centers of America, Inc.
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                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:  June 19, 1996                   MEDICAL IMAGING CENTERS OF
                                       AMERICA, INC.


                                       By: /s/ Robert S. Muehlberg
                                          -------------------------------------
                                          Robert S. Muehlberg
                                          President and Chief Executive Officer


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                                 EXHIBIT INDEX


EXHIBIT NO.                                                             PAGE

   2.1          Agreement in Principle, dated June 18, 1996, between      5
                Medical Imaging Centers of America, Inc., a California
                corporation, and Diagnostic Imaging Services, Inc., a
                Delaware corporation.


  99.1          Press Release, dated June 18, 1996, issued by Medical
                Imaging Centers of America, Inc.                          9


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EX-2.1

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                                                                EXHIBIT 2.1

                    MEDICAL IMAGING CENTERS OF AMERICA, INC.
                         9444 Farnham Street, Suite 100
                          San Diego, California 92123


                                 June 18, 1996

Diagnostic Imaging Services, Inc.
1516 Cotner Avenue
Los Angeles, California 90025-3303

Ladies and Gentlemen:

        This agreement in principle is intended to summarize the discussions
relating to the proposed combination between Medical Imaging Centers of
America, Inc. ("MICA") and Diagnostic Imaging Services, Inc., a Delaware
corporation ("Acquiror"). The preliminary understandings expressed in this
agreement are intended to be the subject of further negotiation and then
incorporated into a legally binding definitive agreement (the "Definitive
Agreement") which will contain additional terms and conditions yet to be agreed
upon. Our discussions were as follows:

        1. Structure of Transaction. We anticipate that the Definitive
Agreement will provide for a cash tender offer for any and all shares of common
stock of MICA (with a 50.1% minimum condition), followed by a cash merger of
Acquiror or a wholly-owned subsidiary of Acquiror with MICA, such that Acquiror
will be the surviving corporation.

        2. Consideration. The cash tender offer and the cash merger will
provide that each outstanding share of common stock of MICA (no more than 1/10
of 1% in excess of the number of fully diluted shares outstanding as set forth
in the MICA memo of June 11, 1996, to wit: 2,682,559 shares of common stock,
277,160 shares upon exercise of outstanding stock options and 215,500 shares
upon exercise of outstanding warrants) shall receive $11.50 per share in cash.
Acquiror is providing us, concurrently with this letter, with a letter from your
proposed lender stating its intention to commence its due diligence relating to
such financing. Acquiror acknowledges the additional built-in cost to Acquiror
of the Batchelder & Partners, Inc. "success fee".

        3. Closing Date. It is anticipated that the closing of the proposed
transaction will occur on or prior to September 30, 1996, but in any event no
later than November 19, 1996.

        4. Diligence. Each of MICA and Acquiror acknowledges that the other's
intent to proceed to the Definitive Agreement is subject to its being permitted
to complete a thorough "due diligence" investigation of the other and to its
satisfaction with the results of that investigation. Until the Definitive
Agreement is executed by all parties, each of MICA and Acquiror will cooperate
fully with the other in its investigation and will make available to the other
and to the other's financial and legal advisors all books, records and business
and financial




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information reasonably requested by the other with respect to the subject
matter of this agreement in principle.

        5.  Closing Conditions.  The consummation of the proposed transaction
is subject, among other things to (i) the approval of the respective boards of
directors of MICA and Acquiror and, if required, all shareholders of MICA
and/or Acquiror; (ii) the receipt of all required government and regulatory
approvals, including but not limited to filings under the Hart-Scott-Rodino
Act, if required, and the expiration of all applicable waiting periods; (iii)
the receipt of all material consents from third parties which are required to
consummate the transaction; (iv) the receipt by MICA of an opinion from an
investment banking firm to the effect that the terms of the transaction are
fair from a financial point of view to its shareholders; (v) the absence of any
material adverse change in the financial condition, results of operations or
business of MICA or Acquiror; and (vi) the agreement of the holders of MICA
debt and MICA debentures not to convert or otherwise call their debt as a
result of the transaction contemplated by this letter.

        6.  Definitive Agreement.  The parties shall cooperate with each other
and use their respective best efforts to negotiate, prepare and execute the
Definitive Agreement as soon as reasonably practicable, but in any event prior
to July 19, 1996.  In connection therewith, the Definitive Agreement will
contain provisions satisfactory to MICA and Acquiror with respect to the
following, in addition to the provisions described above:

            (a)  representations and warranties of MICA and Acquiror which will
expire two years subsequent to the closing of the transaction regarding their
corporate authority and good standing; capitalization; financial statements;
the amount and condition of inventory and other assets; material contracts,
including labor and employment contracts; no undisclosed liabilities,
threatened claims or contingencies, including but not limited to those relating
to material contracts; employee matters; compliance with laws; no required
consents; insurance; environmental matters; litigation, taxes, including but
not limited to that payments are current and no penalties are due or owing;
intellectual property rights; absence of material adverse changes; full
disclosure; and other customary matters;

            (b)  covenants of MICA and Acquiror regarding the conduct of their
business; to update their representations and warranties; to disclose any
material or extraordinary event occurring prior to the closing; to use best
efforts to obtain all consents and approvals required as a closing condition;

            (c)  customary closing conditions, including the matters described
in paragraph 5 above and the conditions that (i) the representations and
warranties of MICA and Acquiror shall be true as of the closing date with the
same effect as though made at the closing date (without taking into account any
update of such representations and warranties), (ii) MICA and Acquiror shall
have duly performed and satisfied all required covenants, agreements and
conditions set forth in the Definitive Agreement; and


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                (d)     a break-up fee in an amount equal to three percent (3%)
of the aggregate amount committed by Acquiror pursuant to paragraph 2
hereinabove should the transaction not close for any reason other than a
failure to perform on the part of the Acquiror.

        7.      BOARD APPROVAL. The parties acknowledge that the Board of
Directors of MICA, after reviewing the terms of this agreement in principle,
have approved this agreement and authorized MICA's officers to negotiate the
terms of the Definitive Agreement. Should the transaction not close for any
reason other than a failure to perform on the part of Acquiror at any time
prior to entering into a Definitive Agreement, then MICA agrees to reimburse
Acquiror its expenses in connection with this transaction, up to a maximum of
Two Hundred Thousand Dollars ($200,000).

        8.      NO SOLICITATION. We agree that MICA and its officers, directors
and advisors will not solicit or initiate, for a period of 30 days hereof, any
offer or proposal to acquire MICA, whether by purchase, tender offer, merger or
otherwise, from any third party; provided however, that in exercise of its
fiduciary obligations under applicable law, MICA's Board of Directors may
consider any unsolicited offer and may enter into negotiations or an agreement
with a third party submitting such offer, subject to compliance with paragraph
7 hereinabove.

        9.      EMPLOYMENT AGREEMENTS. The parties acknowledge that MICA is a
party to employment agreements with Robert S. Muehlberg, Chairman and Chief
Executive Officer of MICA and Denise L. Sunseri, Chief Financial Officer and
Secretary of MICA. Acquiror shall honor the provisions of such agreements to
the extent applicable, including any severance or "change in control"
obligations thereunder.

        10.     CONDUCT OF BUSINESS. Pending the execution of the Definitive
Agreement, MICA shall conduct its business only in good faith, in a manner
consistent with past practices, without making any material change in its
business, operations or policies.

        11.     CONFIDENTIALITY. MICA and Acquiror agree that all information
obtained with respect to the other pursuant to this agreement in principle will
be used only for the purpose of evaluating the proposed transaction and will
not be disclosed without the prior written consent of the other party except on
a need to know basis to officers, employees and agents of MICA and Acquiror, as
the case may be, who have agreed to the limitation on use imposed by this
agreement. The foregoing confidentiality obligation shall not apply with
respect to information which becomes generally available to the public other
than as a result of a disclosure by the other party, was available to the other
party on a non-confidential basis prior to its disclosure to the other party
pursuant hereto, or which is required to be disclosed by law.

        12.     PUBLICITY. Except as required by law, the parties agree that
there will be no public announcements or other publicity with respect to the
proposed transaction, this agreement in principle, the Definitive Agreement or
any other matters related thereto without the express written consent of MICA
and Acquiror; provided, however, that Acquiror acknowledges and agrees that
MICA and Acquiror may disclose the material terms of this agreement in principle

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in a joint press release prior to June 19, 1996, the content of which is agreed
to by both MICA and Acquiror.

        13.  Expenses.  MICA and Acquiror shall pay their respective expenses
(including fees and expenses of legal counsel, investment bankers, brokers or
other representatives or consultants) in connection with the proposed
transaction, whether or not consummated.

        14.  Binding Effect.  It is understood that this agreement in principle
merely constitutes a statement of our intentions with respect to the proposed
transaction, does not contain all matters upon which agreement must be reached
in order for the transaction to be consummated and, therefore, does not
constitute a binding commitment with respect to the transaction. A binding
commitment with respect to the transaction will result only from the execution
and delivery, if any, of the Definitive Agreement, subject to the conditions
expressed therein. Notwithstanding the two preceding sentences of this
paragraph 13, the provisions of paragraph 7, 11, 12, and 13 hereof are agreed
to be fully binding upon the parties hereto upon the execution of this
agreement, unless and until they are superseded by the Definitive Agreement.

        If this agreement in principle accurately summarizes our discussions,
we request that you sign, date and return to MICA the enclosed copy of this
agreement no later than June 18, 1996, whereupon this agreement shall become
effective in accordance with paragraph 13 above. This agreement in principle
may be executed in counterpart, all of which together shall constitute one and
the same agreement.

                                    MEDICAL IMAGING CENTERS OF
                                    AMERICA, INC.   


                                    By: /s/ Robert S. Muehlberg
                                        ------------------------------------
                                        Robert S. Muehlberg
                                        Chairman and Chief Executive Officer

Accepted and agreed to this
18th day of June, 1996


DIAGNOSTIC IMAGING SERVICES, INC.


By /s/ Norman Hames, President
   -------------------------------
   Norman Hames, President


By /s/ Howard Berger, M.D.
   -------------------------------
   Howard Berger, M.D.
   Chairman of the Board


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EX-99.1

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                                                                   EXHIBIT 99.1


                        [MICA NEWS BULLETIN LETTERHEAD]




FOR IMMEDIATE RELEASE
- ---------------------


                                              Contact:  Robert S. Muehlberg
                                                        President and
                                                        Chief Executive Officer
                                                        (619) 560-0110

                 MEDICAL IMAGING CENTERS OF AMERICA, INC. SIGNS
         AGREEMENT IN PRINCIPLE WITH DIAGNOSTIC IMAGING SERVICES, INC.
                    TO BE ACQUIRED FOR $11.50 CASH PER SHARE




        SAN DIEGO, CA -- June 18, 1996 -- MEDICAL IMAGING CENTERS OF AMERICA,
INC. (OTC Bulletin Board/MIGA)

        Medical Imaging Centers of America, Inc. ("MICA") (OTC Bulletin
Board/MIGA) announced today the signing of an agreement in principle to be
acquired by Diagnostic Imaging Services, Inc. ("DIS") (OTC Bulletin Board/DIAM)
in a transaction to be structured as a cash tender offer for any and all shares
of common stock of MICA, followed by a cash merger of DIS or a wholly-owned
subsidiary of DIS with MICA. Pursuant to the agreement in principle, each share
of MICA common stock would receive $11.50 in cash under either the cash tender
offer or the cash merger. The agreement in principle is non-binding and is
subject to, among other things, the execution of a definitive agreement,
satisfactory completion of due diligence, the availability of financing
sufficient to consummate the transaction and a fairness opinion from MICA's
financial advisor. Following the execution of a definitive agreement, the
acquisition would be further subject to other customary closing conditions,
including approval by the shareholders of MICA and, if required, of DIS. The
Company plans to file promptly with the Securities and Exchange Commission a
Form 8-K that will include the agreement in principle.

        As previously announced in March 1996, MICA commenced a process to sell
or merge MICA in an effort to maximize shareholder value, as required by the
Agreement of Compromise and Settlement between MICA and Steel Partners II, L.P.
and its affiliates.

        Robert Muehlberg, chairman and chief executive officer of MICA
commented, "We have conducted a thorough process to maximize the value of MICA's
common stock. After reviewing a number of proposals, we have selected the offer
from DIS because it provides MICA's shareholders with the best value for their
investment."

        MICA owns and manages 17 diagnostic imaging centers and one radiation
oncology center. MICA also provides outpatient diagnostic imaging services and
medical equipment rentals to physicians, managed care providers and hospitals.