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Exhibit 10.1
 
 
CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR
WHICH CONFIDENTIAL TREATMENT IS REQUESTED HAVE BEEN MARKED WITH THREE ASTERISKS
[***] AND A FOOTNOTE INDICATING “CONFIDENTIAL TREATMENT REQUESTED”.  MATERIAL
OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[mergehealthcarelogo.jpg]

 
March 22, 2012
 

Khan M. Siddiqui, M.D.
Chief Executive Officer
higi llc
350 N. Orleans Street
Chicago, Illinois  60654

 
Re:
Agreement Between higi llc, an Delaware corporation (“higi”), and Merge
Healthcare Solutions Inc., a Delaware corporation (“Merge”), for the Purchase
and Sale of Merge Motion Kiosks (“Kiosks”)

 
Dear Khan:
 
The purpose of this letter, effective as of the date written above (the
“Effective Date”), is to memorialize the agreement and understanding between
higi and Merge (each a “Party” and, collectively, the “Parties”) regarding
higi’s purchase of Merge’s kiosks as identified in Exhibit A (the “Kiosks”),
subject to the terms and conditions we describe in herein letter (the
“Agreement”).  In consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged by each of the Parties, the Parties hereby
stipulate, covenant and agree as follows:
 
1.           Purchase and Sale.  Subject to the terms and conditions of this
Agreement, higi shall purchase from Merge, and Merge shall sell, transfer and
assign to higi, all of Merge’s rights, title and interests in and to the Kiosks
including the software license granted below.  Higi shall be responsible for the
cost of insurance from the manufacturer’s point of origin.  Merge shall deliver
Kiosks and the software license granted below to higi at a location and date as
specified by higi but in any event no later than March 30, 2012.
 
2.           Purchase Price.  The purchase price includes those parts and
materials as set forth on Exhibit B, the Bill of Materials and
Specifications.  The purchase price shall be [***]1 per Kiosk and shall include
shipping costs to the warehouse location in Colorado.  Higi shall be responsible
for payment of insurance costs during shipment as set forth above. No later than
close of business on March 30, 2012, higi shall pay to Merge the amount of Two
Million Seven Hundred Fifty Thousand U.S. Dollars ($2,750,000) for the Machines
purchased hereunder in immediately available funds.
 
__________________________
1 ***Confidential Treatment Requested.
 

200 E. Randolph Street, Suite 2435  |  Chicago, IL  60601  |  P:
312.565.6868  |  F: 312.565.6870
 
 

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3.           Software License; Warranty.  Merge hereby grants to higi a
perpetual, royalty-free license to use the Merge software included with each
Kiosk.  Furthermore, Merge shall grant higi a perpetual, royalty-free license to
use the included programs, drivers and software for all components in each
Kiosk and a perpetual, royalty-free license to develop tothe application
programming interfaces of each component in the Kiosk consistent with the
specifications developed and agreed to by higi and Merge. Merge represents that
the software will be consistent with those specifications upon delivery and
installation of the software. Merge represents and warrants that the software
will include licenses for any embedded third party software for use consistent
with the specifications.

Merge Healthcare warrants that the software shall perform in substantial
conformity with the specifications and the documentation and that the media on
which the Software is delivered shall be free of defects in material and
workmanship for a period of ninety (90) days from the date of delivery of the
gold copy. The preceding warranty is conditional upon unmodified software and
that the software is properly used on the hardware and with the operating system
for which it was designed. The preceding warranty shall be void if failure of
the software has resulted from accident, abuse, misapplication, or installation
of any third party software that has not been approved by Merge
Healthcare.  Upon the purchase of support services from Merge, such software
warranty shall continue through the period of support purchased from Merge by
higi.
 
 
4.           Hardware: Pass-Through of Manufacturer Warranties.  Merge
Healthcare provides no warranty on hardware and instead assigns and will
pass-through to higi, to the fullest extent permitted by law and by the terms
and conditions of third-party manufacturer warranties, if any.  All manufacturer
warranties on the hardware and this Agreement shall serve as an assignment from
Merge Healthcare to higi of any such warranties.

 
5.
Additional Kiosks and Support Services Options.

 
 
a.
Additional Kiosk Procurement.  For a period of five (5) years from the execution
of this Agreement (the “Option Term”), higi may procure additional kiosks under
the following terms.

 
 
i.
Purchase Option.  higi may purchase additional kiosks during this five (5) year
term at a purchase price of [***]2 per additional kiosk.  Such price shall
include a perpetual license to use of the software included with the kiosk.  In
the event that the costs related to the specifications or Bill or Materials
changes significantly from that set forth in Exhibit B and the cost of such
materials is materially affected, the parties to this Agreement shall update the
purchase price proportionally with the change in Bill of Materials.

 
 
ii.
Lease Option.  In the alternative to purchasing such additional kiosks, higi may
lease additional kiosks for a lease term of five (5) years per kiosk at the
amount of One Hundred Twenty-Five U.S. Dollars ($125) per month (inclusive of
Optional Support Services), and will adjust proportionally with the change in
Bill of Materials as provided in Section 7.a.i. In the event that higi chooses
to lease any additional kiosks, the parties expressly acknowledge and agree that
they will negotiate and execute an appropriate lease agreement at that time.

 
 
b.
Optional Support Services.  higi may at its option purchase support services
from Merge at Merge’s current pricing of $30 per month, per kiosk.  Support
services shall include labor, parts (replacement) and kiosk maintenance as
needed plus an annual maintenance if no other service has been required.  Upon
the purchase of these services from Merge, it shall also correct software bugs
and performance issues at no additional cost to higi.  Support services also
include software updates and upgrades.

 
__________________________ 
2 ***Confidential Treatment Requested.

 
 

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Merge support pricing shall be offered at this price and shall not be subject to
change for a period of five (5) years from the date hereof.  higi may exercise
this option to purchase support services at any time during this five (5) year
period at this pricing in any quantities desired.  In the event that higi elects
to purchase such support services during this five (5) year period, higi shall
provide thirty (30) days advance written notice of its desire to so exercise
this option.  Upon receipt of such notice, Merge shall then invoice higi for the
appropriate amount and such invoice shall be due and payable to Merge thirty
(30) days in advance of the start of the support services.

6.           Mutual General Release.  Each Party on behalf of itself and any
other party, person or entity claiming under or through it, hereby generally
releases, discharges and acquits each other Party, and its respective current
and former agents, servants, officers, directors, shareholders, employees,
subsidiaries, divisions, branches, units, affiliates, parents, attorneys,
successors, predecessors, heirs, personal representatives, and assigns (each of
the foregoing, a “Released Party”), from all manners of action, causes of
action, judgments, executions, debts, demands, rights, damages, costs, expenses,
and claims of every kind, nature, and character whatsoever, whether in law or in
equity, whether based on contract (including, without limitation, quasi-contract
or estoppels), statute, regulation, tort (including, without limitation,
intentional torts, fraud, misrepresentation, defamation, breaches of alleged
fiduciary duty, recklessness, gross negligence, or negligence) or otherwise,
accrued or unaccrued, known or unknown, matured, unmatured, liquidated or
unliquidated, certain or contingent, that such releasing Party ever had or
claimed to have, or now has or claims to have presently or at any future date,
against any Released Party, provided, however, that neither Party shall be
deemed released or discharged from its duties and obligations under this
Agreement.

7.           Representations, Warranties and Acknowledgements.

 
a.
Merge represents and warrants to higi that the Kiosks are not be subject to any
lien, encumbrance, or security interest of any third party.

 
 
b.
higi acknowledges that it has read this Agreement and has had a reasonable
period of time to consider this Agreement.  higi further acknowledges that it
understands all the terms and conditions of this Agreement and has knowingly and
voluntarily agreed to those terms, which may not be changed.

 
8.           No Third-Party Beneficiaries.  This Agreement shall be for the
benefit of the Parties, and none of the provisions of this Agreement shall be
for the benefit of or enforceable by any third party.  Nothing in this Agreement
is intended to relieve or discharge the obligations or liabilities of any third
party to any Party hereto or to give any third party any right of subrogation or
action over or against any Party hereto.
 
9.           Governing Law.  This agreement and any question, dispute or other
matter between the Parties with respect to or in connection with this agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
 
10.         Successors and Assigns.  All of the terms and provisions of this
Agreement shall be binding upon and shall benefit, and be enforceable by, the
successors and assigns of the Parties hereto.

 
 

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11.         Entire Agreement.  This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof and supersedes any
previous written or oral agreement in connection therewith.
 
12.         Execution.  This agreement may be executed in separate counterparts
(including by electronic or facsimile transmission), all of which when so
executed shall be deemed to constitute one and the same agreement.
 
By signing this letter, each of higi and Merge confirms that it has agreed to
the terms and conditions set forth herein.
 
Very truly yours,
 
MERGE HEALTHCARE SOLUTIONS INC.
 
/s/ Justin Dearborn
 
Justin Dearborn
President & Chief Financial Officer

Acknowledged and agreed as to the foregoing.

higi llc
 

 

By: /s/Khan M. Siddiqui, MD       Khan M. Siddiqui, MD  Its:   Chief Executive
Officer

 
Date:  March 28, 2012

 
 

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EXHIBIT A

KIOSKS

KMY120328650-[***]3 to [***]4

________________________ 
3 Confidential Treatment Requested.
4 Confidential Treatment Requested.

 
 

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EXHIBIT B
 
Specifications and Bill of Materials

[***]5

 
 
________________________ 
5 ***Confidential Treatment Requested.

 
 

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EXHIBIT C

BILL OF SALE
 
 
This Bill of Sale dated as of March 28, 2012 (the “Bill of Sale”) is made and
delivered by Merge Healthcare Solutions Inc. (“Merge”) and higi llc (“higi”), in
favor of higi.  For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Merge hereby sells, transfers and assigns to
higi, all of its rights, title and interests to the Kiosks identified in Exhibit
A hereto (the “Kiosks”), including, without limitation, all of Merge’s rights,
claims and interests (including security interests and liens) arising under,
related to or in connection the Agreement dated as of March 28, 2012.
 
This Bill of Sale and all matters relating hereto shall be governed by and
construed in accordance with the internal laws of the State of Illinois.

Seller:      Merge Healthcare Solutions Inc.
200 East Randolph Street, Suite 2435
Chicago, Illinois  60601

Buyer:     higi llc
350 N. Orleans Street
Chicago, Illinois  60654

 

 
higi llc
                             
By:
/s/ Khan M. Siddiqui, MD
     
Khan M. Siddiqui, MD
   
Its:
Chief Executive Officer
   
Date:
March 28, 2012
 

 

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