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Thomas P. Conaghan
Attorney at Law
tconaghan@mwe.com
+1 202 756 8161 |
October 14, 2011
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Evan S. Jacobson
Attorney-Advisor
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Re: |
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Merge Healthcare Incorporated
Registration Statement on Form S-4
Filed September 1, 2011
SEC File No. 333-176640
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Dear Mr. Jacobson:
On behalf of Merge Healthcare Incorporated (the Company), set forth below are responses to the
comments of the staff (the Staff) of the Securities and Exchange Commission (the SEC) contained
in your letter dated September 27, 2011 (the Comment Letter) relating to the Registration
Statement on Form S-4, filed by the Company on September 1, 2011 (File No. 333-176640) (the
Registration Statement). The headings and numbered paragraphs of this letter correspond to the
headings and paragraph numbers contained in the Comment Letter, and to facilitate your review, we
have reproduced the text of the Staffs comments in bold below. In addition to the responses
below, the Company has filed today Amendment No. 1 to the Registration Statement (Amendment No.
1) to address the Staffs comments and is supplementally providing you with three copies of
Amendment No. 1, which are marked to show changes against the initial filing.
General
1. We note that you are registering the exchange notes in reliance on our position enunciated in
Exxon Capital Holdings Corp., SEC No-Action Letter (April 13, 1988). See
also Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991) and Shearman & Sterling, SEC
No-Action Letter (July 2, 1993). With your next amendment, please submit a letter stating that you
are registering the exchange offer in reliance on our position contained in these letters and
include the representations contained in the Morgan Stanley and Shearman & Sterling no-action
letters.
Evan S. Jacobson
October 14, 2011
Page 2
Company Response: Concurrently with this response, the Company is supplementally providing the
Staff with a letter (Attachment A) containing the information requested in the Staffs comment.
The Exchange Offer
Purpose and Effect, page 28
2. You state that the exchange offer will expire at 5:00 p.m., Eastern time, on the last day of a
period of no less than at least twenty business days from the date you mail the notice of the
exchange offer. Based upon the definition of the term business day contained in Exchange Act Rule
14d-1(g)(3), the minimum offering period must extend at least through midnight of the twentieth
business day. Please confirm that the offer will be open at least through midnight on the twentieth
business day. See Exchange Act Rule 14e-1(a). In addition, please confirm that the expiration date
will be included in the final prospectus disseminated to security holders and filed pursuant to the
applicable provisions of Securities Act Rule 424.
Company Response: The Company confirms that the exchange offer will be open at least through
midnight on the twentieth business day following commencement of the offer and that the expiration
date of the exchange offer will be included in the final prospectus disseminated to security
holders and filed pursuant to the applicable provisions of Rule 424 of Regulation C (Rule 424).
3. The last paragraph of this section states that the summary of certain provisions of the
registration rights agreement does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all of the provisions of the registration rights agreement.
Please revise to discuss all material provisions of the registration rights agreement and to remove
the suggestion that your disclosure is not materially complete.
Company Response: The Company believes that all material provisions of the registration rights
agreement are discussed in the section of the Registration Statement captioned Purpose and
Effect. The Company has removed the above-referenced language from page 30 of Amendment No. 1.
Expiration Date; Extensions; Amendments, page 31
4. You state that you reserve the right to amend the terms of the offer. Please revise here and in
the penultimate paragraph on page 31, to indicate that, in the event of a material change in the
offer, including the waiver of a material condition, you will extend the offer period if necessary
so that at least five business days remain in the offer following notice of the material change.
Evan S. Jacobson
October 14, 2011
Page 3
Company Response: The Company respectfully acknowledges the Staffs comment and has revised page 31
of Amendment No. 1 accordingly.
Conditions to the Exchange Offer, page 31
5. In the first paragraph of this section, you state that you may determine whether certain offer
conditions are satisfied, i.e., whether the exchange offer violates applicable law or any
applicable interpretation of the staff of the SEC. Offer conditions cannot be within the direct or
indirect control of the bidder and must be drafted with sufficient specificity to allow for
objective verification that the conditions have been satisfied. Please revise to include an
objective standard, such as a standard of reasonableness, against which your discretion may be
judged.
Company Response: The Company respectfully acknowledges the Staffs comment and has revised page 31
of Amendment No. 1 to include an objective standard of reasonableness against which the Companys
discretion may be judged.
6. In the first sentence of the fifth paragraph of this section, you state that the foregoing
conditions are for your sole benefit and may be waived by you in whole or in part at any time and
from time to time. In addition, the last sentence of the fifth paragraph states that each offer
condition shall be deemed an ongoing right which may be asserted at any time and from time to time.
Please revise to indicate that offer conditions, other than those dependent upon the receipt of
government approvals, may only be asserted as of expiration of the offer as opposed to at any time
and from time to time. That is, the triggering event and the corresponding determination of
whether to assert or waive the condition must occur on or before expiration of the offer, and not
after that time.
Company Response: The Company respectfully acknowledges the Staffs comment and has revised page
31 of Amendment No. 1 to reflect that offer conditions, other than those dependent upon the receipt
of governmental approvals, may only be asserted from time to time on or before the expiration of
the offer.
7. When a condition is triggered and you decide to proceed with the offer anyway, your inaction
constitutes a waiver of the triggered condition. Depending on the materiality of the waived
condition and the number of days remaining in the offer, you may be required to extend the offer
and recirculate new disclosure to security holders. You may not, however, simply fail to assert a
triggered offer condition and thus effectively waive it without officially doing so. Please confirm
your understanding in your response letter.
Company Response: The Company confirms its understanding of the matters detailed above in the
Staffs comment.
8. When an offer condition is triggered by events that occur during the offer period and before the
expiration of the offer, you should inform holders of securities how you intend to proceed
promptly, rather than waiting until the end of the offer period, unless the condition is one where
satisfaction of the condition may be determined only upon expiration. Please confirm your
understanding in your response letter.
Company Response: The Company confirms its understanding of the matters detailed above in the
Staffs comment.
Evan S. Jacobson
October 14, 2011
Page 4
Acceptance of Exchange Notes, page 33
9. You state that you will determine in your sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered old notes and withdrawal of the old
notes tendered in the exchange offer, and that your determination will be final and binding. We
note similar language in your discussion of withdrawal rights in the last paragraph on page 35.
Please delete this language, or disclose that only a court of competent jurisdiction can make a
determination that will be final and binding upon the parties. In addition, please disclose that
security holders may challenge your determinations.
Company Response: The Company respectfully acknowledges the Staffs comment and has revised pages
33 and 35 of Amendment No. 1 accordingly. A corresponding change has been made to Instruction 4 of
the Letter of Transmittal which the Company has re-filed as Exhibit 99.1 to Amendment No. 1.
* * *
Evan S. Jacobson
October 14, 2011
Page 5
If you have any questions with respect to the foregoing, please contact Thomas P. Conaghan
at (202) 756-8161.
Very truly yours,
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/s/ Thomas P. Conaghan
Thomas P. Conaghan
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cc: |
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Ann G. Mayberry-French, General Counsel and Corporate Secretary
Jeffery A. Surges, Chief Executive Officer
Justin C. Dearborn, President and Chief Financial Officer
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Evan S. Jacobson
October 14, 2011
Page 6
Attachment A
Merge Healthcare Incorporated
900 Walnut Ridge Drive
Hartland, Wisconsin 53029
October 14, 2011
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attn: Evan S. Jacobson
Attorney-Advisor
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Re: |
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Merge Healthcare Incorporated
Registration Statement on Form S-4
Filed September 1, 2011
SEC File No. 333-176640
(the Registration Statement) |
Dear Mr. Jacobson:
The following supplemental letter (the Supplemental Letter) is being provided by Merge Healthcare
Incorporated (the Company) on behalf of the registrants to the Staff of the U.S. Securities and
Exchange Commission (the Staff) in response to Comment No. 1 included in the September 27, 2011
Comment Letter relating to the Registration Statement. Any terms not specifically defined in this
Supplemental Letter shall have the meanings given to such terms in the Registration Statement.
The Company represents to the Staff that the Company is registering the exchange notes in reliance
on the Staffs position in Exxon Capital Holdings Corporation (SEC No-Action Letter dated
April 13, 1989), Morgan Stanley & Co. Incorporated (SEC No-Action Letter dated June 5,
1991) and Shearman and Sterling (SEC No-Action Letter dated July 2, 1993).
The Company further represents to the Staff that (i) it has not entered into any arrangement or
understanding with any person to distribute the exchange notes to be received in the exchange offer
and (ii) to the best of the Companys information and belief, each person participating in the
exchange offer is acquiring the exchange notes in its ordinary course of business and has no
arrangement or understanding with any person to participate in the distribution of the exchange
notes to be received in the exchange offer. In this regard, the Company has included disclosure in
both the exchange offer prospectus and the transmittal materials distributed in the exchange offer
designed to make each person participating in the exchange offer aware that any noteholder using
the exchange offer to participate in a distribution of the exchange notes to be acquired in
Evan S. Jacobson
October 14, 2011
Page 7
the exchange offer (i) could not rely on the Staffs position enunciated in Exxon Capital
Holdings Corporation or its progeny, and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended, in connection with any secondary
resale transaction. The Company acknowledges that any such secondary resale transactions should be
covered by an effective resale registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K.
The Company further represents to the Staff that it has included in its transmittal materials to be
executed by each exchange offeree in order to participate in the exchange offer a representation to
the effect that by accepting the exchange offer, the exchange offeree represents to the Company
that it is not engaged in, and does not intend to engage in, a distribution of the exchange notes.
The Company will commence the exchange offer for the outstanding notes only when the Registration
Statement is declared effective by the U.S. Securities and Exchange Commission. The exchange offer
would remain in effect for a limited time and would not require the Company to maintain an
evergreen registration statement.
The exchange offer will be conducted in compliance with the Securities Exchange Act of 1934, as
amended, and any applicable rules and regulations thereunder.
The Company will make each person participating in the exchange offer aware, through the prospectus
and the transmittal materials, that any broker-dealer who holds outstanding notes acquired for its
own account as a result of market-making activities or other trading activities, and who received
exchange notes in exchange for such outstanding notes pursuant to the exchange offer, may be a
statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act
of 1933, as amended, in connection with the resale of such exchange notes.
The Company has included in the transmittal materials to be executed by each exchange offeree in
order to participate in the exchange offer a condition that, if the exchange offeree is a
broker-dealer holding outstanding notes acquired for its own account as a result of market-making
activities or other trading activities, such broker-dealer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act of 1933, as amended in connection with
any resale of the exchange notes received in respect of such outstanding notes pursuant to the
exchange offer.
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Sincerely,
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/s/ Ann G. Mayberry-French
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Ann G. Mayberry-French |
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General Counsel and Corporate Secretary |
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