By Devika Patel
Knoxville, Tenn., May 22 - Merge Healthcare Inc. arranged a $20 million private placement of a senior secured term note and common stock with Merrick RIS, LLC.
The $15 million term note will bear interest at 13%. It matures in 2010. The company is required to prepay the first two interest payments at closing. The principal will be payable in a single installment in two years.
Merrick may require the company to redeem the term note in full if a change of control occurs.
If the shareholders receive a consideration of $1.75 per share or higher from the change of control, the note will be redeemed at par. If the consideration is less than $1.75 per share, the redemption premium shall be 120% of par, if the change of control occurs within one year of the closing date, or 118% of par at anytime thereafter.
The note may also be voluntarily prepaid at 120% of par at any time.
Merrick also bought 14,285,715 common shares at $0.35 apiece for $5 million and received 6.8 million shares as partial consideration for the note.
Proceeds will be used for working capital and other purposes.
Based in Milwaukee, Merge Healthcare develops medical imaging and information management software and services.
| Issuer: | Merge Healthcare Inc.
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| Issue: | Senior secured term note, common stock
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| Amount: | $20 million
|
| Warrants: | No
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| Investor: | Merrick RIS, LLC
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| Pricing date: | May 22
|
| Stock symbol: | Nasdaq: MRGE
|
| Stock price: | $0.38 at close May 21
|
|
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| Note
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| Amount: | $15 million
|
| Maturity: | 2010
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| Coupon: | 13%
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| Price: | Par
|
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| Shares
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| Amount: | $5 million
|
| Shares: | 14,285,715
|
| Price: | $0.35
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