FIRST AMENDMENT TO RIGHTS AGREEMENT
Exhibit 4.2
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO RIGHTS AGREEMENT (“Amendment”), dated as of the
21st day of May, 2008, by and between Merge Healthcare Incorporated f/k/a Merge
Technologies Incorporated, a Wisconsin corporation (the “Company”), and American Stock
Transfer & Trust Co. as rights agent (the “Rights Agent”), constitutes the First Amendment
to the Rights Agreement, dated as of September 6, 2006, by and between the Company and the Rights
Agent. Capitalized terms used herein and not otherwise defined shall have the respective meanings
ascribed to such terms in the Rights Agreement.
WHEREAS, the Company and its subsidiaries and ▇▇▇▇▇▇▇ RIS, LLC, a Delaware limited liability
company (“Buyer”) have proposed to enter into a Securities Purchase Agreement to be dated
as of the date hereof (the “Purchase Agreement”);
WHEREAS, the Company desires to amend the Rights Agreement to render it inapplicable to the
purchase by Buyer of shares of Common Stock pursuant to the Purchase Agreement and the other
transactions contemplated by the Purchase Agreement;
WHEREAS, the Company deems the Amendment to be necessary and desirable and in the best
interests of the holders of the Rights and has duly approved this Amendment;
WHEREAS, no Person has become an Acquiring Person;
WHEREAS, Section 27 of the Rights Agreement provides that prior to such time as any Person
becomes an Acquiring Person, the Company may, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of the Rights Agreement without the approval of any holders of
certificates representing Common Shares of the Company, subject to certain limitations provided
therein; and
WHEREAS, the Company desires to amend the Rights Agreement as set forth herein and hereby
directs the Rights Agent to execute this Rights Amendment.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. The Rights Agreement is hereby amended by:
(a) Adding the following sentence at the end of the definition of “Acquiring Person” in
Section 1(a) of the Rights Agreement:
“Notwithstanding any of the terms of the foregoing definition, none of ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ or his or its Affiliates or Associates shall be deemed to be an “Acquiring Person”
for any purposes of this Agreement unless such persons in the aggregate shall become the
Beneficial Owner of more than 40% of the Common Shares of the Company other than as a result
of (A) action by the Company or any other stockholders not caused, directly or
indirectly, by such Persons, (B) as a result of an acquisition of Common Shares by the
Company, which by reducing the number of shares outstanding, increases the proportionate
number of shares Beneficially Owned by such Persons or (C) the purchase or the right to
purchase by such Persons of newly issued shares of Common Stock of the Company, pursuant to
the preemptive right contained in the Purchase Agreement.
(b) Adding the following subsections at the end of Section 1:
(o) “▇▇▇▇▇▇▇” shall mean ▇▇▇▇▇▇▇ RIS, LLC a Delaware limited liability company.
(r) “Purchase Agreement” shall mean the Securities Purchase Agreement, dated May 21,
2008 by and among ▇▇▇▇▇▇▇, the Company and those subsidiaries of the Company listed on the
Schedule of Subsidiaries attached thereto.
(c) Adding the following sentence at the end of the definition of “Distribution Date” in
Section 3(a) of the Rights Agreement:
“Notwithstanding any of the terms of the foregoing definition, no “Distribution Date” will
occur as a result, directly or indirectly, of (i) the approval, execution, delivery or
performance of the Purchase Agreement, (ii) the public announcement of such approval,
execution, delivery or performance of the Purchase Agreement or (iii) the consummation of
the transactions contemplated by the Purchase Agreement.”
(d) Adding the following sentence at the end of the definition of “Shares Acquisition Date” in
Section 1(m) of the Rights Agreement:
“Notwithstanding any of the terms of the foregoing definition, no “Shares Acquisition Date”
will occur as a result, directly or indirectly, of (i) the approval, execution, delivery or
performance of the Purchase Agreement, (ii) the public announcement of such approval,
execution, delivery or performance of the Purchase Agreement or (iii) the consummation of
the transactions contemplated by the Purchase Agreement.”
2. The term “Agreement” as used in the Rights Agreement shall mean the Rights Agreement, as
amended by this Amendment, or as it may from time to time be amended in the future by one or more
other written amendment or modification agreements entered into pursuant to the applicable
provisions of the Rights Agreement.
3. This Amendment shall constitute a certificate from an appropriate officer of the Company
that this Amendment satisfies the terms of Section 27 of the Rights Agreement, and the Company
hereby directs American Stock Transfer & Trust Co., in its capacity as Rights Agent and in
accordance with the terms of Section 27 of the Rights Agreement, to execute this Amendment.
4. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and assigns.
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5. This Amendment shall be governed by and construed and enforced in accordance with the laws
of the State of Wisconsin applicable to contracts made and to be performed entirely within such
State.
6. Except as expressly herein amended, the terms and conditions of the Rights Agreement shall
remain in full force and effect.
[Signatures appear on the following page.]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Rights Agreement to
be duly executed as of the date first above written.
| COMPANY: | ||||
| MERGE HEALTHCARE INCORPORATED | ||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Its: | Chief Executive Officer | |||
| RIGHTS AGENT: | ||||
| AMERICAN STOCK TRANSFER & TRUST CO. | ||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Its: | Vice President | |||
[Signature Page—Amendment to Rights Agreement]