Healthcare IT and advanced visualization developer Merge Healthcare of Milwaukee has entered into a financing agreement with Merrick RIS, the company reported.
Under terms of the $20 million deal, Merge will sell a $15 million senior secured term note due 2010, 6.8 million shares of common stock as partial consideration for this note, and 14.3 million shares of common stock at a price of $0.35 per share. The private placement is expected to close on June 3. Net proceeds of the deal for Merge will be $16.6 million, the company said. It plans to use the funds raised in part to settle class-action suits filed against it.
Merrick will be entitled to choose five people to replace five of the 11 current members of Merge's board of directors, Merge said.
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